China is dominating the battery production game for electric vehicles (EVs) according to Bloomberg New Energy Finance (BNEF). They estimate that the global demand for EV and energy storage batteries will reach around 950 gigawatt-hours (GWh) in 2023, but China’s manufacturing capacity is more than double that at 2,600 GWh.
This means China alone nearly produced enough batteries to meet global demand in 2023. Seeing this, the US, Canada, Europe, and India are ramping up their own battery production to compete with China, which could further widen the gap between battery supply and demand.
Analysts at BNEF predict a massive surplus in battery production capacity. They estimate factories will be able to produce 7,900 gigawatt-hours of batteries annually by the end of 2025. While demand is only projected to reach 1,600 gigawatt-hours – that’s enough to equip every new car sold globally in 2024 with a decent battery pack if production meets projections.
This oversupply, combined with a shift from lithium scarcity to a glut has led to dropping battery prices across the board for cars, trucks, and even energy storage systems. While there were some concerns about price hikes in 2022, considering inflation, battery costs have actually continued to fall in real terms.
