While China is currently winning the race to manufacture lithium-ion batteries with 93 gigafactories, the US is racing to build up and expand capacity to grab market share as the EV sector is set for rapid growth. AME expects annual production of EVs will grow from 3m in 2020 to more than 11m by 2025.
The US
currently has five operational battery plants, with Tesla controlling most
production. AME estimates that the US had an annual installed li-ion battery
production capacity of 54GWh in 2020, more than Europe's 18GWh but much less
than China's 332GWh.
The US
has another eight li-ion battery plants in our 'probable' category (under
construction or late-stage development) and another five in our 'possible
category' (announcement stage). In our base case (existing expansions and 'probable'
sites), we expect US battery production capacity to grow to 235GWh by 2025, more
than tripling compared to 2020. In our ambitious case (including 'possible'
sites) we expect capacity would grow by to at least 310GWh by mid-century.
By
2025, global installed capacity is forecast to rise 300% to ~1,700GWh. China
will continue to be the biggest player, with CATL aiming to raise capacity to an
incredible 600GWh by mid-decade, but the US, together with Europe, are hot on
its heels to shore up future economic competitiveness, lower emissions, create jobs
and safeguard national security.
Carmakers and battery producers are increasing
their investments in the component that accounts for around 30% of an EV’s
total cost. While BYD, Tesla and Great Wall are still the only automakers to be
fully integrated in battery production, their car making rivals are rushing to
get into batteries. Automakers are also seeking to integrate and localise
battery production to lower costs, avoid tariffs and shore up supply chains. The
majority of US battery facilities under development are partnerships with South
Korean battery makers looking to gain ground in one of the world's largest
markets.
A "gigafactory" is, by all means, a
factory of epic size. It builds commercially usable energy cells and batteries
from start to finish—basically, raw materials come in one end, and finished
products come out the other. According to Tesla CEO Elon Musk, it is "the
machine that builds the machine." The
“giga” comes from gigawatt-hour (GWh), which is enough energy to power one
million homes for an hour.
EV batteries today are typically between 40 to
100 kilowatt-hours (kWh) capacity. That means a 39GWh a year plant can make
39,000,000 kilowatt-hours of batteries, or enough to power roughly 390k-975k
EVs.
Battery costs are falling, and the lower they
go, the closer EVs get to reaching parity with internal combustion engine cars.
The industry is aiming for US$100/kWh, which would mean an 85kWh battery pack
would cost US$8,500.

Tesla
Gigafactory 1 (Nevada) Production
Tesla’s
US$5bn gigafactory in Sparks, Nevada, which is part of a partnership with
Panasonic, has a 35GWh capacity. Panasonic produces 2170 battery cells, and
Tesla produces battery packs for Model 3, Model Y, Powerwall, Powerpacks,
Megapacks, and drivetrains for its EV lineup. The plant produced its 1
millionth battery pack in September since operations began in 2017.
Panasonic
said in December last year that it would add a 14th production line for US$100m,
increasing capacity by 10% to 39GWh and would lift each battery's storage capacity
by 5%. Tesla said last year that it had plans to produce its own larger tabless
battery cell, known as 4680, which were touted as having five times the energy
density and six times the power of its Panasonic-built 2170 cells. But existing
supplies may well deliver it before Tesla. Panasonic's new chief executive
confirmed the company will make a large investment to build 4680 cells if they
prove viable.

Tesla Pilot Plant (California) Production
Tesla's mothership plant in Fremont, just outside San Francisco,
comprises 5.3 million sq. ft. and has an estimated li-ion battery capacity of
10GWh. The plant, which employs 10k, builds the Model S, Model X, Model 3, and
Model Y, along with a majority of each EV’s components. CEO Elon Musk said this
month that the company plans to increase Fremont's output by 50% in the next
couple of years and that it would produce 4680 batteries. Tesla purchased the former
General Motors facility in 2010 and extensively remodelled it before the first
Model S rolled off the line in 2012.
Meanwhile, Tesla announced in September that it has broken ground on a
new California-based facility called ‘Megafactory’ in Lathrop. Tesla said that
its Megapacks were sold out “through the end of next year,” as the energy
storage product continues to experience high demand as sustainable energy
projects grow. They cost US$1m each.
Envision AESC (Tennessee) Production
Envision has a 3GWh-capacity plant in Tennessee, which has been in
operation since 2012. The company's annual production capacity totals 7.5GWh—3GWh
in Tennessee, 2.6GWh in Kanagawa, Japan, and 1.9GWh in Sunderland, UK. Envision
is aiming to boost capacity at Sunderland to 9GWh, build another 9GWh plant in
France and construct a 20GWh plant in Wuxi, China—which would raise capacity to
43.6GWh.

LG Energy Solution (Michigan) Production
LG Energy
Solution, the US unit of LG Chem, will expand capacity at its existing 5GWh li-ion
battery plant in Holland, Michigan. The company will add new facilities on the
same site, which began commercial operations in 2013.
LG said
it plans to invest more than US4.5bn to expand its battery production capacity in
the US by 2025, resulting in an additional 70GWh of battery production
capacity. This comes on top of the two joint-venture plants it will operate
with General Motors that are part of Ultium Cells LLC. LG has said that
none of the materials for its US market cells are currently sourced from China
and it had no plans to do so in the future.
Clarios Power Solutions (Michigan) Production
Clarios
Power Solutions operates the Meadowbrook lithium-ion battery manufacturing plant
in Holland, Michigan. It specializes in manufacturing prismatic lithium-ion
battery cells primarily used in the automobile and electronics industries. The 41,000-square-foot
Holland plant has supplied batteries to Mercedes Benz, General Motors and
Jaguar Land Rover.
The
company was known as Johnson Controls until May 2019, when it was acquired by
Canadian investment firm Brookfield Business Partners in a US$13bn deal. Clarios
accounts for over one-third of the automotive industry's total annual output of
lead acid batteries.
SK Innovation (Georgia) Probable
SK Innovation is constructing two battery plants worth US$2.6bn in
Georgia, which will supply EV batteries to Ford and Volkswagen. The first
9.8GWh plant is set to begin operations in the March quarter of next year, with
the second 11.7GWh plant scheduled for mass production in 2023. The second
plant is dedicated to batteries to be used in Ford’s F-150 pickup.
The world's sixth largest battery cell manufacturer will spend KRW30tn
(US$26.5bn) to ramp up global battery production capacity from the current
40GWh to 200GWh in 2025, in the hopes of generating KRW2.5tn (US$2.2bn) in
earnings. SK currently has battery production sites in South Korea (34.5GWh),
China (27GWh) and Hungary (7.5GWh). Going forward, SK's two Georgia plants,
coupled with its BlueOvalSK plants, means it will have a 150GWh capacity in the
US alone.
Tesla (Texas) Probable
Tesla is
aiming to start production at Gigafactory Texas by the end of the year and
reach volume production by the end of 2022. The goal of Gigafactory 5 is to
produce both the Model 3 and Model Y for easier distribution to the Eastern US.
It is planned to be the main factory for both the highly anticipated Cybertruck
and Semi. The US$1.1bn plant is expected to employ 10k. Tesla has not disclosed
the production capacity.
GM, LG Chem (Ohio) (Tennessee) Probable
General
Motors, with joint-venture partner LG Chem, is currently building a
35GWh-capacity battery plant in Lordstown, Ohio, set to be complete in 2022. The
US$2.3bn, 2.8-million-square-foot plant is expected to create 1,100 jobs. The
plant will produce GM's new nickel-intensive Ultium cells.

The
cells, developed with LG Chem, use an NMCA chemistry—nickel, manganese, cobalt,
and aluminium— for the cathode. GM says it has reduced the use of cobalt by 70%
and lowered the amount of wiring by 80% compared to the cells in a Chevrolet
Bolt EV and plans to source as many materials from North America as possible. Because
of these cost reductions, GM Chairman and CEO Mary Barra said Ultium batteries
will be able to breach the holy grail $100/kWh barrier "early in the
platform's life".
The
companies will also build a second 35GWh-capacity Ultium cells plant near GM's
assembly plant in Spring Hill, Tennessee. It is expected to come online in late
2023. GM said in October it would invest US$2bn in the Spring Hill assembly
plant to build EVs, including the Cadillac Lyriq. In January, the automaker
said it would spend US$2.2 billion to retrofit its Detroit-Hamtramck plant to
produce EVs.
The
plants will help GM reach its goal to introduce 30 new EVs globally and exceed
1m of annual EV sales in the US and China by 2025.
Ford, SK Innovation (Tennessee) (Kentucky x 2) Probable
Ford is teaming up with South Korea’s SK Innovation to manufacture
battery cells at three US plants to accelerate its EV rollout. The joint
venture, called BlueOvalSK, will invest US$11.4bn to build an assembly and
battery plant in Tennessee, and two other battery factories in Kentucky. The
investment is Ford's largest in its 118-year history. The BlueOvalSK battery
plants will be the largest ever in the US with an annual production capacity of
129GWh (43GWh at each plant)—enough to supply 2.15m EVs a year. The Tennessee
plant and one of the Kentucky plants are planned to begin production in 2025
with the second Kentucky plant coming on line in 2026.
Ford in May raised its investments in EVs to US$30bn through 2025. The
automaker expects electric cars to make up 40% of its production by 2030. Ford
has gone from being a relative latecomer to EVs to making them a central focus.
Microvast (Tennessee) Probable
Li-ion vertically
integrated battery maker Microvast is constructing a new US$220m battery
manufacturing facility in Clarksville, Tennessee. The Houston-based company
currently operates plants in Huzhou, China and Ludwigsfelde, Germany. In July,
the company went public through a merger with a SPAC. Microvast said the
project "started in 2019 at the request of the US Department of Energy
(DOE)".
Its
third generation, "HnCO" (NCM) battery reached an energy density of
265Wh/kg in February 2021. The company also produces LFP and LTO cells. It is
currently working to produce a high energy density, cobalt free, fireproof,
extreme fast charging (XFC) battery, which is expected to cost less than US$100/kWh.
Microvast, which has signed contracts at a total value of over US$1.5bn, plans
to increase production capacity to 11GWh in 2025, from 3GWh in 2020.
QuantumScape (Unknown) Possible
QuantumScape,
a Silicon Valley start-up backed by Volkswagen and Bill Gates, is aiming to make
solid-state lithium metal batteries for EVs. It announced earlier this year
that it would build a pre-pilot line facility in San Jose, known as QS-0, to
deliver 100k cell samples by 2023. Meanwhile, its other pilot plant, a JV with
VW, known as QS-1, will start production at a 1GWh scale in 2024-25 before
expanding to 20GWh.
The
company is targeting an energy density of close to 400Wh/kg, from roughly
260Wh/kg in today’s EVs. It claims its technology could reduce charging times
to under 15 minutes, while also making EVs safer by avoiding the use of
flammable liquids.
VW,
which has invested US$300m in QuantumScape and holds a 20% stake, hopes to
deploy its cells in 2025. It has also committed an undisclosed sum to help it
build a pilot factory. The company said in September that it had signed an
agreement to supply another top global automaker to provide 10MWh of batteries
from QS-0.
LG, Stellantis (Unknown) Possible
LG Energy Solution and automaker Stellantis are launching a US$3.4bn
joint venture to build a 40GWh battery manufacturing facility in the US. The JV,
announced on Oct. 18, plans to break ground on the new plant in the June
quarter of 2022 with an aim to start production by the March quarter of 2024. The
location was not disclosed.
Once completed, the facility will raise LG’s total capacity in North
America to 150GWh. The batteries
produced at the new gigafactory will be supplied to Stellantis assembly plants
throughout the US, Canada, and Mexico. Stellantis is aiming to have EVs
comprise more than 40% of its sales in the US by 2030. The world's fourth
largest automaker is investing more than EUR30bn in EVs and software through
2025.
Samsung SDI, Stellantis (Unknown) Possible
Samsung SDI has partnered with automaker Stellantis to build a
multi-billion-dollar battery facility in the US. The companies will begin
producing cells and packs in 2025, starting with a production capacity of
23GWh, before expanding to 40GWh. The location of the plant and the
construction schedule was not disclosed. The Oct. 19 announcement came a day
after LG announced its battery JV with Stellantis.

Samsung SDI has been the only major Korean battery maker without a
production facility under development in the US. Currently, the company
operates battery manufacturing plants in Korea, Hungary and China, supplying
batteries to customers such as BMW and Ford Motor. In the US, it runs a battery
pack assembly line in Michigan.
Stellantis is diversifying its battery procurement sources by forging partnerships
with both LG Energy and Samsung SDI to secure various types of batteries for
the swath of brands under its umbrella. It will likely receive prismatic and
cylindrical types of batteries from LG Energy and pouch and cylindrical types
from Samsung SDI. Stellantis, through its joint ventures, aims to have an
annual battery production capacity of 50GWh in North America by 2025, and
further raise it to 90GWh by 2030.
Toyota (Unknown) Possible
Toyota plans to build a new US$1.29bn factory in the US to manufacture
batteries for gas-electric hybrid and EVs. The plant location was not
announced, but the company said it will start making batteries in 2025,
gradually expanding through 2031. The plant is part of US$3.4bn that Toyota plans
to spend in the US on automotive batteries during the next decade.
The new plant would likely be near one of the company’s US assembly
plants in Missouri, Kentucky, Indiana, Alabama, or Texas. Toyota plans to sell
2m hydrogen and battery EVs worldwide a year by 2030. In the US, it plans to
sell 1.4-1.8m vehicles by 2030 that are at least partially electrified.
Freyr, Koch Strategic Platforms (Unknown) Possible
Norwegian battery cells developer Freyr Battery and Koch Strategic
Platforms have formed a joint venture to build a 50GWh gigafactory in the US. The
parties will aim to reach a final investment decision in 2022 and commence
operations in 2030 on the project which would use 24M Technologies' semi-solid
technology. The two firms have made a joint US$70m investment in the battery
technology developer.
