China set to outproduce global battery demand by 2030, Carnegie report warns

A Carnegie Endowment for International Peace report projects that by the end of the decade China’s lithium‑ion battery cell capacity will reach between 5,862 GWh and 6,720 GWh, far exceeding the expected global demand of 4,000 GWh to 5,100 GWh. The resulting overcapacity of up to roughly 2,600 GWh would give China a dominant share of the market, with about 98 % of worldwide lithium‑iron‑phosphate (LFP) production located there. Chinese battery exports already topped $6 billion per month in 2025, and Europe receives nearly half of those shipments. Cost advantages are pronounced: Chinese LFP cells are 24‑50 % cheaper than European equivalents and NMC cells are 10‑27 % cheaper.

The report warns that this concentration creates a strategic vulnerability for Western renewable‑energy and electric‑vehicle transitions, exposing them to geopolitical and supply‑chain disruptions. Rather than full decoupling, the authors recommend selective cooperation – joint ventures and industrial partnerships – and coordinated industrial policies across the United States, Europe, Japan and South Korea, alongside greater support for alternative chemistries such as sodium‑ion, silicon‑anode and lithium‑metal batteries.