Just saw an article that says a new battery plant will be built in the USA for a cost of 2 billion dollars. The plant will put out enough batteries for 300,000 vehicles a year. A quick search shows around 100 million cars are produced each year.
Just doing a little math says we need about 300 plants like this to keep up with battery demand. At 2 billion a pop, that is a 600 billion dollar investment over the next 8 years to get is fully electric by 2030. This is just a little under 80 billion a year and 40 plants a year.
I recommend we start watching the number of battery plants or GW battery manufacturing numbers coming on line or proposed each year. This is a new and important MACRO indicator.
An unstated key point is the storage and discharge capacity of each battery produced. Vehicles may require 2-3-4 batteries due to the relatively low capacity of each battery. However, as batteries become more energy-dense, fewer batteries are needed per vehicle. Thus, a battery plant may produce the same number of batteries, but each vehicle needs fewer of them due to the higher power in each battery. So the real figure to watch would be GW capacity–which would translate into number of vehicles built using those batteries.
Just six companies—BYD, CATL, LG Energy Solution, Panasonic, Samsung SDI, and SK Innovation—were responsible for supplying 87 percent of batteries and battery metals in passenger EVs in the second half of 2020. Tesla’s deployment of 22.5 gigawatt-hours of batteries in that period was nearly as much as its five closest competitors combined: China’s BYD, Hyundai, Mercedes, Renault, and Volkswagen. What Castilloux calls a “tsunami of demand” has put unprecedented pressure on battery- and motor-material supply chains, sparking a surge in prices for lithium, nickel, cobalt, neodymium, praseodymium, dysprosium, and terbium.
Will the EV battery world be able to meet the EV demand? To have any shot, the United States alone may need 20 to 40 gigafactories over 15 years, with a combined terawatt of new battery capacity, to meet projected demand, says Venkat Srinivasan, director of the Argonne Collaborative Center for Energy Storage Science. “Right now, the United States doesn’t have enough materials to do that, so materials substitution and recycling will be key to get this to go,” Srinivasan says.
I do not know how much it will cost to prepare the infrastructure in the USA for electric.
I will note that the numbers used were for worldwide production of cars. However, I
pulled those numbers quickly and it was not specified what a “car” is. I cannot tell you if it is only a sedan, or includes SUV’s, or maybe light trucks.
So in this case the numbers are not granular. Worse there are offsetting cost that are not calculated. Displacing
internal combustion engines has an impact on a metals consumption, oil consumption as well has some plants will be retired rather than upgraded.
Thus the gross dollars spent on battery plants will not be the net spent. The idea of the post was to point out the levels of investment needed to fully electrify and batteries are the current bottle neck.
Displacing internal combustion engines has an impact on a metals consumption, oil consumption as well has some plants will be retired rather than upgraded.
Lots of new capacity will be needed if EV production is to hit 18MM by 2030. Personally I’ll be surprised to see it hit 9MM, 50% share by 2030.
2030, plus or minus, is the year experts expect EV/ICE sales parity. BTW, the US lags behind China and Europe in EV adoption – American gas is too cheap and American cities have less smog than Chinese cities. GM & Ford should be falling further behind.
BTW2, global auto production has fallen from around 100 million to just 70 million annually. Could be because cars now last longer.
No one I know wants to be first. It will be interesting to see how many of those 3MM get sold in 2024.
I recommend we start watching the number of battery plants or GW battery manufacturing numbers coming on line or proposed each year. This is a new and important MACRO indicator.
Good idea!
Battery Day Revisited, Updated & Explained
It has been sometime since the legendary Battery Day event, where we told how Tesla have found a way to change the EV industry as we know it, with technology that actually made electric vehicles a possible future.
Let’s go through Battery Day, and look at it again with what we have learned since, and what Elon and Tesla have been telling us with a more up to date approach. The timing couldn’t be better, what with the first Battery Day vehicle soon to be for sale.
It was the original September 2020 Tesla Battery Day that convinced me that the EV technology had Crossed the Chasm and that it was time to invest in TSLA.
We are told in China, probably the big cities, the waiting list for ice licenses is long, while ev licenses are easy to get. The US could do likewise if serious about evs and climate change.
As to how many i know, maybe 100. In this area recharging stations are rare. I know no one eager to buy an ev.
” We are told in China, probably the big cities, the waiting list for ice licenses is long, while ev licenses are easy to get. The US could do likewise if serious about evs and climate change.”
In the US, we don’t need a license to buy any sort of vehicle and we certainly don’t want that level of federal control. Actual licensing for driving is a state level process.
In the US, we don’t need a license to buy any sort of vehicle and we certainly don’t want that level of federal control. Actual licensing for driving is a state level process.
True, but if we are serious about climate change there are ways govt can encourage people to drive evs. Economic incentives are usually used but there are other ways.
In parts of China, ice licenses are limited in number and hard to get. Imagine their value if those with a license could resell it. Those with the greatest need and resources would get the licenses. Most regular citizens would be forced to drive evs.
Similarly Mexico City had a rule that you could only drive on alternate days (odd or even license number). Either you must own two cars or you must share a ride or take public transportation.
People can be creative about achieving environmental goals if they decide to.
Shouldn’t we be talking in terms of how many new batteries are demanded each year rather than the number of battery-powered cars there are? We and two neighbors have owned a Prius for over ten years and none of us has had to buy a battery – and that’s with regular use as commuter cars in the hot Texas environment.
I was thinking of easy to track. The number if cars built per year is a fairly common data point. To get to all electric manufacturing, we will need enough battery manufacturing capacity to build batteries for all the cars built each yesr.
This is slippery metric. I assumed, this is guaranteed to be false, that it would continue to cost the same amount to build the plants the build the batteries, and I assumed that the kilowatt hours needed per car would remain static also. The chances of anything remaining static is approaching zero.
I do not know which way the kilowatt hours per vehicle will go, but “up” is a reasonable assumption as economic laws generally see rises in consumption as cost (not necessarily prices) come down.
Also as more plants get built, and manufacturing experience yields efficiencies, we can expect the cost to build the plants to come down. This may or may not be true as new battery technology is coming online quickly and that technology may or may not be more difficult to manufacture manufacturing plants for.
Of course the best metric would be the number of gigawatt hours manufacturing capacity built, in production and planned divided by the current average kilowatt hours being installed in each car. But at this point any handy data stream would be better than what we have which is none.
