Forecasts of Excess Production Capacity for Electric Vehicle Batteries
In recent years, automakers have actively invested in the electrification of their models, anticipating rapid growth in demand for electric vehicles worldwide. The industry has invested billions in the construction of new battery manufacturing plants, particularly in North America.
However, new research indicates that a significant portion of this capacity may remain unused by the end of the decade.
Excess Capacity and Its Consequences
According to AlixPartners, global manufacturing capacity for electric vehicle batteries in 2030 could exceed demand by approximately three times. In North America, battery production volumes are expected to increase nearly fourfold.
Many manufacturers are already scaling back their ambitious plans. For example, Ford, which was one of the most active investors in battery production in the United States, reduced its planned capacity by 35%. The company also suspended production of the F-150 Lightning electric vehicle due to declining demand.
AlixPartners predicts EV battery capacity will triple global demand by 2030.
Ford cuts its planned battery capacity by 35 percent amid lower EV sales.
Impact on Jobs and Other Companies
General Motors has also been forced to make adjustments: it confirmed the layoff of 1,550 employees at battery plants it operates jointly with LG Energy Solution in Ohio and Tennessee. This is linked to a slower transition to electric vehicles and changes in the regulatory environment.
Panasonic, a key supplier for Tesla, is also feeling the effects of declining demand. Although the company opened a new plant in Kansas in July, it has not yet announced when it will reach full-scale production. It was previously expected to happen by the end of fiscal year 2026.
Panasonic’s expansion stalls as Tesla demand dips in North America.
Project Cancellations and Policy Changes
Due to the slowdown in electric vehicle sales in the US, some projects have been completely canceled. For instance, T1 Energy planned to build a battery plant in Georgia but abandoned the idea.
The Trump administration’s policies have also impacted the situation: the cancellation of the federal $7,500 electric vehicle tax credit and the elimination of penalties for failing to meet emissions targets have allowed automakers to increase production of internal combustion engine vehicles again.
These changes indicate that the electric vehicle market may be undergoing a period of correction after years of rapid growth. While the long-term prospects for electric transport remain positive, current trends suggest the need for a more flexible approach to investments and production capacity. Automakers will likely have to adapt to changing demand and regulatory conditions to avoid excessive costs and inefficient use of resources.