Caixin
Aug 29, 2022 08:03 PM
TECH

U.S., Europe Expected to Take Bigger Bite of Global Power Battery Production by 2026

What’s new: A lot more of the world’s growing supply of electric-vehicle (EV) batteries will be produced by U.S. and European companies by 2026, while a lot less will be made by Japanese and South Korean companies, a new report predicts.

Meanwhile, Chinese companies are expected have about the same share of global power battery production capacity as they have now, according to a new report by management consulting firm Kearney Inc. Power batteries are a category of cells used in things like EVs and electric bikes, as opposed to electronics.

The consultancy predicted that the U.S. and European share will jump to 18% from just 2% in 2021, while Japan and Korea’s combined share will fall to 24% from 44%. According to the report, China’s share will tick up to 58% from 55% over the same period.

Overall, the global production capacity of power batteries will reach 1,951 gigawatt-hours by 2026, 5.7 times higher than in 2021, according to the report.

What’s the background: Europe and the U.S. are building up their own EV industry chains as demand for EVs grows.

In an effort to curtail their reliance on imports, several European governments are considering levying a 10% tax on manufacturers that don’t use at least 65% locally produced components in their power batteries after 2027.

On Aug. 16, U.S. President Joe Biden signed the Inflation Reduction Act into law, extending a tax credit for buyers of new all-electric and plug-in hybrid vehicles through 2032.

Contact reporter Ding Yi (yiding@caixin.com) and editor Michael Bellart (michaelbellart)

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