October 2021
While China is currently winning the race to manufacture lithium-ion batteries with 93 gigafactories, the US is racing to build up and expand capacity to grab market share as the EV sector is set for rapid growth. AME expects annual production of EVs will grow from 3m in 2020 to more than 11m by 2025.

The US currently has five operational battery plants, with Tesla controlling most production. AME estimates that the US had an annual installed li-ion battery production capacity of 54GWh in 2020, more than Europe's 18GWh but much less than China's 332GWh.

The US has another eight li-ion battery plants in our 'probable' category (under construction or late-stage development) and another five in our 'possible category' (announcement stage). In our base case (existing expansions and 'probable' sites), we expect US battery production capacity to grow to 235GWh by 2025, more than tripling compared to 2020. In our ambitious case (including 'possible' sites) we expect capacity would grow by to at least 310GWh by mid-century.

By 2025, global installed capacity is forecast to rise 300% to ~1,700GWh. China will continue to be the biggest player, with CATL aiming to raise capacity to an incredible 600GWh by mid-decade, but the US, together with Europe, are hot on its heels to shore up future economic competitiveness, lower emissions, create jobs and safeguard national security.

Carmakers and battery producers are increasing their investments in the component that accounts for around 30% of an EV’s total cost. While BYD, Tesla and Great Wall are still the only automakers to be fully integrated in battery production, their car making rivals are rushing to get into batteries. Automakers are also seeking to integrate and localise battery production to lower costs, avoid tariffs and shore up supply chains. The majority of US battery facilities under development are partnerships with South Korean battery makers looking to gain ground in one of the world's largest markets.

A "gigafactory" is, by all means, a factory of epic size. It builds commercially usable energy cells and batteries from start to finish—basically, raw materials come in one end, and finished products come out the other. According to Tesla CEO Elon Musk, it is "the machine that builds the machine."  The “giga” comes from gigawatt-hour (GWh), which is enough energy to power one million homes for an hour.

EV batteries today are typically between 40 to 100 kilowatt-hours (kWh) capacity. That means a 39GWh a year plant can make 39,000,000 kilowatt-hours of batteries, or enough to power roughly 390k-975k EVs.

Battery costs are falling, and the lower they go, the closer EVs get to reaching parity with internal combustion engine cars. The industry is aiming for US$100/kWh, which would mean an 85kWh battery pack would cost US$8,500.

 

 

 

Tesla Gigafactory 1 (Nevada) Production

Tesla’s US$5bn gigafactory in Sparks, Nevada, which is part of a partnership with Panasonic, has a 35GWh capacity. Panasonic produces 2170 battery cells, and Tesla produces battery packs for Model 3, Model Y, Powerwall, Powerpacks, Megapacks, and drivetrains for its EV lineup. The plant produced its 1 millionth battery pack in September since operations began in 2017.

Panasonic said in December last year that it would add a 14th production line for US$100m, increasing capacity by 10% to 39GWh and would lift each battery's storage capacity by 5%. Tesla said last year that it had plans to produce its own larger tabless battery cell, known as 4680, which were touted as having five times the energy density and six times the power of its Panasonic-built 2170 cells. But existing supplies may well deliver it before Tesla. Panasonic's new chief executive confirmed the company will make a large investment to build 4680 cells if they prove viable.

 

 

Tesla Pilot Plant (California) Production

Tesla's mothership plant in Fremont, just outside San Francisco, comprises 5.3 million sq. ft. and has an estimated li-ion battery capacity of 10GWh. The plant, which employs 10k, builds the Model S, Model X, Model 3, and Model Y, along with a majority of each EV’s components. CEO Elon Musk said this month that the company plans to increase Fremont's output by 50% in the next couple of years and that it would produce 4680 batteries. Tesla purchased the former General Motors facility in 2010 and extensively remodelled it before the first Model S rolled off the line in 2012.

Meanwhile, Tesla announced in September that it has broken ground on a new California-based facility called ‘Megafactory’ in Lathrop. Tesla said that its Megapacks were sold out “through the end of next year,” as the energy storage product continues to experience high demand as sustainable energy projects grow. They cost US$1m each.

 

Envision AESC (Tennessee) Production

Envision has a 3GWh-capacity plant in Tennessee, which has been in operation since 2012. The company's annual production capacity totals 7.5GWh—3GWh in Tennessee, 2.6GWh in Kanagawa, Japan, and 1.9GWh in Sunderland, UK. Envision is aiming to boost capacity at Sunderland to 9GWh, build another 9GWh plant in France and construct a 20GWh plant in Wuxi, China—which would raise capacity to 43.6GWh.

 

 

LG Energy Solution (Michigan) Production

LG Energy Solution, the US unit of LG Chem, will expand capacity at its existing 5GWh li-ion battery plant in Holland, Michigan. The company will add new facilities on the same site, which began commercial operations in 2013.

LG said it plans to invest more than US4.5bn to expand its battery production capacity in the US by 2025, resulting in an additional 70GWh of battery production capacity. This comes on top of the two joint-venture plants it will operate with General Motors that are part of Ultium Cells LLC. LG has said that none of the materials for its US market cells are currently sourced from China and it had no plans to do so in the future. 

 

Clarios Power Solutions (Michigan) Production

Clarios Power Solutions operates the Meadowbrook lithium-ion battery manufacturing plant in Holland, Michigan. It specializes in manufacturing prismatic lithium-ion battery cells primarily used in the automobile and electronics industries. The 41,000-square-foot Holland plant has supplied batteries to Mercedes Benz, General Motors and Jaguar Land Rover.

The company was known as Johnson Controls until May 2019, when it was acquired by Canadian investment firm Brookfield Business Partners in a US$13bn deal. Clarios accounts for over one-third of the automotive industry's total annual output of lead acid batteries.

 

SK Innovation (Georgia) Probable

SK Innovation is constructing two battery plants worth US$2.6bn in Georgia, which will supply EV batteries to Ford and Volkswagen. The first 9.8GWh plant is set to begin operations in the March quarter of next year, with the second 11.7GWh plant scheduled for mass production in 2023. The second plant is dedicated to batteries to be used in Ford’s F-150 pickup.

The world's sixth largest battery cell manufacturer will spend KRW30tn (US$26.5bn) to ramp up global battery production capacity from the current 40GWh to 200GWh in 2025, in the hopes of generating KRW2.5tn (US$2.2bn) in earnings. SK currently has battery production sites in South Korea (34.5GWh), China (27GWh) and Hungary (7.5GWh). Going forward, SK's two Georgia plants, coupled with its BlueOvalSK plants, means it will have a 150GWh capacity in the US alone.

 

Tesla (Texas) Probable

Tesla is aiming to start production at Gigafactory Texas by the end of the year and reach volume production by the end of 2022. The goal of Gigafactory 5 is to produce both the Model 3 and Model Y for easier distribution to the Eastern US. It is planned to be the main factory for both the highly anticipated Cybertruck and Semi. The US$1.1bn plant is expected to employ 10k. Tesla has not disclosed the production capacity.

 

GM, LG Chem (Ohio) (Tennessee) Probable

General Motors, with joint-venture partner LG Chem, is currently building a 35GWh-capacity battery plant in Lordstown, Ohio, set to be complete in 2022. The US$2.3bn, 2.8-million-square-foot plant is expected to create 1,100 jobs. The plant will produce GM's new nickel-intensive Ultium cells.

 

 

The cells, developed with LG Chem, use an NMCA chemistry—nickel, manganese, cobalt, and aluminium— for the cathode. GM says it has reduced the use of cobalt by 70% and lowered the amount of wiring by 80% compared to the cells in a Chevrolet Bolt EV and plans to source as many materials from North America as possible. Because of these cost reductions, GM Chairman and CEO Mary Barra said Ultium batteries will be able to breach the holy grail $100/kWh barrier "early in the platform's life".

The companies will also build a second 35GWh-capacity Ultium cells plant near GM's assembly plant in Spring Hill, Tennessee. It is expected to come online in late 2023. GM said in October it would invest US$2bn in the Spring Hill assembly plant to build EVs, including the Cadillac Lyriq. In January, the automaker said it would spend US$2.2 billion to retrofit its Detroit-Hamtramck plant to produce EVs.

The plants will help GM reach its goal to introduce 30 new EVs globally and exceed 1m of annual EV sales in the US and China by 2025.

 

Ford, SK Innovation (Tennessee) (Kentucky x 2) Probable

Ford is teaming up with South Korea’s SK Innovation to manufacture battery cells at three US plants to accelerate its EV rollout. The joint venture, called BlueOvalSK, will invest US$11.4bn to build an assembly and battery plant in Tennessee, and two other battery factories in Kentucky. The investment is Ford's largest in its 118-year history. The BlueOvalSK battery plants will be the largest ever in the US with an annual production capacity of 129GWh (43GWh at each plant)—enough to supply 2.15m EVs a year. The Tennessee plant and one of the Kentucky plants are planned to begin production in 2025 with the second Kentucky plant coming on line in 2026.

Ford in May raised its investments in EVs to US$30bn through 2025. The automaker expects electric cars to make up 40% of its production by 2030. Ford has gone from being a relative latecomer to EVs to making them a central focus.

 

Microvast (Tennessee) Probable

Li-ion vertically integrated battery maker Microvast is constructing a new US$220m battery manufacturing facility in Clarksville, Tennessee. The Houston-based company currently operates plants in Huzhou, China and Ludwigsfelde, Germany. In July, the company went public through a merger with a SPAC. Microvast said the project "started in 2019 at the request of the US Department of Energy (DOE)".

Its third generation, "HnCO" (NCM) battery reached an energy density of 265Wh/kg in February 2021. The company also produces LFP and LTO cells. It is currently working to produce a high energy density, cobalt free, fireproof, extreme fast charging (XFC) battery, which is expected to cost less than US$100/kWh. Microvast, which has signed contracts at a total value of over US$1.5bn, plans to increase production capacity to 11GWh in 2025, from 3GWh in 2020.

 

QuantumScape (Unknown) Possible

QuantumScape, a Silicon Valley start-up backed by Volkswagen and Bill Gates, is aiming to make solid-state lithium metal batteries for EVs. It announced earlier this year that it would build a pre-pilot line facility in San Jose, known as QS-0, to deliver 100k cell samples by 2023. Meanwhile, its other pilot plant, a JV with VW, known as QS-1, will start production at a 1GWh scale in 2024-25 before expanding to 20GWh.

The company is targeting an energy density of close to 400Wh/kg, from roughly 260Wh/kg in today’s EVs. It claims its technology could reduce charging times to under 15 minutes, while also making EVs safer by avoiding the use of flammable liquids.

VW, which has invested US$300m in QuantumScape and holds a 20% stake, hopes to deploy its cells in 2025. It has also committed an undisclosed sum to help it build a pilot factory. The company said in September that it had signed an agreement to supply another top global automaker to provide 10MWh of batteries from QS-0.

 

LG, Stellantis (Unknown) Possible

LG Energy Solution and automaker Stellantis are launching a US$3.4bn joint venture to build a 40GWh battery manufacturing facility in the US. The JV, announced on Oct. 18, plans to break ground on the new plant in the June quarter of 2022 with an aim to start production by the March quarter of 2024. The location was not disclosed.

Once completed, the facility will raise LG’s total capacity in North America to 150GWh. The batteries produced at the new gigafactory will be supplied to Stellantis assembly plants throughout the US, Canada, and Mexico. Stellantis is aiming to have EVs comprise more than 40% of its sales in the US by 2030. The world's fourth largest automaker is investing more than EUR30bn in EVs and software through 2025.

 

Samsung SDI, Stellantis (Unknown) Possible

Samsung SDI has partnered with automaker Stellantis to build a multi-billion-dollar battery facility in the US. The companies will begin producing cells and packs in 2025, starting with a production capacity of 23GWh, before expanding to 40GWh. The location of the plant and the construction schedule was not disclosed. The Oct. 19 announcement came a day after LG announced its battery JV with Stellantis.  

 

 

Samsung SDI has been the only major Korean battery maker without a production facility under development in the US. Currently, the company operates battery manufacturing plants in Korea, Hungary and China, supplying batteries to customers such as BMW and Ford Motor. In the US, it runs a battery pack assembly line in Michigan.

Stellantis is diversifying its battery procurement sources by forging partnerships with both LG Energy and Samsung SDI to secure various types of batteries for the swath of brands under its umbrella. It will likely receive prismatic and cylindrical types of batteries from LG Energy and pouch and cylindrical types from Samsung SDI. Stellantis, through its joint ventures, aims to have an annual battery production capacity of 50GWh in North America by 2025, and further raise it to 90GWh by 2030.

 

Toyota (Unknown) Possible

Toyota plans to build a new US$1.29bn factory in the US to manufacture batteries for gas-electric hybrid and EVs. The plant location was not announced, but the company said it will start making batteries in 2025, gradually expanding through 2031. The plant is part of US$3.4bn that Toyota plans to spend in the US on automotive batteries during the next decade.

The new plant would likely be near one of the company’s US assembly plants in Missouri, Kentucky, Indiana, Alabama, or Texas. Toyota plans to sell 2m hydrogen and battery EVs worldwide a year by 2030. In the US, it plans to sell 1.4-1.8m vehicles by 2030 that are at least partially electrified.

 

Freyr, Koch Strategic Platforms (Unknown) Possible

Norwegian battery cells developer Freyr Battery and Koch Strategic Platforms have formed a joint venture to build a 50GWh gigafactory in the US. The parties will aim to reach a final investment decision in 2022 and commence operations in 2030 on the project which would use 24M Technologies' semi-solid technology. The two firms have made a joint US$70m investment in the battery technology developer.