In a recent report released today, North America has secured its position as the fastest-growing regional market for planned new battery cell manufacturing factories by the end of 2022. The “Energy Storage System Supplier Market Intelligence Report” by Clean Energy Associates (CEA) highlights that this remarkable growth can be attributed to the incentives provided by the Biden administration’s Inflation Reduction Act (IRA).
The surge in North American battery factories is exemplified by major announcements from industry leaders. Ford and CATL revealed their plans in February 2022 to construct a $3.5 billion, 35 GWh lithium iron phosphate (LFP) cell production facility in Michigan by 2026. Similarly, BMW Group and Envision AESC announced in October 2022 that they would establish a $700 million, 30 GWh EV battery factory in South Carolina, with the launch date yet to be determined. Electrovaya, a Canadian battery manufacturer, is set to build its first US EV battery plant in New York State, boasting a capacity of approximately 1 GWh. The factory, valued at $75 million, is slated to open in the fall of 2023.
While China still holds its position as the leading battery cell manufacturing hub, CEA predicts a decline in its market share in the upcoming years. Europe, on the other hand, has encountered setbacks with several planned battery factories experiencing delays and cancellations. These setbacks primarily stem from high energy prices and the attractiveness of other countries with pro-clean energy and EV manufacturing policies, which have successfully lured projects away from the region.
The rapid growth in battery factories can be attributed to the increasing adoption of electric vehicles (EVs). According to the International Energy Agency’s “Global EV Outlook 2023,” EV sales exceeded 10 million in 2022, with electric vehicles accounting for 14% of all new car sales. This represents a significant increase from approximately 9% in 2021 and less than 5% in 2020. With the global EV market on the rise, battery and EV manufacturing are poised to experience substantial growth.
Looking ahead, CEA forecasts an impressive two-year growth rate of 186% based on the 1,706 GWh of batteries produced in 2022. The report paints an optimistic picture of the future, as the demand for EVs continues to surge, further driving the expansion of battery production facilities worldwide. North America’s rise as a leading market in battery cell manufacturing showcases the region’s commitment to clean energy and its position at the forefront of the electric vehicle revolution.
