All the same, there is a lot more to the Gigafactory investment landscape than the government incentives. For one, the original equipment manufacturers (OEMs) in automotive and battery production spaces are leading the momentum in Gigafactory investment. About three-quarters of the global Gigafactory pipeline is based on OEMs’ projects. The striking element of the emerging landscape is how the Gigafactory business is forcing a vertical integration – automotive OEMs have entered into strategic joint venture partnerships with battery producers, technology companies, recyclers, and even mining companies. In particular, acquiring stakes in critical mineral assets is integral to OEMs’ strategy to gain a competitive advantage. Recent mining deals for Cobalt, Nickel, and Lithium assets stand out for the leading automakers involved, such as Tesla, Ford Motors, General Motors, Stellantis, and Volkswagen.

For most stakeholders, the integrity of the supply chain might be the defining factor in the overall calculation. This involves access to critical minerals and the capabilities to process them. The Chinese concentration in this regard stays unchanged in all projected scenarios, even as other options, such as in Canada, emerge as de-risking options. Also important is the role of technology. The dominance of Lithium-Ion is evident in the upcoming battery facilities. Yet, the encouraging results in alternatives, especially Sodium Ion, suggest that the projected trend in battery technologies may not be so apparent or predictable. The layers of uncertainties are enhanced once we factor in the multitude of competitive battery chemistries, necessary equipment, and human resources. As Gigafactories progress in the planning/development stages, the resource demand will pressure an already tight and competitive market of raw materials, equipment, and technologies.

With many unknowns, the evolving Gigafactory business holds learning opportunities across the spectrum. The capex involved won’t be limited to batteries, as the upstream segment is drawn into capacity addition to meet demand. This means a much bigger or broader capex cycle than what is apparent from project announcements. Furthermore, the vertically integrated Gigafactories business would operate quite differently from the conventional models of globally integrated units in automotive manufacturing. Therefore, the industry’s outlook is one of significant flux to arrive at an equilibrium eventually.

The report provides an insight into the globally upcoming Gigafactory market based on the research conducted by Pan American Finance (PAF) and its research partner, Alchemy Research and Analytics. The report provides an overview of the upcoming Gigafactory capacity investment, its key drivers, major market players, and the outlook across North American and European regions. The report covers some vital topics, including the capacity pipeline in the major countries and regions, the partnerships and joint ventures for critical materials and technology, major policy drivers impacting investor decisions, and emerging challenges. The secondary research of this report relied on credible publications of government authorities, industry associations, and research institutions, together with news reports, press releases, trade journals, and similar other sources.