Industry Value Chain

Overcapacity at 4x Demand Continues to Erode Margins Across the Value Chain

Average global battery pack costs may have fallen to $108/kWh, but there are regional disparities

Chinese battery firms have operating capacity at 4x market current demand and pack costs were roughly $84/kWh (a 13% drop YoY

Chinese firms are also largely vertically integrated across the battery supply chain and control the majority of global high-purity battery raw material production

This dominance is being exacerbated by fierce competition in China pushing prices downward that will continue into 2026

Pack prices are roughly 44% higher in the U.S. and 56% more in Europe compared to China, causing many cancelled plans and re-evaluations of OEM electrification strategies

Annual Global Capacity in Terawatt-Hours

Graph represents risk-adjusted cumulative lithium battery cell manufacturing capacity by region, compared with as-reported global capacity

Source: Data from BloombergNEF Distinguished Partner).

Extracted from the PDF; charts and images may read imperfectly.