Chinese lithium-ion battery makers accelerate production expansions overseas

Chinese lithium-ion battery companies have been accelerating production expansions overseas, as Europe and the U.S. step up localization requirements, strengthening ed demand in non-China markes. Based on incomplete statistics from InfoLink's Global Lithium-lon Battery Supply Chain Database, leading lithium-ion battery manufacturers of China have put into operation six cell factories overseas, accumulating a planned production capacity exceeding 579 GWh (only include cell capacity cs of December 31, 2023), with 198.5 GW being added in 2023.

 

Production capacity by regional 

Chinese manufacturers have allocated the most resources in Europe, with a planned capacity of 353.4 GWh across 14 projects, mainly concentrated in Hungary and Germany. The U.S. follows with a planned capacity of 144 GWh, primarily driven by joint venture projects of Envision, Gotion High-tech, CATL (with Ford), and EVE Energy. Southeast Asia, an emerging market in 2023, has a planned capacity of 41 GWh mostly  in Malaysia, Indonesia, Vietnam, and Thailand. East Asia, particularly Japan, has a planned capacity of 20.6 GWh, primarily driven by Envision and Nissan's electric-vehicle battery (EVB) project. In the Middle East, Farasis Energy through joint ventures is the only investor. Still, the sentiment is high. Chinese projects are likely to post continuous progress. 
 

Source: InfoLink's Global Lithium-lon Battery Supply Chain Database
 

Overseas expansion of Chinese lithium-ion battery companies

According to incomplete statistics from InfoLink's Global Lithium-lon Battery Supply Chain Database, Envision, CATL, and Gotion High-tech are the most proactive Chinese lithium battery companies expanding overseas. Leveraging its international foundation from the Nissan era, Envision has been vigorously developing its production capacity in Europe and the U.S., with a non-China planned capacity exceeding 150 GWh. CATL, focusing on Europe, has been ramping up production capacity to nearly 145 GWh. Gotion High-tech, endorsed by the major shareholder Volkswagen, is actively promoting the construction of overseas factories in Europe and the U.S., with an 85 GWh planned capacity.
 

Source: InfoLink's Global Lithium-lon Battery Supply Chain Database
 

Features of recent overseas expansions 

1. Tier-2 lithium-ion battery manufacturers joined the game. The number of  Chinese Tier-2 lithium-ion battery manufacturers expanding overseas increased from four in 2022 to six in 2023, and the total planned production capacity rose from 156 GWh in 2022 to 178.5 GWh in 2023.

2. Fewer projects specifically for energy-storage lithium-ion batteries. Currently, most overseas expansions serve automotive battery buyers, and less for energy storage. This could be attributed to the the non-China energy storage market that has yet to boom. 

3. Most Chinese lithium battery companies are still caoutious towards setting up factories in the U.S. Only Gotion High-tech and Envision, companies with international backgrounds, ramps up capacity actively in the U.S. CATL looks forward to setting up factories in the U.S. through an asset-light-business model with Ford Motor. EVE Energy explores feasible solutions through low-equity joint ventures. Hithium has yet to reveal its progress on establishing factories in the U.S. but has begun recruiting talent via public channels. Meanwhile, other Tier-2 manufacturers are still in a holding pattern.

In the next three years, Chinese companies will keep focusing on Europe while ramping up expansions in Asia, Africa, and Latin America. Infolink sees a notable increase in their actual amount of capacity in operation. By 2026, over 250 GWh of cell capacity will be operational.
 

Source: InfoLink's Global Lithium-lon Battery Supply Chain Database