Asia is a hub for EV battery manufacturers, accounting for the majority of the global EV battery industry, with China, Japan, and South Korea at the top of the pyramid. Other Asian countries, such as Indonesia and Thailand, have increased their investments in the EV battery sector to capitalize on Asia's growth opportunities. The presence of the world's largest EV battery manufacturers, such as CATL, LG Energy Solution, and BYD, is the most significant factor attributed to Asia’s dominance.
However, as market opportunities in the electrical vehicle industry expand, manufacturers in the United States and Europe are increasing domestic production of EV batteries to increase their market share.
Growing Demand for EV Batteries in Europe
The region is witnessing continuous demand growth for EV batteries. Around 6.80 million units were sold in Europe in the year 2021, up from 4.41 million units in 2020. Hence the market players are planning to capture the local market by increasing their production capacity and reducing reliance on Asian manufacturers for EV battery imports.
European Companies are Gearing up to Race Against Leading Asian EV Battery Manufacturers
European companies intend to build giga-factories to compete with Asian EV battery manufacturers. The European Union established the European Battery Alliance in 2017 to kick-start a homegrown industry, with the goal of supplying 90% of the batteries required by 2030.
However, Europe's goal of competing with Asia is hampered by a lack of investor confidence in European EV battery manufacturers. For example, Britishvolt, a U.K.-based startup, is having difficulty raising the $4.4 billion needed to build a giga-factory in northern England.
Due to a lack of funds, several European startups are taking a more cautious approach, constructing smaller, cheaper plants with capacities less than 1 giga-tonne-hour (GWh)," to produce cells at scale and eventually acquire new contracts from carmakers.
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