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Maya Xiao Author
Senior Research Analyst – China
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Maya has an interdisciplinary technical background in vehicle electrification, system automation and robotics. She is now the lead analyst for Interact Analysis’ Li-ion battery and forklift research, also covering markets for industrial and collaborative robots. 

In late 2019, our team at Interact Analysis produced a comprehensive report on the Lithium-ion battery market. One key focus of this report was the Li-ion battery manufacturing equipment sector. Lithium-ion battery manufacturing is in a state of rapid development as demand for electric vehicles and other Li-ion battery applications expands. Companies which manufacture the machines to make these batteries must keep pace with developments as new battery technologies come on-line and battery manufacturers revise their expectations of what equipment manufacturers can provide. The industry reports which Interact Analysis produces are based on our Manufacturing Industry Output (MIO) tracker, which uses historical data to identify trends and make future forecasts. We constantly update our MIO, to take into account new market trends, new technologies, and unforeseen shocks such as the Covid-19 pandemic. This insight gives a snapshot of our updated, post-Covid-19 forecasts for the Li-ion battery manufacturing sector.

Key Points
  • COVID-19 has temporarily postponed the demand for battery production equipment, but the sector will recover relatively quickly
  • Newly added production capacity, i.e. investment in new equipment, will continue to occupy a larger market share than upgrading/renovating existing capacity
  • As battery technology advances, equipment manufacturers are gradually shifting from single-machine sales to subsection integration, then possibly to whole-line package sales
  • The global battery equipment market is set to see EMEA emerge as a major producing region by 2023
The Impact of the Pandemic 

The graphic below illustrates how we have revised our pre-Covid estimates for the battery production equipment market. The broken blue line traces our market estimate based on the new capacity plans announced by major battery manufacturers in early 2020. At that time, we predicted an aggressive rebound for most battery equipment manufacturers, after a relatively poor 2019. This would be followed by a slump in demand in 2021, and then a gradual increase in demand up to 2023. The red line describes the impact of the COVID-19 pandemic, effectively postponing the predicted 2020 spike in demand until 2021. Staff control measures in various countries have stalled most on-going projects. At the same time, the tightening of corporate investment may cause actual new production capacity to fail to be built as planned. New projects may be postponed or even cancelled. For this reason, while there is a recovery, it currently seems that the reduction in new production capacity in 2020 cannot be fully compensated in the years 2021-2023.

The excel document accompanying our report provides a highly detailed region-by-region breakdown of production capacity, investment, market-size and year-on-year growth already seen and predicted in the sector for the years 2013-2023, for all the major regions.

New Capacity Versus Upgraded/Renovated Capacity

The weakness of the traditional automobile industry has driven many OEMs to accelerate their transition to electric vehicles, and the demand for lithium-ion batteries has once again soared. Many leading battery suppliers have announced new capacity plans in 2020-1, so we have increased the production capacity forecast of the global market for the next 3-5 years. At the same time, Li-ion battery projects for non-EV applications have increased significantly. These applications include power tools, electric bicycles, energy storage devices, 5G base stations, etc. There are many smaller battery manufacturers that have turned to attack these areas as the barriers to the EV market are already high.

The data presented in our Excel document shows the predominance of new capacity production as opposed to renovated/upgraded capacity. A glance at our post-Covid figures for China tells the story:

Investment in new production capacity far outstrips retrofitting or upgrading existing machinery, rising to a predicted 110.1 GWh of newly-added capacity in 2023, as opposed to 16.7 GWh of upgraded capacity in the same year. This reflects the speed at which battery technology is evolving.

The Shift from Single Equipment Production to Production Lines

Expectations of manufacturers and developments in battery technology (such as chemical composition, packaging form, etc.) have compelled battery equipment producers to become more versatile in their offer. The move away from producing single machines for insertion into production-lines to the manufacture of complete line equipment production has benefits in terms of enhancing productivity and reducing maintenance and operations costs. Companies such as Mitsubishi Electric are leaders in this field.

EMEA Will be a Major Battery Equipment Producer by 2023

Our analysts are pointing to a significant rebalancing of global battery equipment production. As China’s grip on the sector is loosened, EMEA will emerge as a major player. By 2023, China will still be by far the most prolific regional producer, but we predict EMEA’s global market share of production will rise from 9.4% in 2019 to 23% in 2023. Companies are responding to the trend for on-shoring of key manufacturing sectors and to green initiatives such as clean energy investment, notably in the EV sector. Japanese and Korean battery companies (SKI, LG Chem, Samsung SDI, etc) as well as local battery companies and OEMs have accelerated the pace of investment in or expanding battery projects in Europe and also in North America. Although the Americas share of production is projected to drop by nearly 10% between 2019 and 2023, we forecast that the overall market share of regions in the Western hemisphere will be a significant 33% by 2023.

Our Report

This insight provides a brief glimpse into just one aspect of Interact Analysis’s detailed, data-rich and regularly updated report on the Lithium-ion battery market.

To continue to conversation about the LI battery market, please get in touch with Maya Xiao at maya.xiao@interactanalysis.com

Posted by Maya Xiao

Maya has an interdisciplinary technical background in system automation, renewable energy, and intelligent connected vehicles. She is responsible for Interact Analysis’ Chinese industrial automation and NEV research.