Electric vehicles

North American battery production got a boost in March

The Biden admin moved to boost mining, and battery makers committed billions to factories.
article cover

Francis Scialabba

· 4 min read

The US trails China and Europe in electrifying its transportation, but as demand for EVs grows, the world’s biggest battery makers are turning their attention to North America.

The US accounted for less than 10% of global cell production capacity in 2020, but momentum around domestic battery making is gathering fast. In the last few weeks, it’s been reported that the three largest battery manufacturers in the world could collectively commit more than $11 billion to building more than 135 gigawatt-hours (GWh) of new battery production capacity in North America.

The flurry of battery news comes after a succession of big announcements in late 2021. In September, Ford and SK Innovation unveiled a historic $11.4 billion plan for US battery production, and just a few months later, Toyota announced plans for a $1.29 billion battery factory in North Carolina.

Those investments are just the start of the scramble to establish a domestic EV-battery supply chain. North American battery-cell production capacity could increase tenfold by the end of the decade, per Wood Mackenzie estimates, with US capacity growing from less than 60GWh to more than 700GWh.

Onto the updates

Contemporary Amperex Technology Co. Ltd. (CATL) is searching for a North American site to build a $5 billion battery plant that will supply customers in the region, including Tesla, Bloomberg reports. The Chinese company is the largest battery maker in the world, accounting for nearly one-third of the market in 2021.

  • The factory could produce as much as 80 GWh of batteries each year.
  • CATL already has 145 GWh of manufacturing capacity, with another 579 GWh set to come online by 2026, according to data compiled by BloombergNEF.

LG Energy Solution (LGES), the second-largest producer of batteries, is entering a joint venture with automaker Stellantis to build a $4.1 billion EV-battery manufacturing plant in Canada, the companies announced on March 23.

  • Located in Windsor, Ontario, this plant is slated to produce more than 45 GWh of batteries annually once it is fully operational. The companies plan to start construction later this year and begin operations in the first quarter of 2024.
  • The plant will be the first large-scale battery facility for Stellantis in North America, and a step toward reaching the carmaker’s goal of selling 50% battery-electric vehicles in the US and Canada by 2030.

On the same day, LGES announced it plans to invest about $1.4 billion to build a battery factory in Arizona to meet demand from other North American customers. The company already supplies batteries to Tesla and Lucid.

  • Construction is scheduled to begin during the second quarter of this year, with 11 GWh of production capacity coming online in 2024.
  • This will be the South Korean company’s first battery factory in the US to produce cylindrical battery cells, which both Tesla and Lucid have used in their EVs.

Panasonic Corp., the third-largest battery manufacturer, is also eyeing a US site for a new multibillion-dollar battery factory, according to reports from Japanese broadcaster NHK and Bloomberg. The plant would provide Tesla, and possibly other EV makers, with next-generation lithium-ion batteries.

  • The Japanese company is considering locations in Oklahoma and Kansas. Operations at the US facility could begin as soon as 2024.
  • The plant will manufacture Tesla’s new 4680 battery, which the automaker is also building at its own gigafactory in California. Panasonic plans to start producing the 4680 at a plant in Japan by March 2024.
Stay up to date on tech

Drones, automation, AI, and more. The technologies that will shape the future of business, all in one newsletter.

Zoom out: On the last day of March, the Biden admin invoked the Defense Production Act to increase mining and refining of critical minerals for batteries, such as cobalt, nickel, lithium, graphite, and manganese. While the move was prompted by high energy prices following Russia’s invasion of Ukraine, clean-energy advocates have long emphasized the importance of securing supply chains for these raw materials essential to batteries and other climate tech.

Stay up to date on tech

Drones, automation, AI, and more. The technologies that will shape the future of business, all in one newsletter.