The report indicates that in 2022, global electric vehicle (EV) battery demand witnessed a staggering 65% increase, soaring to approximately 550 GWh, nearly matching the EV battery production levels. However, the lithium-ion automotive battery manufacturing capacity during this period only reached around 1.5 TWh for the year, resulting in an estimated utilization rate of 35%, a slight decline from the 43% recorded in 2021.
As we look ahead to the future, the demand for batteries is set to undergo a monumental transformation. By 2030, it is projected to surge beyond 3 TWh in the Sustainable Transition Energy Pathway Scenario (STEPS) and reach approximately 3.5 TWh in the Advanced Policy Scenario (APS). To meet this exponential demand, the world would require the construction of over 50 gigafactories, each with an annual production capacity of 35 GWh, by 2030 in STEPS. In the APS, this number rises to nearly 65 new gigafactories.
Private companies have risen to the challenge, with announced battery production capacity for EVs in 2030 amounting to a remarkable 6.8 TWh as of March 2023. This capacity appears to be more than sufficient to meet the demand projected in both the STEPS and APS, as well as in the Net-Zero Emission (NZE) Scenario, where battery demand could exceed 5.5 TWh in 2030. It is estimated that an average utilization rate of 85% in battery production facilities would adequately cover the needs of the NZE Scenario.
Interestingly, China, a dominant player in EV battery demand up until 2025 in both the STEPS and APS, is expected to see a decline in its share of EV battery demand in 2030. While accounting for over 55% in 2022, China’s share is projected to decrease to about 35% by 2030. This shift is attributed to significant growth in EV sales across the United States, Europe, and other emerging markets.
Looking into the future of electric mobility, it is evident that electric cars and vans will continue to be the primary drivers of battery demand, accounting for approximately 90% of total demand in both STEPS and APS scenarios. Nevertheless, buses and two/three-wheelers are also expected to witness significant growth, with battery demand projected to reach 120 GWh for buses and 160 GWh for two/three-wheelers by 2030 in the APS. Trucks, too, will play a substantial role, with demand increasing to about 80 GWh in the STEPS and 170 GWh in the APS by the same year.
The report’s findings illustrate a transformative period for the global battery industry, with significant strides being made to accommodate the soaring demand for electric vehicles. As governments, companies, and consumers unite in the pursuit of a sustainable future, the battery sector is proving to be at the forefront of driving the electrification revolution.
Source: Global EV Oulook 2023 | IEA Visual source: Benchmark Mineral Intelligence
