Over the past few weeks, BEV assembly and battery plants have
opened, started construction, and been delayed, as globally the
industry adjusts to an inconsistent demand path.
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New BEV battery capacity comes online in
Asia-Pacific
Inconsistent demand growth for battery electric vehicles (BEVs)
in 2024 is increasingly expected to continue in 2025. As automakers
balance capital expenditure and consumer demand, a number of
battery projects are being delayed and revised, while others are
moving full steam ahead.
On the BEV battery side, a plant between Hyundai Motor and LG
Energy Solution (LGES) has started production in Indonesia. It is
the first battery cell plant in the country, with annual capacity
of 10 GWh of battery cells and supported by a US$1.1 billion
investment announced in 2021.
On the vehicle assembly side, GAC Aion, a new energy vehicle
subsidiary of GAC Group, has inaugurated a new plant in Thailand.
That plant has annual capacity of 50,000 units and saw US$65
million invested. The GAC Aion plant is the second of its kind to
be opened in Thailand this month; BYD's plant opened in early July
with capacity for 150,000 new-energy vehicles each year.
VinFast has also started construction on a new plant in
Indonesia, aimed at building right-hand drive versions of the VF 3,
VF 5, VF 6 and VF 7 vehicles for the Indonesian market; this plant
is planned to have 50,000-unit annual capacity.
In North America, battery projects are delayed and
revised
Meanwhile, on the other side of the world, Ford and GM have
slowed ramp-up of their BEV production capacity increases. This
slowdown is having an impact on North American manufacturing
investments, while VinFast is finding that breaking into the US is
more difficult than expected.
After GM's CEO confirmed the company will not reach the target
for 1 million units of installed BEV capacity in 2026, LGES
indicated it will slow construction on a new battery cell plant in
Michigan. LGES said that it will adjust the speed of its overall
investments and is looking for ways to ensure its plants are
flexible, comments which suggest other changes could be made. The
GM-LGES Michigan plant is an Ultium Cells LLC joint venture with
GM, the third between the two in the US.
Ford has also announced another shift in its North American
manufacturing plans. Instead of producing the planned three-row BEV
utilities for the Ford and Lincoln brands at its Oakville, Ontario
(Canada), plant, Ford will start building the current-generation
F-Series Super Duty truck there in 2025. As soon as 2026, the next
generation will be produced there as well. Ford committed to
electrified solutions for the next Super Duty, though stopped short
of committing to BEV production at Oakville.
Announcing global sales of 21,747 vehicles in the second quarter
of 2024, VinFast reduced its guidance for 2024 full-year sales from
100,000 units to only 80,000 units. VinFast also delayed its first
US BEV plant to 2028; this is the second delay for a plant which
was initially meant to see production start in July 2024.
Meanwhile, Turkey gets BYD investment and creates
potential hedge against EU tariffs
Turkey's government announced that it will not impose tariffs on
Chinese automakers who invest locally, after imposing a 40% tariff
on mainland Chinese passenger car imports. US presidential
candidate and former President Donald Trump has said that he might
consider a similar policy if he wins the US election in November
2024.
In early July BYD reached an agreement with Turkey to invest
US$1 billion into vehicle production there. SAIC is also said to be
in discussions to begin production in Turkey, while Chery said in
an earlier statement, “We are working intensively on the
feasibility analysis of factory construction in Turkey and
production in Turkey together with the relevant Ministries. We are
striving to be able to produce in Turkey as soon as possible.” Any
facility constructed in Turkey could potentially circumvent tariffs
imposed by European Union member states.
S&P Global Mobility sees BEV production reaching 59%
of light-vehicle production — in 2036
The S&P Global Mobility June 2024 light vehicle production
forecast sees production of BEVs continuing at a fairly aggressive
upward slope, even with consumer hesitation in 2024. Global
light-vehicle BEV production is expected to overtake internal
combustion engine (ICE) production in 2029.
By 2036, we see global BEV production at just 59% of all
light-vehicle production. However, we also see the potential for
Germany with 97% of its light-vehicle production having shifted to
BEVs by then.
In Mainland China, which will continue to be the highest-volume
producer of BEVs, only about 64% of light-vehicle production is
forecast to be BEVs by 2036. Mainland China's drive toward new
energy vehicles (NEV) as opposed to a laser-focus on BEVs leaves
more room for solutions like plug-in hybrid (PHEV) and
range-extended electric (REX) vehicle solutions; those are forecast
to see, roughly, respective 17% and 7% of mainland China
light-vehicle production in 2036.
The US is expected to be the third-highest BEV producer in 2036;
we forecast that 75% of light-vehicle production could be BEVs by
that year. Indonesia and Thailand are long-standing
vehicle-producing countries, with opportunity for both the home
market and for exports. Still, a BEV transition is expected to take
a little longer there; in 2036, we forecast Thailand BEV production
at about 50% of the country's output. In Indonesia we see BEV
output reaching 26% of production.
Though at this point, a shift to BEV-dominant vehicle production
and sales is assumed to be a “when” rather than an “if” question,
we will continue to see OEMs and suppliers revising immediate plans
as they balance the need to have capacity to support the shift,
while not having too much too soon.
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