The International Energy Agency (IEA) projects that to reach net zero by 2050, all cars sold from 2035 must be electric vehicles (EVs). That equates to upwards of 70 million batteries a year being required, just for consumer EVs. When you factor in the wider use cases for batteries (including those required to compliment new renewable energy sources), demand for batteries will grow exponentially in the coming years.
Meeting this demand will require more gigafactories to be built at scale and speed, and from 2025 we need to be producing 3,000 gigawatt hours per year of new battery capacity. This leap in manufacturing capacity can hardly be understated; current annual global manufacturing capacity is approximately 500 gigawatt hours.
Given the scale of demand, there is ever-growing interest from governments, corporates, original equipment manufacturers (OEMs), car manufacturers and investors, all of whom see opportunity. However, there is an emerging realization that the development and optimization of these facilities is not straightforward.
In this article, we consider some of the commercial, political and legal issues that need to be navigated in order to successfully develop and finance these highly bespoke manufacturing facilities.
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