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What are gigafactories? Opportunities and challenges presented with EV battery production

As the EV revolution accelerates, the construction of gigafactories worldwide is becoming increasingly common. It is believed that establishing a localised network of these factories will help stabilise supply chains currently reliant on Asian imports.

Illustration of What are gigafactories? Opportunities and challenges presented with EV battery production

What is a gigafactory?

A gigafactory is a huge industrial facility that mass produces batteries for electric vehicles (EVs), including hybrids and fully electric models.

The term "gigafactory," popularised by Tesla CEO Elon Musk with Tesla's Nevada plant, combines "giga", meaning a measurement multiplied by a billion, with "factory."

These plants, now constructed worldwide, do not manufacture vehicles but focus on battery production. They operate at gigawatt hour (GWh) capacities. This means that a factory with a 1 GWh capacity can produce enough batteries for about 17,000 vehicles.
 

How many gigafactories are there?

Currently, the world has over 240 operational gigafactories, a number projected to increase to more than 400 by 2030, as reported by Benchmark. These factories are expected to achieve a collective production capacity of nine terawatt-hours (TWh) by 2030. China leads in battery manufacturing, as it is home to seven of the ten largest battery producers, with CATL at the forefront.

Despite China's continued dominance in battery production by 2030, Western countries are making major strides through investments and regulations to position themselves in this sector. In Europe, Germany, Hungary, and France are important contributors, together hosting over half of Europe’s projected 1.2 TWh capacity across 19 of the region's 36 gigafactories.

Italvolt is another key industry participant, having entered into an exclusive partnership with Equans in 2021 to construct Italy’s first gigafactory. This facility will be one of the largest of its kind globally, with a production capacity of 45 GWh and an investment of approximately €3.4 billion. Strategically located in Scarmagno, northern Italy, this site is crucial for the European automotive industry, using its geographical position to attract a highly skilled workforce.

Yves Nussbaum, Equans France’s process industries market general manager stated: “The production of green batteries is a key asset for a more sustainable future, and we are proud to bring our process and environmental efficiency expertise to the large-scale Itavolt Spa project.”
 

How does a gigafactory work?

Gigafactories tend to be vast and are generally organized into sections, where battery manufacturing is divided into three primary phases:

  • The first phase involves producing two electrodes which are a cathode and an anode. This process includes several steps beginning with mixing, followed by coating, drying, and finally pressing into complete electrode sheets
  • Next, the assembly of each cell takes place. This step uses discrete automation, assembly lines, and robotics to assemble the component
  • The final phase is cell finishing, where the cells undergo their first charge and discharge within a high-throughput, warehouse-like setting.

In battery production, the process starts with research and development. In a gigafactory, battery producers use virtual tools to improve design, coordinate processes, and increase efficiency throughout product development. Over time, data from this virtual environment is collected and analysed, which helps to product test far quicker. As a result, the production cycle is far more systematic.
 

What are the benefits of gigafactory?

Gigafactories are essential for meeting energy transition goals and achieving net-zero and decarbonisation targets. Although China leads in producing 80 per cent of the world’s lithium-ion battery cells, countries like the UK, the EU, and the US are quickly trying to gain a larger share of the market.

Industry experts believe that having local battery manufacturers is key to the success of a country's automotive industry, especially for EVs. Manufacturing EVs close to where batteries are made can be economically beneficial due to lower transportation costs and potential savings compared to importing batteries from China. Producing batteries locally also reduces the environmental impact associated with long-distance transportation.

Global efforts to move away from internal combustion engines (ICEs) and towards sustainability reiterate the importance of gigafactories. They provide a local alternative to ICEs, which helps countries influence market trends and boost domestic EV production.

What are the advantages and disadvantages of gigafactories?

Gigafactories present challenges and opportunities as they become central to the shift towards renewable energy and EVs. One of the main challenges is the rising cost of raw materials and the increased demand for services, which affects major infrastructure projects globally. The rapid expansion of the industry also strains the limited supply of specialised manufacturing equipment needed for battery production.

The manufacturing process within gigafactories is complex, requiring precise control over temperature, humidity, and material quality to ensure optimal battery performance and safety. In addition, the scale of these factories introduces serious fire safety challenges that must be carefully managed to protect both the facility and its workforce.

However, the opportunities presented by gigafactories are as important. They are crucial in driving countries towards energy independence and reducing reliance on imported oil and gas by fostering the local production of EV batteries. This shift supports a more secure energy landscape and promotes environmental sustainability by decreasing the need for fossil fuels.

Gigafactories serve as hubs for innovation, especially in terms of advancing battery technologies, which can lead to further research and development opportunities. They are also key economic catalysts, capable of creating thousands of direct and indirect jobs across the supply chain, thereby boosting regional economic growth and attracting additional investments. Through these contributions, gigafactories play a vital role in shaping a sustainable, technologically advanced future.
 

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