Lithium-ion Gigafactory Market

Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2025)


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Rapid Uptake of Electric Mobility to Give Momentum to Lithium-ion Gigafactory Market

Electric mobility is emerging at a rapid pace, propelling the demand for lithium-ion battery. Fairfield Market Research anticipates that the steady investment in electric vehicles along with other lithium-ion battery usage in commercial and industrial needs is expected to further boost the global market. High demand for lithium-ion battery cannot be met with traditional battery production facilities. Thus, development of mass lithium-ion battery production facilities in line with in-house development for battery packs and assembly of EVs has paved ways for Gigafactory.

Lithium-ion Gigafactory or mega factory refers to infrastructure, which deals with production of lithium-ion battery and sub-assembly of EVs. Typically, a Gigafactory has battery cell production capacity of more than 1 GWh. For instance, Tesla Inc. has been developing such facilities that are entirely powered by renewable energy sources for its in-house operations.

Cost Saving with In-house Development and Assembly to be an Added Advantage

Widespread adoption of electric vehicles, growing lithium ion battery R&D activities, formation of strategic contracts with automakers, utilization of renewables for in-house power are some of the key drivers for the global lithium-ion Gigafactory market.

The main advantage of lithium-ion Gigafactory is the in-house assembly of EVs and development of lithium ion battery packs under one roof.  This minimizes the overall cost of manufacturing of an EV, which can be sold at an affordable price in the global market. Tesla has been developing such facilities, which will be entirely powered by renewable energy sources for its in-house operations. Majority of lithium battery manufacturers are investing on Tesla’s Gigafactory in order to grab additional market share soon. Analysts predict that Gigafactory can obtain cost optimization for the EV industry.

Supply chain bottleneck due to COVID-19, high CAPEX and OPEX, followed by depletion and rising prices of raw material such as lithium and cobalt have been some of the recent restraining factors for the deployment of lithium-ion Gigafactory services. Lithium, the lightest and key element of all lithium-ion batteries, is sourced from just a few countries. More than 90% of all lithium comes from Australia (44%), Chile (34%), and Argentina (13%), which makes the business highly dependent on these nations.

The COVID-19 pandemic has impacted not just the electric vehicle production but the Gigafactory operations too. Most of the production facilities remain closed or are not able to attain full production capacity due to shortage of staff and raw materials. On April 2020, Tesla reduced staff at Nevada, U.S. Gigafactory by 75% amidst COVID-19 pandemic.

China to Lead the Asia Pacific Lithium-ion Gigafactory Market in Terms of Capacity

In terms of region, Asia Pacific dominated the market owing to deployment of high capacity based Gigafactory in China. More planned projects in India and other countries in Asia Pacific are expected to drive the demand for Gigafactory by 2030.

Currently, there are more than five operational lithium-ion Gigafactories. Globally, out of the 70 announced Gigafactories in 2020, more than 40 are based in China. Unlike China, Europe does not have a coherent industrial strategy to attract large-scale battery manufacturing, which is impeding the regional market’s growth.

Lithium ion battery demand is set to surge about tenfold between 2018 and 2030.
Europe is expected to be the new value pocket for key players involved in Gigafactory market. The region has large number of planned projects under pipeline and is expected to come into operations by 2030. Tesla is planning for new Gigafactory in Berlin. Sweden is the key market in the Europe region. This is definitely expected to put Europe in a competing position against Asia Pacific throughout the forecast period.

Global Lithium-ion Gigafactory Market: Competitive Landscape 

Top three players in global lithium ion Gigafactory are Tesla, LG Chem, and Contemporary Amperex Technology Co. (CATL). As of 2019, Tesla led the market. Tesla’s market share is expected grow past 35% by 2030 owing to establishment of new Gigafactory in the near future. Other key players involved in Lithium-ion Gigafactory market includes: BYD Co. Ltd., Panasonic Corporation, SAMSUNG SDI CO, LTD., BAK Power Battery, Saft, and Toshiba International Corporation.

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