“The amount of manufacturing production for batteries in particular that’s been planned in the United States has grown tremendously,” lead author David Gohlke told Canary Media this week.
U.S. lithium-ion battery cell production is still smaller than the legacy lead-acid battery industry, but growing fast. Argonne modeled that this capacity hit 74 gigawatt-hours in 2023 and will grow to 1,133 gigawatt-hours in 2030, based on currently expected factory construction.
Factory capacity differs from actual utilization, however. Newly built gigafactories undergo laborious calibration and testing before they can produce at full bore while hitting stringent quality parameters.
So, how does this production capacity compare with America’s increasingly insatiable appetite for batteries? Argonne’s models show that the U.S. economy needed 100 gigawatt-hours of rechargeable batteries in 2023, and that figure will grow to 1,080 gigawatt-hours by 2030. Electric vehicle production gobbles up about 92 percent of that battery capacity, with stationary grid storage taking the remainder; the demand is like a slice of cake, almost all vehicles with grid storage icing on top.
In practice, the U.S. doesn’t need to produce every gigawatt-hour of this total battery demand itself. Some American EV factories build cars with imported battery cells; likewise, some cars packed with U.S.-made cells get exported to other countries, showing up in their total battery demand. Some of the total EV demand is met by entirely imported cars. The policy goal advanced in the two landmark Biden laws is to increase the portion of U.S. battery consumption that’s supplied domestically.
The Argonne report suggests that the U.S. today needs more batteries than it can possibly produce even if its factory fleet operates at full tilt. But battery factory capacity will rocket through exponential growth, kicking in hard in 2026 and 2027. By 2030, Argonne models domestic lithium-ion cell production as a bit ahead of demand for that kind of battery.
For this hopeful scenario to come true, of course, companies need to actually build all the factories they’ve promised to build. The Argonne researchers “aim to be rather conservative” in their accounting of expected battery factories, Gohlke said. But the real-world outcome is sure to be a bit more chaotic than planned.
The buildout has already seen some attrition, as automakers shuffle back from their recent confidence that consumers want to buy electric offerings. Some factories have collided with political headwinds, like the U.S. subsidiary of Chinese manufacturer Gotion, whose plan to drop $2 billion into rural northwest Michigan ran into a barrage of anti-China bluster from conservative politicians. European startup Northvolt declared bankruptcy in the fall and shed U.S. manufacturing assets; other aspiring battery startups could run out of cash too.
Then again, successful manufacturers could develop new sites or expand their early footholds, which would push the tally back in the right direction.
The other big caveat here is that producing enough cells to meet domestic demand is not the same thing as achieving self-sufficiency in batteries. All the critical precursor steps — mining, refining, synthesizing the highly tailored materials to make cathodes and anodes — still happen mostly overseas, and China holds the keys.
“This production of battery cells is nominally sufficient to meet the demand for a rapidly electrifying economy,” the Argonne researchers wrote, of the ten-year outlook. “However, looking at the production of the components which go into these batteries, we do observe a shortfall for most of the constituent battery components.”
That’s natural for this early stage of onshoring the battery economy.
“If there’s not a known demand for these battery cells, then you’re not going to get an influx of the companies making components for those cells,” Gohlke explained.
So there’s a logic to building out cell production first, even with imported materials, to create demand for the steps further up in the supply chain.
That first part of the plan is happening, as fast as multi-billion-dollar battery factories can be built; if those factories succeed in making high-quality batteries without costing too much, they could pull in a new wave of supply chain investments. And upstream investment in minerals extraction typically takes longer to build than a battery factory, in any case, Gohlke noted.
It’s been a busy couple of years, but the economic effects of the gigafactory boom are just starting to be felt.
