Battery Manufacturing Outlook and Trends
Description
Battery Manufacturing Outlook and Trends
Summary
Recent years have seen a strong expansion of global battery manufacturing capacity in anticipation of sharp increases in demand from both the electric vehicle and stationary energy storage markets, as well as countries’ efforts to establish domestic supply chains. However, this strong build-out has largely exceeded the pace of demand increase, and numerous markets are now grappling with overcapacity. Despite industry headwinds, GlobalData forecasts that both battery electric vehicles (BEVs) and Battery Energy Storage Systems (BESS) will still present major demand drivers for battery manufacturing, with strong growth rates forecast over the next five years.
China remains the largest source of battery manufacturing capacity globally, with a strong suite of domestic manufacturers, including monoliths in the form of EV cell suppliers CATL and BYD. Despite rising domestic competition in China’s battery market forcing firms to reduce pack prices, China also remains the biggest contributor to Li-ion battery plants that are currently under construction, a project pipeline that represents over $275B in spending. Although the prices of core minerals such as lithium have fallen sharply from their 2022 peak, a future price increase could accelerate industry consolidation in China’s crowded battery market.
The US is the second largest contributor to pipeline Li-ion battery plants, with a strong increase in project activity taking place in response to clean manufacturing incentives set out under the Inflation Reduction Act, such as the 45X Manufacturing Credit. However, an end to federal clean vehicle tax credits and amendments to the 45X have spurred a wave of battery plant cancellations in 2025 and are expected to continue to dampen battery plant construction activity moving into 2026.
Key Highlights
Summary
Recent years have seen a strong expansion of global battery manufacturing capacity in anticipation of sharp increases in demand from both the electric vehicle and stationary energy storage markets, as well as countries’ efforts to establish domestic supply chains. However, this strong build-out has largely exceeded the pace of demand increase, and numerous markets are now grappling with overcapacity. Despite industry headwinds, GlobalData forecasts that both battery electric vehicles (BEVs) and Battery Energy Storage Systems (BESS) will still present major demand drivers for battery manufacturing, with strong growth rates forecast over the next five years.
China remains the largest source of battery manufacturing capacity globally, with a strong suite of domestic manufacturers, including monoliths in the form of EV cell suppliers CATL and BYD. Despite rising domestic competition in China’s battery market forcing firms to reduce pack prices, China also remains the biggest contributor to Li-ion battery plants that are currently under construction, a project pipeline that represents over $275B in spending. Although the prices of core minerals such as lithium have fallen sharply from their 2022 peak, a future price increase could accelerate industry consolidation in China’s crowded battery market.
The US is the second largest contributor to pipeline Li-ion battery plants, with a strong increase in project activity taking place in response to clean manufacturing incentives set out under the Inflation Reduction Act, such as the 45X Manufacturing Credit. However, an end to federal clean vehicle tax credits and amendments to the 45X have spurred a wave of battery plant cancellations in 2025 and are expected to continue to dampen battery plant construction activity moving into 2026.
Key Highlights
- Recent years have seen a strong increase in capacity across all phases of the battery production value chain in response to the expected increase in demand from both electric vehicles and stationary energy storage systems.
- For example, GlobalData’s recent Critical Mineral report identified a strong increase in the mined production capacity of battery metals, with lithium production increasing by 34% between 2020 and 2024.
- In the mid and downstream portion of the value chain, which refers to the production of battery cells and the assembly of modules and battery packs, there has also been an increase in new project activity.
- According to GlobalData’s construction project tracker, there are over 700 lithium-ion battery plants currently in active pipeline. This pipeline of construction projects amounts to almost $700B in project spending.
- Overview of battery manufacturing plant construction activity, as well as demand trends from the stationary energy storage and electric vehicle sectors.
- Understand the prevailing trends across battery manufacturing plants, including identifying key growth markets.
- Gain an understanding of key demand trends across both the stationary energy storage and electric vehicle sector.
- Stay informed about the latest shifts in battery innovation.
Table of Contents
19 Pages
- Executive Summary
- Key trends across battery manufacturing
- Battery plant construction projects amount to almost $700B in project spending
- Asia Pacific leads project spending by a strong margin
- Leading countries by Li-ion battery plant project spending
- BEV and hybrids are forecast to account for 61% of light vehicle sales in 2030
- Lithium Iron Phosphate (LFP) dominated EV battery production in 2025
- CATL, LGES, and BYD continue to lead the battery cell supplier's market
- Battery energy storage capacity is set to increase strongly by 2030
- Lithium-ion remains the dominant sub-technology for upcoming BESS projects
- Key trends driving innovation within battery manufacturing
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