The ever-growing demand for electric vehicles (EVs)—which is expected to reach 40 million units by 2030, a date that coincides with the ban on internal combustion engine (ICE) vehicles in the UK—has prompted mass investment into gigafactories to accelerate EV and lithium battery production.
First coined in 2013 by Tesla Chief Executive Elon Musk as a way of describing a facility that he was building in Nevada, the term ‘gigafactory’ refers to a manufacturing plant that constructs EV batteries, with some also assembling full EVs. Asia dominates when it comes to these facilities and is expected to outperform other regions such as Europe and North America between 2022 and 2030. This is according to Fitch Solutions, which pegs Asia’s current capacity in 2022 at 1,240GWh. By comparison, Europe has 285GWh of capacity while North America has 208GWh.
“This means that Asia currently has 71.6% of the total global capacity," says Phoebe O’Hara, Country Risk and Industry Research Associate Analyst at Fitch Solutions.
Asia’s dominance is down to the early establishment of several battery makers in the region, many of which have been in operation since the early 2000s and have been operating at scale for years. “The EV transition has been massively pushed in the region over a much longer time period,” added O’Hara. “The governments have been quick to provide EV incentives and subsidies, and that has driven R&D investment in the segment.”
