Global EV battery capacity is expanding at a pace far beyond market demand. According to S&P Global Mobility, by 2025 global capacity will reach 3,930 GWh, while demand is expected to be only 1,161 GWh — an oversupply of 3.4x. Even by 2030, supply is projected to remain at 2.4x demand.
Market dynamics:
- China controls about 70% of global share, led by CATL (#1) and BYD (#2).
- Korea’s LG Energy Solution holds #3, while Japan’s Panasonic has fallen to #6 with declining share.
- North America faces the sharpest mismatch, with 2025 supply projected at 4.8x demand, despite strong policy support from the Inflation Reduction Act.
Corporate strategy shifts:
- Panasonic has delayed full production at its new U.S. battery plant due to weaker Tesla sales.
- Toyota postponed plans for new EV battery factories in Japan and Canada.
- Overall, automakers are scaling back investment as inventory and profitability risks grow.
Pricing impact:
Oversupply is pushing costs down. The average U.S. battery price dropped to $111/kWh in 2024, a 26% decline from 2023, and could fall to $80/kWh by 2026.
Key takeaway:
The EV battery race is no longer just about capacity expansion. The next phase will be defined by cost competitiveness, technology innovation, and resilient supply chains. Companies that fail to adapt risk being caught in a wave of overcapacity.