To plug the gap between today’s battery industry and 2040 battery demand will require at least $1.6 trillion of investment, according to Benchmark. This is almost triple the $571 billion needed to meet 2030 demand.

Such large investments are needed as battery demand is forecast to grow from 937 gigawatt-hours in 2023 to 3.7 terawatt-hours in 2030. From 2030 to 2040, battery demand will double again, according to Benchmark’s Lithium-ion Battery Database.

Of this 2040 investment, 44% is needed to build the battery gigafactories that produce the battery cells and assemble the packs.

As more gigafactories come online and an increasing number of electric vehicles reach their end of life, the battery scrap pool is set to grow substantially. To build the capacity required to recycle this scrap into battery materials will require $26 billion by 2030.

The required investment grows five-fold to $157 billion to process the large amount of battery scrap that is forecast to be available by 2040.

Of the critical raw materials, lithium will require the largest investments: $94 billion to meet 2030 demand, and double that to meet 2040 demand.

Cathode active material production accounts for 52% of the midstream investment needed to meet 2040 demand.

These investment costs are all based on Benchmark’s base-case scenario. If the ambitious targets set out by policymakers and industry are all to be met, this investment number will need to increase even further.