Emerging markets drive giga surge as US outpaces Europe in investment

Emerging markets drive giga surge as US outpaces Europe in investment

Emerging markets drive giga surge as US outpaces Europe in investment 635 499 Energy Storage Journal

December 15, 2022: Thirteen gigafactories being built in seven emerging markets are set to lead a surge in batteries capacity to around 104GWh by the end of the decade, according to new analysis published on December 13.

Benchmark Source’s Gigafactory Assessment says the new plants being built across seven countries including Malaysia, Indonesia and India would be enough for nearly two million EVs.

Further analysis by Benchmark indicates that the US is outpacing Europe in the battery gigafactories investment race, following tax incentives unveiled by the federal government in the Inflation Reduction Act (IRA) in August.

A total of 242GWh of battery capacity was added to the US pipeline in the second half of the year, an increase of 34.3% since July, according to Benchmark’s separate Lithium ion Battery Gigafactory Assessment, released on November 23.

In comparison, Europe’s battery capacity pipeline has increased by 16.7% or 170 GWh over the same period, with Chinese companies responsible for all new gigafactories.

“The IRA announcement can be clearly seen within the announced North American pipeline, and while the European pipeline has increased, that growth is more stable, continuing the trend seen throughout the year,” said Evan Hartley, an analyst with Benchmark.

In its December 13 Gigafactory Assessment, Benchmark says the list of developing economies where 13 gigafactories are being built includes Turkey, where South Korea’s SK Innovation plans to build a battery plant with Ford and local player Koç Holding.

The plant in Ankara is to start production of high-nickel NCM (nickel, cobalt, manganese) batteries in 2025.

Benchmark says the developing economies’ gigafactories should come online by as early as 2026 and add about 78GWh capacity initially, which would be scaled to 104GWh by the end of 2030, led by Malaysia.

According to the analysis, the gigafactories would contribute about 37.6% of Asian (excluding China) capacity of 205GWh by the end of 2026 and about 40.5% by the end of 2030.

Benchmark says the investment in gigafactories in emerging markets comes as EV sales start to accelerate in Southeast Asia and India, highlighting the growth potential beyond the major developed markets.

Graphic: Benchmark Gigafactory Assessment