By ESS news
China’s battery production capacity could exceed projected global demand by 2030, according to a new report from the Carnegie Endowment for International Peace.
The report predicts that China’s cell production capacity will be between 5,862 GWh and 6,720 GWh by the end of this decade, compared to expected global demand of 4,000 GWh to 5,100 GWh.
The report estimates that battery cell production capacity in Organization for Economic Co-operation and Development (OECD) countries will reach approximately 1,881 GWh in 2030, with a potential maximum of 2,422 GWh. Emerging markets, including India and Indonesia, are expected to account for a further 217 GWh.
According to the study, China’s cost advantage continues to underpin its competitiveness. In Europe, Chinese-made nickel-manganese-cobalt (NMC) battery cells are 10% to 27% cheaper than locally produced alternatives, while lithium iron phosphate (LFP) cells are 24% to 50% cheaper. China’s battery exports exceeded $6 billion per month by 2025, with Europe receiving almost half of the shipments.
The report identifies LFP batteries as the biggest supply chain vulnerability for Western economies, noting that the chemical now represents around half of the global lithium-ion battery market, powered by electric vehicles and battery energy storage systems (BESS). It estimates that about 98% of global LFP production capacity is in China.
The authors also warned that sodium-ion batteries could follow a similar trajectory, with commercial-scale production currently almost entirely concentrated in China. In contrast, they said OECD economies are in a stronger position in next-generation silicon anode and lithium metal battery technologies.
According to the report, stationary energy storage is becoming an increasingly important source of battery demand as renewable energy deployment and data center electricity consumption continue to grow. It added that wider adoption of sodium-ion and lithium-metal batteries could reduce European demand for graphite by around 25.6% and cobalt by 8.7% by 2035, while lithium demand would increase by around 5.4%.
Rather than advocating complete supply chain decoupling, the Carnegie Endowment recommended selective cooperation between OECD economies and Chinese companies through joint ventures and industrial partnerships, especially in segments where alternative suppliers remain limited. It also called for a coordinated industrial policy in the United States, Europe, Japan and South Korea, along with greater support for sodium ion manufacturers outside China and greater use of automation, digital twins and artificial intelligence to improve production efficiency.
