European battery opportunities are booming according to a McKinsey and Company report on May 3, 2022. Surging demand is also opening opportunities for mega projects. However, a looming equipment shortage is on the horizon too. Recent electro mobility demand and the independent energy imperative are driving phenomenal growth.
Emerging European Start Ups Are Entering Industry
McKinsey and Company reports new entrants are joining established manufacturers for a share of the take. Together, they would like to achieve production of up to 965 gigawatt-hours per year in Europe by 2030. And this would represent 28% of the total global expectation, which has increased twenty-fold over the last two years.
However, those hopefuls first need to resolve three manufacturing equipment challenges collectively to meet those goals. McKinsey and Company estimates these parameters as follows:
1… First, 25% to 30% of capital goes towards electrode manufacturing equipment.
2… Then a further 25% to 35% goes towards cell-assembly-and-handling machinery.
3… And finally, 30% to 35% of capital requirements will finance cell-finishing plants.
A Looming Equipment Supply Muddies Those Goals
But Europe’s battery cell manufacturing equipment suppliers are thin on the ground. That’s because most of the industry clusters in China, Japan, and South Korea. They already have 95%-full order books, McKinsey and Company advises. Where will European startups source their mnaufacturing equipment?
The trusted advisor, and counselor to many of the world’s most influential businesses and institutions, says manufacturing equipment makers are in a good position. That’s because they have the option of increasing their capacity to deliver equipment.
However, they could also differentiate down the supply line, and manufacture batteries for the booming European market. We shall have to wait and see how they decide to divide their capital and their energy in future.
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