Battery Supply Insufficient to Meet Auto Demand [Report]

The dramatic shift toward electric vehicles in coming years will require significantly more battery manufacturing capacity than currently planned, a new report suggests.

The analysis, sponsored by industrial technology giant ABB and authored by London research firm Ultima Media, found that although plans for 80 new “gigafactories” to produce electric vehicle batteries are already in place worldwide, the global battery supply would still be insufficient to meet demand from automakers.

The study highlighted the importance of automation in ensuring a strong enough EV battery supply chain. Implementing battery pack assembly near or within auto plants, analysts said, would increase automakers’ flexibility and sustainability. Improved manufacturing productivity, meanwhile, could also help cut battery costs, which can account for up to one-third of an EV’s overall cost — a potential hurdle to widespread public adoption of electric cars.

“We believe that building a robust battery supply chain will create a distinct competitive advantage for OEMs, setting a trend towards maximum production flexibility, whether battery pack production is insourced or outsourced, to further reduce costs and boost productivity,” Tanja Vainio, the managing director of ABB Robotics Auto Tier 1 Business Line, said in a statement.

The report projects that all-electric passenger vehicles will overtake sales of gasoline-powered cars in 2036.