European Battery Cell Production Expands

Q4 2021

Current market developments show that the European automotive industry is well on track achieving the EU's emission reduction targets. Sufficient battery cells produced in Europe will be available to ensure a substantial electrification of drive technologies in the future.

The ambitious climate and emissions targets set by the EU Commission's climate package as well as by individual member states and car manufacturers will result in a significant increase in need and demand for battery cells in the coming years. Correspondingly, high production capacities will have to be built up and expanded in Europe timely.

The enormous demand for Li-ion cells from the automotive industry in the years ahead can be met by the planned development and expansion of production capacities in Europe. Based on the demand of the progressive scenario, the supply of cells from European production is given if almost all announced production capacities will be realised.

If the share of battery-electric vehicles in total production increases according to the conservative scenario, which would be sufficient to meet the requirements of the currently applicable EU regulation, the cell demand of the automotive industry would already be covered from 2023 by the production capacities assumed to be ensured.

However, whether the supply of batteries can meet demand depends on a sufficient supply of semiconductors and raw materials to the industry. To counteract the threat of raw material shortages, recycling capacities are being successively built up, the utilization of alternative raw material deposits is being evaluated, and research is being conducted on novel cell chemistries that use fewer or no critical raw materials.

Find all updates on the battery cell market here

Ongoing momentum in the battery cell market

Q2 2021

Current market developments show that Europe is likely to achieve the ambitious goal of supplying around 30% of the global demand for battery cells from German and European production by 2030. The European automotive industry can plan for battery cells from domestic production in the future.

The ambitious climate and emissions targets set by the EU Commission's climate package as well as by individual member states and car manufacturers will result in a significant increase in need and demand for battery cells in the coming years. Correspondingly, high production capacities will have to be built up and expanded in Europe timely.

The enormous demand for Li-ion cells from the automotive industry in the years ahead can be met by the planned development and expansion of production capacities in Europe. Based on the demand of the progressive scenario, the supply of cells from European production is given if almost all announced production capacities will be realised.

If the share of battery-electric vehicles in total production increases according to the conservative scenario, which would be sufficient to meet the requirements of the currently applicable EU regulation, the cell demand of the automotive industry would already be covered from 2023 by the production capacities assumed to be ensured.

However, whether the supply of batteries can meet demand depends on a sufficient supply of semiconductors and raw materials to the industry. To counteract the threat of raw material shortages, recycling capacities are being successively built up, the utilization of alternative raw material deposits is being evaluated, and research is being conducted on novel cell chemistries that use fewer or no critical raw materials.

Registrations of electrically driven vehicles increase significantly – despite contrary market development In 2020, the European sales volume of electric vehicles increased significantly. As a result, the number of Chinese new registrations was surpassed for the first time. In the European Union (EU), 144% more battery-electric vehicles and 266% more plug-in hybrids were newly registered in the passenger car (M1) vehicle class in 2020 than in the previous year. However, new registrations of electrified vehicles also increased in the segments light commercial vehicles (LCV; N1) and buses (M2/3) by 38% and 9% respectively.

Total vehicle sales in Europe in 2020 fell considerably compared with the previous year, partly due to the Covid crisis. Due to the simultaneous significant increase in electrically powered vehicles, their market share has more than tripled compared to the previous year for passenger cars, almost doubled for LCV and increased by almost 50% for buses (see Figure below). This rapid increase in vehicle sales led to an equally sharp rise in demand for battery cells. According to an extrapolation based on new registrations in the EU in 2020, demand has risen to around 35 GWh, an increase of 121% year-on-year.

Contact

Project Management Accompanying Research
Battery Cell Production
VDI/VDE Innovation + Technik GmbH
Steinplatz 1
10623 Berlin
Germany