China to build many gigafactories' worth of electric-car battery plants


Tesla Gigafactory battery plant in Nevada

Tesla Gigafactory battery plant in Nevada

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While the United States federal government threatens to backslide on renewable energy, California and China continue to move at an aggressive pace to lead the world in zero-emission vehicles.

However, there's another piece to the electric-car puzzle that China seems poised to lead as well: battery production.

As the global market for electric and plug-in car grows, battery production will need to increase dramatically to match demand.

DON'T MISS: Chinese maker BYD plans U.S. expansion into other electric industrial vehicles

It's expected that electric-vehicle batteries will become a $240 billion industry, and China has already begun to cement itself as a leader in battery production.

In China alone, there are 140 electric-vehicle battery makers, and in the next 20 years, they'll likely reap the rewards of early adoption, according to a Forbes report.

Combined, they have already led global battery cell manufacturing production to produce 125 Gigawatt-hours (1 GWh is equal to 1 million kilowatt-hours) worth of cells last year alone.

Tesla gigafactory as photographed by drone, May 17, 2015 [screen capture from YouTube video]

Tesla gigafactory as photographed by drone, May 17, 2015 [screen capture from YouTube video]

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Back in 2014, Tesla announced that it would collaborate with Panasonic to build its (first) Gigafactory, which would produce 35-GWh worth of cells every year once it hit full capacity, as noted by Tesla in a 2014 presentation.

China's rapid production underscores Tesla CEO Elon Musk's later suggestion that it would need multiple gigafactories across the globe to achieve its production goals.

Cell production globally is expected to double from 125 GWh to 250 GWh by 2020, also led by Chinese battery production.

Tesla gigafactory: Planned 2020 production of lithium-ion cells [slide: Tesla Motors, Feb 2014]

Tesla gigafactory: Planned 2020 production of lithium-ion cells [slide: Tesla Motors, Feb 2014]

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Even with the rapid increase of production, analysts suggest that 250 GWh will not be enough for the automotive industry to turn away from fossil fuels to electrified cars in the volumes expected.

The report states total cell production will need to increase tenfold between 2020 and 2037 to match demand.

That's the equivalent of adding 60 new gigafactories.

READ THIS: VW says it needs '40 gigafactories' for electric-car batteries by 2025

German automakers have lately begun to toughen up on the reality of battery production.

Volkswagen Group specifically said it believes it alone will need the equivalent of 40 new gigafactories to meet the its own demand for batteries as it adds electric or electrified versions of all 300 cars it makes by 2030.

In total, VW predicts a total of 1.5 terawatt-hours per year will be required within the global automotive industry.

Tesla battery gigafactory site, Reno, Nevada, Feb 25, 2015 [photo: CC BY-NC-SA 4.0 Bob Tregilus]

Tesla battery gigafactory site, Reno, Nevada, Feb 25, 2015 [photo: CC BY-NC-SA 4.0 Bob Tregilus]

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Much of Germany's battery production is nestled in what has been referred to as the Silicon Saxony region.

There, BMW, Daimler, and VW have all planted roots and produce batteries.

Of the three German giants, Daimler has invested the most; the automaker announced a new 20-hectare (50-acre) battery plant to support the slew of electric vehicles it plans to bring to market over the next nine years.

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