Forecasting Battery Cell Production in Europe: A Risk Assessment Model

The increase in battery demand, particularly from the mobility sector, has resulted in a significant increase in the required production capacities. Europe is facing a large-scale expansion of production capacities. Currently, the battery cell demand in the region accounts for approximately 25% of global demand, while only 10% of global production capacities are located there. This has motivated the announcement of a large number of production projects of over 2 TWh by 2030, which would mean overcapacity compared to projected European cell demand. In recent years, however, many of the announced Gigafactories have been delayed or cancelled. This paper aims to develop a risk assessment model for forecasting realistic future capacities for battery cell production in Europe. The proposed model combines an evaluation of industry announcements at the project level with a Monte Carlo simulation to translate the announced production projects into a European production capacity forecast. Therefore, the likelihood of implementation for individual projects is analysed within 11 topics (company, country and maturity related) and scenarios for future European production capacities are elaborated. Model validation indicates that from 54% to 75% of the announced capacities in Europe are likely to be realised (approx. 1.2 GWh-1.7 GWh by 2030). The majority of battery production projects announced in Europe are still in the planning phase (66%) with Germany, France, Scandinavia and Eastern Europe emerging as key regions. The modelling of production capacities predicts that dependency on cell imports to Europe will be reduced compared to today.