Despite a strong existing pipeline, both economic and geopolitical factors weigh on lithium-ion battery projects in the USA and Europe.

While there were only a few significant lithium-ion battery cell project cancellations in the past quarter, several projects encountered challenges or required adjustments to their original plans:

• Panasonic announced that it has revised its production targets for its Kansas Gigafactory in the USA, but did not specify a new outlook.
• AESC paused construction work on its factory in South Carolina, USA. The reason cited for the temporary halt to construction relates to uncertainty regarding US economic policy and market conditions.
• Ola Electric's plans for expansion of its gigafactory in Tamil Nadu, India, have been delayed. The expansion to 5GWh will likely only take place in 2026; two years later than originally planned.
• In Japan, Nissan's plans for a US$1.1Bn gigafactory in Kitakyushu were abandoned. The plant was supposed to start supply by July 2028 and have an annual production capacity of 5GWh.

Whilst European EV sales have positively returned to growth for 2025, the industry still faces cost and efficiency challenges when competing with China. For the USA, EV sales have stalled so far in 2025.

However, positive momentum remains within the space as supply chains face a stronger shift away from dependence on China owing to the Trump Administration.

For both regions, the industry has to move rapidly in response to the monumental speed of China's development across the whole supply chain. This spans both production capability and the technological advancements propelling the industry across the mid to downstream.