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World demand for EV batteries will require at least 10 new 'gigafactories' by 2025

31/05/2018
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That electric vehicles are going to dominate personal transport seems to be inevitable now that policy makers, governments and the automotive industry have thrown their support behind them. But widespread adoption of these vehicles could be facing a major obstacle in the form of a wholesale lack of batteries- at least if a new report from the International Energy Agency (IEA) is to be believed.

According to the new report, the global fleet of electrified vehicles will grow from just over three million vehicles today to as many as 220 million by 2030. However, to meet this surge in demand the automotive industry will need to construct “at least” 10 more battery gigafactories by 2025.
Tesla Gigafactory
(A visualisation of Tesla’s first gigafactory. Image via Tesla).

The first of these battery gigafactories, Tesla’s monumental facility in Nevada, US, is nearly complete and will be capable of producing 35 gigawatt-hours of batteries per year (which is around half of the current global demand). Should the IEA’s predictions come true however, such facilities will need to become far more widespread in order to meet demand.

Sources of demand

The report provides a useful insight into the geographical sources of demand.

Through 2017 China remained the largest electric car market in the world, accounting for a staggering half of all EVs sold. Nearly 580,000 electric cars were sold in China in 2017, a 72% increase from the previous year. The United States had the second-highest, with about 280,000 cars sold in 2017, up from 160,000 in 2016. Nordic countries meanwhile remain the leaders in terms of market share. Electric cars accounted for 39% of new car sales in Norway, making it the world leader in electric vehicle market share. In Iceland, new EV sales were 12% of the total while the share reached 6% in Sweden. Germany and Japan also saw strong growth, with sales more than doubling in both countries from their 2016 levels.

Driving the energy transition

A key element within the report, that will no doubt be keenly noted by EngineeringPro readers, is the significant impact EVs will have upon the global oil and gas industry. Already, major oil and gas companies (mostly recent high-profile example being Statoil/Equinor) are re-branding and re-positioning themselves as broader energy companies- perhaps looking to a post-oil future. 

According to the report, the IEA predicts that by 2030, the growing popularity of electrified vehicles will reduce demand for oil by around 2.57 million barrels per day- a not insignificant amount- and a trend which would it would be safe to predict would continue. 
If battery supply can meet demand- and a multiplicity of new gigafactories begin to spring up across the globe- the automotive and energy industries are going to look very different, very soon…

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World demand for EV batteries will require at least 10 new 'gigafactories' by 2025 - Time to read 3 min
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