Who is winning the global lithium ion battery arms race?

The rise of electric vehicles (EVs) has caused upheaval in the lithium ion battery industry.

Before Elon Musk announced Tesla’s intention to build the world’s biggest lithium ion battery plant, The Gigafactory 1, lithium ion batteries were somewhat of a cottage industry geared to supplying a mobile consumer market for smartphones, laptops, and power-tools.

As we firmly settle into the 21st Century, the lithium ion battery industry has become one of the most critical globally as its role in the energy storage revolution becomes more and more apparent.

Lithium ion battery powered EVs are becoming larger in capacity and being built quicker than the majority expected.

The energy storage (ESS) market – large battery packs that can store renewable, off-grid energy – is also growing at a much quicker rate, particularly for Peaker Plant replacements at times of high demand.

Both new markets have become heavily lithium ion-dependent which has resulted in a lithium ion battery growth trajectory that vastly exceeds expectations of just a few year ago.

Lithium ion battery demand has grown from a production base of 19GWh in 2010 from a capacity of 30GWh, to a production of 160GWh in 2019 from a capacity of 285GWh.

In the next decade, the industry is heading into a multi-terrawatt (TWh) world as major cell producers build a blueprint of battery megafactories across multiple continents.

Benchmark Minerals’ Lithium ion Battery Megafactory Subscription now has 68 plants in the pipeline with a total capacity of 1.45TWh by 2028, as of our January 2019 assessment (Request a trial).

Only 4 years ago in Q1 2015, only three megafactories were planned.

This pace of the global battery arms race has led to several incorrect news articles, data points and commentary with regards to who is the world’s biggest lithium ion battery company. Here, Benchmark Mineral Intelligence outlines its new data to set the record straight.

Who is the world’s biggest lithium ion battery company by capacity?

lithium ion battery production

LG Chem: A multi-continent assault 

Cell capacity expansion at LG Chem saw the South Korean lithium ion battery producer rise to the number one spot with a capacity of 51GWh in 2018, exclusive data from Benchmark Mineral Intelligence has shown.

LG Chem has been one of the most aggressive in expanding its lithium ion cell capacity in the last two years and has pushed ahead with a five megafactory approach on three continents.

The battery producer’s new flagship plant in Poland became one of the world’s largest in 2018, while it expanded its cell facility in Nanjing, China and committed to building a second facility adjacent to this plant by 2023.

2018 was also a good year for LG Chem’s lithium ion battery plant in Holland, Michigan, US which implemented an expansion for its existing Chevrolet and Chrysler models and in a bid to gain new business from the North American EV space.

The fifth battery megafactory in the LG Chem portfolio is its Ochang, Korea facility which is only expected to expand to meet existing customer demand from Japanese and Korea clients such as Nissan’s LEAF.

It may come as some surprise that the Chinese lithium ion battery champions, CATL, together with BYD, Panasonic or Tesla do not have the world’s biggest battery production base despite well publicised successes.

In fact, these four battery producers sit in second, third, fourth and fifth place, respectively, as they all build out new production bases for the global EV and energy storage demand surge.

CATL: Jiangsu megafactory leads expansions

CATL, the lithium ion cell manufacturer that has very much become the Chinese champion for this mid-section of the supply chain, continued to increase its expansion plans for the future on the back of its IPO in June 2018.

It announced two new lithium ion battery plants in Germany and Guangzhou while expanding its primary production base in Ningde.

Meanwhile, its biggest expansion of 2018 was at its Jiangsu battery plant which tripled in size to supply China’s EV and energy storage markets.

CATL’s total present lithium ion battery capacity sits just under 40GWh a year.

One of the major challenges for CATL is to produce at the same quality as the battery industry’s tier one suppliers, Panasonic, Samsung SDI, and LG Chem.

Quality has been one of the major concerns for western electric vehicle manufacturers that are seeking multi-gigawatt-hour supply of lithium ion battery cells on an annual basis.

While CATL has been a part of these major supply chain discussions, the balance of power lays, at present, with its Korean and Japanese counterparts.

BYD: Qinghai battery plant doubles capacity

BYD, China’s premier EV producer which is vertically integrated to supply its own lithium ion battery needs, opened its newest battery megafactory in Qinghai in 2018 which essentially doubled the company’s EV lithium ion battery capacity.

The battery megafactory doubled down on BYD’s commitment to supply chain integration as it pushes to build a huge lithium carbonate plant in the same region.

BYD also announced two new plants in Shaanxi and Chongqing, which took its number of megafactories in the pipeline to five.

The new plants are expected to come onstream in 2023 while the company has also expanded its existing cell facility in Shenzhen with new NCM and LFP lines. BYD’s fifth plant, for which there is presently no plans to expand, is based in Huizhou.

Panasonic – Tesla: Gigafactory 1, the industry’s benchmark

Panasonic and Tesla, which should be mentioned in the same sentence as the industry’s most successful automotive and battery joint-venture to date, continued to outperform expectations.

The Tesla Gigafactory 1, of which Panasonic is a shareholder, expanded its 2018 capacity to 22GWh in 2018 while the company was operating at a utilisation rate of 92%, the highest in the lithium ion battery industry.

This has given Tesla the confidence to push ahead with the Gigafactory 3 in China, plans for which have crystallised over the last six months.

While the new fully integrated battery to EV plant will not be producing cells any time soon, it has entered Benchmark Minerals’ Lithium ion Battery Megafactory Assessment in 2023 at a capacity of 15GWh.

In the next three years, Tesla are expected to rely on Chinese lithium ion battery producers or at least Chinese-based cell production to supply Model 3 and the newly planned, Model Y.

Outside of the Gigafactory, Panasonic already operates four lithium ion battery plants in Japan and its new facility in Dalian  is expected to be one of its largest facilities.

In total, this has given Panasonic a capacity base of 20.5GWh outside of the Gigafactory. A large proportion of this is in the form of 18650 cells produced at Suminoe and consumed by Tesla in the Model S and Model X.

Perhaps the most defining development for Panasonic was announced in late-January 2019.

Toyota and Panasonic will form a joint-venture (51:49) company to develop and produce lithium ion, solid state and other next-generation battery technologies for the automotive industry.

The synergies are clear for both players that have dragged their heels in the lithium ion powered EV race.

For Toyota, the world’s second largest auto producer in 2018, it is a rapid route into the lithium ion powered EV space after spending so many years pushing for fuel cell technology.

For Panasonic, it ties in a major auto producer that manufactures in the double-digit millions of units and reduces its reliance on Tesla.

It is also the first major deal in a trend that is seeing the automotive sector and lithium ion battery space become increasingly integrated.

What is the world’s biggest lithium ion battery plant?

battery megafactories

Tesla and Panasonic have taken this crown in 2018 as the world’s biggest lithium ion battery plant after Gigafactory 1 reached a capacity of 22GWh.

The world’s second biggest lithium ion battery megafactory was LG Chem’s Nanjing plant in China which reached a capacity of 20GWh last year – a similar size to Tesla’s Nevada base yet a fraction of the footprint as it does not produce battery packs onsite.

It is also a similarly impressive yet rarely mentioned feat by LG Chem considering the megafactory only opened in 2016.

In joint-second place was CATL’s primary cell production base in Ningde, China while its plant in Liyang, Jiangsu was in fourth place.

The world’s fifth largest lithium ion battery megafactory, according to Benchmark Minerals’ Lithium ion Battery Megafactory Assessment was yet another new plant, LG Chem’s Poland facility which had a capacity of 15GWh and seems to be in a state of perpetual expansion.

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At Benchmark Minerals we produce the world’s primary data on lithium ion battery production, capacity and forecasts via our subscriber service, the Lithium ion Battery Megafactory Assessment.

We have been collecting and analysing this data since the first ever megafactory was announced in 2014 and last year launched a formal assessment of these new battery plants that are expanding to multi-gigawatt-hour capacity.

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All data is from Benchmark Minerals’ Lithium ion Battery Megafactory Assessment. To subscribe email Caspar Rawles, [email protected]

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