The latest forecast data from Wood McKenzie shows that global lithium battery production is expected to increase by 45% in 2023, exceeding 1380GWh, while demand is about 1080GWh. According to the expansion project announced by the battery supplier, the production of lithium batteries may reach as high as 6100GWh in 2032. However, due to the demand outlook of about 3700GWh that year, there is a high possibility of project cancellation.
From a regional market perspective, the battery production capacity in the Asia Pacific region accounts for 87% of the global market's total production capacity, while Europe and North America only account for 8% and 5%, respectively. It is expected that the local supply gap in Europe and the United States will both exceed 100GWh this year.
The Asia Pacific region holds a global leading position in lithium battery manufacturing and supply chain, with various battery component production capacities accounting for over 87%. Among them, China accounts for more than 80% of the global production capacity of Lithium iron phosphate cathode material, electrolyte and diaphragm, and this advantage will last until 2032 and beyond. Although the supply chain scale of non lithium batteries such as Sodium-ion battery and Flow battery has gradually expanded, their capacity share will still be less than 3% by 2032. The market share of Lithium iron phosphate battery is increasing, which will reach 28% by 2023, and is expected to surpass nickel based battery by 2030.
Battery manufacturers' expansion plans significantly slowed down in the first half of this year, with operating rates halving
It is reported that global battery manufacturers announced a total investment and construction plan of approximately 86 billion US dollars in the first half of 2023, totaling 54 manufacturing plants. If all expansion plans are carried out as scheduled, the global lithium battery production capacity is expected to reach 9800GWh by 2032.
The North American region is accelerating local capacity investment under the Inflation Reduction Act. In the first half of 2023, North America announced a total of over 350GWh of new capacity investments, almost unchanged from the entire year last year.
