"In North America, there is 1.9 times as much capacity as demand. In Europe, the capacity-to-demand ratio is 2.2. And China, there is an absolutely stunning flood of capacity: 5.6 times as much battery-building capacity as there is demand for batteries. With tariffs restricting the country's EVs and components from major markets, too, it's a tenuous time to be a Chinese battery supplier."
""At the industry scale, globally, really five times the demand versus three times the demand is not really very different. No matter where you go at this moment, the capacity is still way beyond what the demand is," Gujarathi said in an interview. Because even if North American capacity looks better on paper, it is under-supplied in some ways. There's very little local production of lithium-iron-phosphate batteries, for instance, which offer lower costs and better durability at the expense of density."
Global EV battery manufacturing capacity far exceeds current demand across all major markets, with capacity-to-demand ratios of roughly 1.9x in North America, 2.2x in Europe and 5.6x in China. Heavy incentive spending, tariffs, and regional policy distortions have driven rapid capacity additions, particularly in China. High material and production costs keep many EVs pricier than gasoline cars, weakening demand. Limited local production of lithium-iron-phosphate (LFP) batteries in some regions reduces low-cost supply options. Existing plants are overbuilt and markets lack near-term incentive to add new capacity, creating financial risk for battery makers.
Read at insideevs.com
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