Demand for automotive batteries is increasing in-line with vehicle electrification. By 2030, more than 30 Gigafactories will be competing for share and battery cell competence – and that is only in Europe.
With continued growth of the European battery market, we expect that economies of scale will lead to a consolidation of battery companies from 2025 onwards. New as well as long established players need to transform into reliable suppliers of the automotive value-chain by building-up scalable organisations and ultimately run best practice operations. Today’s established battery players with their strong technology expertise from consumer goods industries need to adapt to automotive standards and methodologies to fulfil OEM expectations and governmental regulations.
In addition, continuously tightening CO2 regulations, shortage of raw materials and sustainability will tremendously impact future value-chains of automotive batteries. Therefore, a strategical approach towards a circular economy and emission neutral battery production must be developed.
This paper discusses the challenges of the European battery industry and offers practical solutions. Main findings include:
- what types of battery companies are competing for market share
- how to survive the market consolidation ahead
- best practice battery operations to survive the consolidation
In past years, battery manufacturers have successfully improved the capacity and performance of battery cells. We have calculated that by 2030, at the current OEE level and the current rate of efficiency improvement, approx. 13 billion euros CAPEX will be overinvested until end of the decade. To survive until 2030, the focus needs to be directed towards improving operational performance and reliability.
To master the upcoming consolidation in the battery environment, it will be necessary to focus on more than just the product or the technology. Only those companies who combine cutting-edge technology, operational efficiency and a scalable organisation into a holistic operating system will prevail as a long-term partner of the OEMs.