Analyst: Overcapacity in the battery market

An overcapacity in the battery market means that the competition has intensified. But the fact that Northvolt is scaling down right now does not mean that the company is out of the game, according to automotive analyst Hampus Engellau.

» Updated: October 04 2024

» Published: September 09 2024

Analyst: Overcapacity in the battery market
Photo: Magnus Lejhall/TT

Share this article

The battery factory Northvolt in Skellefteå is putting the production of so-called cathode material – an important part of battery production – on hold. The material can be purchased elsewhere, including from China, which is the largest in both electric cars and battery production in the world.

"Overcapacity prevails"

If you look generally at the battery market, you can say that the plans to set up capacity wildly exceed demand, there is overcapacity. This also means that there is quite tough competition, says Hampus Engellau, automotive analyst at Handelsbanken.

Among other things, BMW has withdrawn from a larger commitment with Northvolt, which affects the Skellefteå factory.

At the same time, the entire Western world has become aware of the dependence on China and Chinese components in car manufacturing. Both Europe and the USA want to have their own battery industry, he notes.

"Too ambitious plans"

But the fact that the capacity that follows from the plans to build battery factories far exceeds demand over the next ten years does not mean that Northvolt cannot be competitive and successful in the future. Many of the plans may not come to fruition, for example.

I think Northvolt's problem is that they may have had slightly too ambitious plans, that they may have wanted to take too many big steps at the same time.

At the same time, electric car sales have slowed down.

Almost all electric car sellers who had targets for how many cars they would sell in 2025 or 2030 have backed down from that, due to the lack of demand from consumers, says Hampus Engellau.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Wall Street Sees Modest Gains as Trading Week Begins
1 MIN READ

Wall Street Sees Modest Gains as Trading Week Begins

Railway Derailments Disrupt Swedish Industry and Economy
3 MIN READ

Railway Derailments Disrupt Swedish Industry and Economy

Brazil's Lula Criticizes Trump's Tariffs at Brics Meeting
1 MIN READ

Brazil's Lula Criticizes Trump's Tariffs at Brics Meeting

Swedish Pensions Agency Reclaims 48 Million Kronor for Allra Victims
2 MIN READ

Swedish Pensions Agency Reclaims 48 Million Kronor for Allra Victims

Space X Acquires Network Spectrum from Echo Star in $17 Billion Deal
1 MIN READ

Space X Acquires Network Spectrum from Echo Star in $17 Billion Deal

Klarna Valuation Could Reach 150 Billion Kronor in 2023 Analysis
1 MIN READ

Klarna Valuation Could Reach 150 Billion Kronor in 2023 Analysis

Criticism Over No Increase in Sweden's Child Allowance
2 MIN READ

Criticism Over No Increase in Sweden's Child Allowance

Southern Sweden Gains Most from Electricity Price Protection
3 MIN READ

Southern Sweden Gains Most from Electricity Price Protection

Left Party Urges Transparency on Food Prices Ahead of VAT Reduction
1 MIN READ

Left Party Urges Transparency on Food Prices Ahead of VAT Reduction

German Industrial Production Surges Beyond Expectations in July
1 MIN READ

German Industrial Production Surges Beyond Expectations in July

NCC Highlights Sand and Gravel Shortage Threatening Nordic Projects
1 MIN READ

NCC Highlights Sand and Gravel Shortage Threatening Nordic Projects

Dollar and US Interest Rates Under Pressure Amid Fed Rate Cut Speculation
1 MIN READ

Dollar and US Interest Rates Under Pressure Amid Fed Rate Cut Speculation

Stockholm Stock Exchange Opens Week with Gains as OMXS Index Rises
2 MIN READ

Stockholm Stock Exchange Opens Week with Gains as OMXS Index Rises

Lower Taxes and Cheaper Preschool Proposed in Swedish Budget
3 MIN READ

Lower Taxes and Cheaper Preschool Proposed in Swedish Budget

Rising Evictions Impact More Children Amid Economic Struggles
2 MIN READ

Rising Evictions Impact More Children Amid Economic Struggles

Swedish Financial Authority Investigates Stock Fraud Targeting Small Investors
2 MIN READ

Swedish Financial Authority Investigates Stock Fraud Targeting Small Investors

Tokyo Stock Exchange Opens Week with Gains in Nikkei and Topix
1 MIN READ

Tokyo Stock Exchange Opens Week with Gains in Nikkei and Topix

China's Giant Solar Park in Qinghai: A Symbol of Green Transformation
3 MIN READ

China's Giant Solar Park in Qinghai: A Symbol of Green Transformation

South Korean Workers Detained in US Hyundai Raid to Be Flown Home
1 MIN READ

South Korean Workers Detained in US Hyundai Raid to Be Flown Home

Trump's Eight Strategies to Challenge Wind Power Expansion
4 MIN READ

Trump's Eight Strategies to Challenge Wind Power Expansion