How the big bet on electric car gig factories went badly...

How the big bet on electric car gig factories went badly wrong
James Titcomb

Mon 29 July 2024 at 4:04 pm

The future will be battery-powered, we are told. Silent electric cars will replace their gas-guzzling predecessors. Energy storage packs will power houses and offices, filled with the electricity generated by wind and solar. Eventually electric ships and aeroplanes will help eliminate emissions altogether. The electrified economy will need terawatts of storage.

In this world, making batteries should be about as solid a business as one could imagine: practically a licence to print money. Hundreds of billions of dollars, euros and renminbi are being invested in battery gigafactories in an attempt to profit from the coming revolution.

But as the wave of money hits, battery manufacturing is becoming less of a gold rush and more of a brutal race to the bottom...

Earlier this month, SK On, the South Korean battery giant, declared that it was in a state of “emergency management” after continuing losses and disappointing EV sales among the Western car makers that make up its biggest customers. The company has recorded 10 quarters of consecutive losses and delayed plans for a giant battery factory in Kentucky amid a sales slowdown.

On Thursday, its Korean rival LG Energy Solution unveiled a 30pc drop in quarterly sales and said it was slowing investments in order to “prevent excessive inventory”.

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