From Gigafactory to Giga-Business

Electric cars are only as good as their batteries—the producers of these batteries need to master the technologies and offer competitive prices if they are to succeed.

The cells are the battery’s main components. Their housing contains a cathode, anode, separator, and electrolyte. Costs can be reduced from 95 to 55 euros per kilowatt hour by 2030 by optimizing the choice of materials, increasing the efficiency of production processes, intelligent scaling, and selecting suitable production sites.  Photo: Porsche Consulting/Florian Müller

Ever more people are choosing to buy electric cars, also thanks to additional incentives for the purchase of new vehicles. It is now time for the industry to act and to establish battery factories rapidly in many parts of the world, including Europe. Known as gigafactories, they require huge levels of investment. But how and where can they become profitable businesses? A team of experts from Porsche Consulting has compared the associated opportunities and risks. Its comprehensive analysis focuses on modern battery technologies, efficient production processes, and the right sites and scaling for sustainable production in Europe.

EU countries are focusing on electromobility

Batteries play the same role in electric cars as engines do in conventional cars. They are of crucial importance for both the range and the charging speed. In the year 2021 they account for up to 40 percent of the overall cost of the new car. This makes electric mobility comparatively expensive. Their size, which is directly related to the range, is also an important factor in the decision to purchase an electric car. Nevertheless, the European Union (EU) saw a record number of newly registered electric cars in 2020, as reported by the European Automobile Manufacturers’ Association (ACEA). Premiums are still on offer to attract new customers because EU countries are placing a special emphasis on electric mobility in their efforts to meet the European Green Deal’s climate goals specified in late 2019.

Read the full article in Porsche Consulting Magazine