Europe could face overcapacity of e-car battery production

Europe faces an overcapacity of e-car battery production as the continent supports the build-up of a domestic supply and a large number of factories are currently being constructed, reports business daily Handelsblatt. BMW bosses have decided against moving into battery production due to fears the market is already too crowded, Handelsblatt reports. “Now is the wrong time to invest in gigafactories,” board member Frank Weber told the newspaper, explaining that the company has already discussed and rejected a multi-billion-euro investment in the market several times. Plans for a large number of new battery factories around Europe have been announced in the past two years, with some such as Tesla’s Berlin Gigafactory receiving billions in state aid in a bid to stop the market dominance of Asian companies. BMW group CEO Oliver described the market as “very robust,” and the newspaper reports that the company will continue to purchase battery cells from Chinese manufacturer CATL, which has built a specialised factory in Thuringia.

Europe is becoming the second largest electric car market after China, with a demand of 900 gigawatt hours expected on the continent by 2030. However, the article authors say that the current factory boom risks becoming a bubble, as battery factories are only economically successful if they run at 90 percent capacity.