China could produce more batteries than global demand by 2030, says US think tank

From ESS News

China’s battery manufacturing capacity could surpass projected global demand by 2030, according to a new report from the Carnegie Endowment for International Peace.

The report projects Chinese cell production capacity of between 5,862 GWh and 6,720 GWh by the end of the decade, compared with expected global demand of 4,000 GWh to 5,100 GWh.

The report estimates that battery cell manufacturing capacity across Organisation for Economic Co-operation and Development (OECD) countries will reach about 1,881 GWh by 2030, with a potential maximum of 2,422 GWh. Emerging markets including India and Indonesia are expected to account for an additional 217 GWh.

The study said China’s cost advantage continues to underpin its competitiveness. In Europe, Chinese-made nickel manganese cobalt (NMC) battery cells are priced 10% to 27% below locally produced alternatives, while lithium iron phosphate (LFP) cells are 24% to 50% cheaper. Chinese battery exports exceeded $6 billion per month in 2025, with Europe receiving nearly half of shipments.

The report identifies LFP batteries as the largest supply chain vulnerability for Western economies, noting that the chemistry now accounts for about half of the global lithium-ion battery market, driven by electric vehicles and battery energy storage systems (BESS). It estimates that about 98% of global LFP production capacity is located in China.

The authors also warned that sodium-ion batteries could follow a similar trajectory, with commercial-scale manufacturing currently concentrated almost entirely in China. By contrast, they said OECD economies hold stronger positions in next-generation silicon-anode and lithium-metal battery technologies.

The report said stationary energy storage is becoming an increasingly important source of battery demand as renewable energy deployment and electricity consumption from data centers continue to grow. It added that wider adoption of sodium-ion and lithium-metal batteries could reduce European demand for graphite by about 25.6% and cobalt by 8.7% by 2035, while increasing lithium demand by about 5.4%.

Rather than advocating full supply chain decoupling, the Carnegie Endowment recommended selective cooperation between OECD economies and Chinese companies through joint ventures and industrial partnerships, particularly in segments where alternative suppliers remain limited. It also called for coordinated industrial policies across the United States, Europe, Japan and South Korea, alongside greater support for sodium-ion manufacturers outside China and increased use of automation, digital twins and artificial intelligence to improve manufacturing efficiency.