Investment in batteries: down for the first time since 2020

After four years of continuous growth, worldwide investment in batteries will fall in 2024. Slow investment in China and falling demand for EVs explain this downturn.

Share:

Gain full professional access to energynews.pro from 4.90$/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90$/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 $/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99$/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 $/year from the second year.

Since 2020, global investment in lithium-ion batteries (LIBs) had been growing steadily.
By 2024, this trend will be reversed, with a significant drop in investment.
China, the world leader in LIBs, is at the heart of this slowdown.
After a phase of rapid expansion thanks to strong adoption of electric vehicles (EVs) and large-scale industrial projects, the Chinese economy is facing challenges such as material shortages, rising costs and political changes.
In 2021 and 2022, OWL production in China jumped by over 40%.
However, this pace of growth has slowed, partly due to market maturity and ongoing capacity expansion.
China is now looking to Europe and the USA for new opportunities, although these markets are still in the early stages of development.

Impact in Europe and the United States

In Europe, the dependence of electric vehicles on LIBs is heightening concerns about the decline in investment this year.
Falling demand for EVs threatens infrastructure projects and exposes wider problems in the sector, reflected in the financial reports of original equipment manufacturers (OEMs).
Although subsidies have stimulated industry growth, high energy costs, labor expenses and bureaucratic hurdles are holding back progress. In the United States, demand for lithium has exploded due to concerns about the security of supply chains.
Despite efforts to increase LIB production, industrial infrastructures are still in their infancy.
To reduce their dependence on Chinese supply chains, the United States and Europe are implementing policies to strengthen energy security.
However, China’s dominance in lithium investment and trade seems assured thanks to its privileged access to essential resources.

Challenges and innovations in the battery sector

Consolidation of the LIB industry in China aims to offer high-quality battery products, despite a slowdown in demand.
Recent investments have fuelled a rapid expansion in production capacity, but some players, especially those from non-traditional sectors, are withdrawing from the market due to price competition.
Looking ahead, capacity expansion will not be enough without strong technical support.
The LIB sector is seeing a rise in innovative technologies focused on cost reduction, improved energy density and safety.
Challenges include insufficient high-quality production, but robust companies continue to extend their reach.
Technological innovations are now crucial to the sector’s future development.

Future trends and prospects

Alternative battery technologies, such as lithium iron phosphate (LFP) batteries, are gaining ground.
Tesla is collaborating with CATL to mass-produce LFP batteries, while Ford is exploring similar strategies.
Mercedes and Stellantis have suspended their battery manufacturing projects in Europe to re-evaluate their approach, with a possible move towards more affordable LFP cells.
In addition, three South Korean factories are planning to increase their LFP cell production capacity.
Technological advances include the development of new materials such as composite copper foil, silicon-based anode materials, and high-nickel cathode materials such as lithium manganese iron phosphate (LFMP).
Improvements in battery structural systems, such as the introduction of 4680-size cylindrical batteries and solid-state batteries, could also alter battery capacities and longevity in future markets.
The lithium-ion battery market is undergoing a period of readjustment, with technological innovation becoming the central pivot of future development.
Although investment has slowed, the need to produce more efficient, less expensive and safer batteries remains imperative to meet the growing needs of electric vehicles and industrial applications.

StarCharge has signed a contract to supply 1 GWh of battery energy storage systems to Prozeal Green Energy, strengthening its presence in the Indian market and continuing its international expansion.
Kallista Energy has entrusted ENGIE with the commercial operation of its first BESS site in Saleux, with a capacity of 120 MW, scheduled for commissioning by the end of 2026.
Dutch company PowerField has launched a fully automated frequency reserve service, integrating solar generation, battery storage and trading, with initial operations validated by grid operator TenneT.
Following its acquisition of Northvolt’s assets, US-based Lyten has appointed several former executives of the Swedish battery maker to key roles to restart production in Europe.
US-based contractor TruGrid has completed three battery installations in Texas ahead of schedule and within budget, despite weather disruptions and logistical challenges that typically impact such projects.
GazelEnergie plans to build a data center at its coal-fired plant in Saint-Avold, with commissioning expected in 2028 and a capacity of 300 MW.
Ormat Technologies has begun commercial operation of its new energy storage facility in Texas, alongside a seven-year tolling agreement and a hybrid tax equity deal with Morgan Stanley Renewables.
German grid operators face a surge in battery storage connection requests, driven by a flawed approval process.
TWAICE will equip four energy storage sites in Southern California with its analytics platform, supporting operator Fullmark Energy in CAISO market compliance and performance optimisation.
CATL unveiled in São Paulo its new 9MWh TENER Stack system, designed for the South American market, responding to rising demand for energy storage driven by the growth of renewable energy.
EdgeConneX has acquired a second site in the Osaka region, bringing its total capacity to 350MW to support the growth of the Cloud and AI market in Japan.
Driven by grid flexibility demand and utility investments, the global containerized BESS market will grow at an annual rate of 20.9% through 2030.
The American battery materials manufacturer, Group14, finalizes a $463 million fundraising round and acquires full ownership of its South Korean joint venture from conglomerate SK Inc.
Energy Plug Technologies partnered with GGVentures to deliver three energy storage systems to the U.S. construction sector, marking its first commercial breakthrough in this strategic market.
HD Renewable Energy has completed the connection of its Helios storage system to the Hokkaido grid. The 50 MW project is expected to enter commercial operation by the end of 2025, targeting multiple segments of the Japanese electricity market.
Ingeteam partners with JinkoSolar and ACLE Services to equip seven sites in Australia, representing a total capacity of 35 MW and 70 MWh of energy storage.
Copenhagen Infrastructure Partners has acquired from EDF power solutions North America the Beehive project, a 1 gigawatt-hour battery storage facility located in Arizona.
Developer Acen Australia has submitted a battery storage project to the federal government, targeting 440MW/1,760MWh in a region near solar and mining infrastructure in Queensland.
Google invests in Italy’s Energy Dome to deploy in Oman a long-duration CO₂-based storage solution, in partnership with Takhzeen Oman and the sovereign wealth fund Oman Investment Authority.
Zeo Energy has completed the acquisition of Heliogen, creating a new division dedicated to long-duration energy generation and storage for commercial and industrial markets.

Log in to read this article

You'll also have access to a selection of our best content.