McKinsey & Company has published its latest insights analyzing the factors behind delays in starting mass production at gigafactories and potential solutions. Delays of approximately 6-9 months occur in some cases, creating a risk of substantial value loss.
McKinsey & Company has published its latest insights on delays in starting mass production at gigafactories being developed around the world. Investment of $1 billion-$7 billion per plant is under way to support global demand for high-performance batteries, but SOP (start of production) is often delayed by an average of 6-9 months from the plan. A six-month delay at a plant producing NMC811 cells at a capacity of 40 GWh is said to create a risk of approximately $250 million in value loss.
Five structural factors are cited as contributing to delays: the difficulty of simultaneously developing the product, manufacturing process and plant design; a shortage of experienced personnel; the concentration of the supply chain in Asia and the need to comply with local regulations; insufficient integrated management of stakeholders; and a shortage of experienced personnel.
Three common factors have been identified as enabling leading companies to start mass production within 18-24 months. These include thorough planning, optimization of local construction based on compliance with local regulations, and stronger project execution capabilities to integrate multiple parties.
Regarding the use of AI and implications for Japanese companies, AI and advanced data analytics are being used at plant construction sites, and efforts are under way to use generative AI to create and evaluate multiple options for milestone management and scheduling. As supply chains become more regionalized, Japanese companies will need strong launch capabilities, including the ability to respond to local regulations and coordinate among multiple suppliers.