Battery Monitor 2024/2025: Global Battery Demand to Triple by 2030 as Europe Faces Price Wars and Overcapacity

Battery Monitor 2024/2025: Global Battery Demand to Triple by 2030 as Europe Faces Price Wars and Overcapacity

(IN BRIEF) The “Battery Monitor 2024/2025” report predicts a tripling of global battery demand by 2030, reaching between 4.0 and 4.6 terawatt hours (TWh), with further growth to 8.8 TWh by 2040. The battery market is facing challenges due to oversupply from Asian manufacturers, particularly China, driving prices down and adding pressure on European producers who struggle with higher costs and uncertainties in electric vehicle adoption. However, Europe has the potential to become a competitive player in the market, thanks to innovations in production technologies and a focus on reducing the carbon footprint of batteries. To remain competitive, European manufacturers must prioritize cost-effective mass production and consider partnerships with leading Asian manufacturers.

(PRESS RELEASE) MUNICH/AACHEN, 8-Feb-2025 — /EuropaWire/ — Global battery demand is expected to see a threefold increase by 2030, reaching between 4.0 and 4.6 terawatt hours (TWh), according to the “Battery Monitor 2024/2025,” a comprehensive report by Roland Berger and RWTH Aachen University’s Chair of Production Engineering of E-Mobility Components (PEM). The market, dominated by Asian manufacturers, particularly from China, faces significant challenges including a price war due to overproduction. These factors are adding pressure on European battery producers, who already contend with higher production costs and uncertainties regarding the future of electric mobility. Despite these challenges, Europe has the potential to become a key player in the global battery market, leveraging advantages in innovation, high-quality production technologies, and a lower carbon footprint.

The report forecasts that battery demand could reach 4.6 TWh by 2030 and rise further to 8.8 TWh by 2040 in an optimistic market scenario. In a base case, which factors in a slowdown in electric vehicle sales, demand would still reach 4.3 TWh by 2030. However, if regulatory delays occur, such as setbacks to the EU’s internal combustion engine production ban, demand could dip to 4.0 TWh in 2030. These projections highlight the challenges manufacturers face due to fluctuating demand and unpredictable regulatory landscapes in both the EU and the US.

According to Wolfgang Bernhart, Partner at Roland Berger, “The volatility in the battery cell market has increased significantly, driven by uncertainties around electric vehicle sales and regulatory changes. These factors complicate production planning and make future projections difficult.”

China’s overcapacity in battery production has resulted in a sharp decline in prices globally. While this has benefited consumers, it is putting immense pressure on European manufacturers, who are struggling to match the cost-efficiency of their Asian counterparts. Bernhart predicts that many of the announced battery production projects in the EU and the US may not materialize, resulting in underutilization and overcapacity.

One of the key strategies for European manufacturers to gain a competitive edge is sustainability. European companies are focusing on reducing the carbon footprint of battery production, aiming for a reduction of 30-40 kilograms of CO2 per kilowatt-hour, about a third to a half of the current footprint. Innovations like dry coating and laser drying could significantly reduce energy usage during production. “Although cost reduction is currently the priority, Europe’s manufacturers may gain a competitive advantage by producing batteries with a smaller carbon footprint,” said Professor Achim Kampker, Head of PEM RWTH Aachen University.

The report highlights several opportunities for European manufacturers to improve their competitive standing, particularly through advances in cell chemistry and production technologies. Professor Heiner Heimes of PEM emphasized the importance of preparing for innovations early, especially in the production of cost-effective battery types for smaller and mid-range electric vehicles. Collaborating with Asian leaders in research, development, and industrialization could also provide a strategic advantage.

“The European industry needs to form strong collaborations within and outside of Europe,” Bernhart added. “Working with leading Asian manufacturers, who are far ahead in industrialization, could be an essential part of closing the gap in battery production technology.”

About Roland Berger
Roland Berger is one of the world’s leading strategy consultancies with a wide-ranging service portfolio for all relevant industries and business functions. Founded in 1967, Roland Berger is headquartered in Munich. Renowned for its expertise in transformation, innovation across all industries and performance improvement, the consultancy has set itself the goal of embedding sustainability in all its projects. Roland Berger revenues stood at more than 1 billion euros in 2023.

About the Chair of Production Engineering of E-Mobility Components (PEM) of RWTH Aachen
The Chair of Production Engineering of E-Mobility Components (PEM) of RWTH Aachen was founded in 2014 by StreetScooter co-inventor, Professor Achim Kampker. Working in numerous research groups, the PEM team is dedicated to all aspects of the development, production and recycling of battery systems, electric motors, hydrogen technologies and their respective components as well as their integration, especially in heavy-duty commercial vehicles. A total of 76 academics, 31 non-academics and around 120 student assistants work across three sites. The PEM team is active in teaching as well as in nationally and internationally funded research projects and in cooperation with renowned industry partners. Their focus lies on sustainability and cost reduction at all times – with the aim of creating an unbroken innovation chain from basic research through to mass production. In this context, the chair is a breeding ground for company spin-offs and mobility products, which are sometimes connected.

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SOURCE: Roland Berger GmbH