Tier 2 Li-ion battery manufacturers’ gigafactories expanding capacity

In Roskill’s view, these announcements have been driven by secured contracts with clients seeking long-term and high-volume supply agreements. 

“Using Envision AESC as an example, once completed, the Ordos, Inner Mongolia plant will be its fifth Li-ion battery gigafactory, with the products scheduled to supply energy storage and automotive industries,” the analysis reads. “In December 2020, Envision AESC signed the strategic cooperation framework agreement with the Inner Mongolia provincial government, which has strived to build energy storage projects to couple with increasing production of solar and wind power in the region.”

According to the market researcher, these companies were also successful at securing funding, which also allows them to raise capacity. SVOLT is mentioned as a good example, after the firm was able to get a financing round of $540 million in February 2021 to facilitate its ramp-up plan in the manufacturing capacity.

“In 2021, although the scale of manufacturers, like SVOLT, Envision AESC, and EVE Energy, are still incomparable to that of Tier 1 players, like CATL, these battery makers have stood out from other Tier 2 companies,” the document states. “In a fast-growing industry, Roskill forecasts some Tier 2 battery makers will boost their standing and reach Tier 1 status in the next 2-5 years by improving the quality and scale of Li-ion battery products and securing long-term purchasing contracts.”