BATTERY MARKET ANALYSIS

Battery Market Size and Trends

Global battery market is estimated to be valued at US$ 128.52 billion in 2024 and is expected to reach US$ 401.29 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 17.7% from 2024 to 2031.

To learn more about this report, request sample copy

Global battery market growth is driven by increasing demand for EVs and energy storage systems across the globe. Lithium-ion batteries continue to dominate the transportation and stationary storage applications due to their high energy density. Furthermore, decreasing prices of lithium-ion batteries makes EVs and energy storage more viable and affordable. Governments around the world are also supporting the shift to sustainable technologies by providing various incentives and subsidies for EVs and renewable energy projects. This increasing focus on reducing emissions is expected to boost demand for batteries over the next decade.

Rising Adoption of Electric Vehicles

Growing concern over environmental pollution and rising fuel costs have resulted in increased focus on developing more sustainable transportation solutions. Electric vehicles that run on advanced battery technologies are emerging as a viable alternative to fuel-based vehicles. Several automobile manufacturers have ramped up investments in electric vehicles in response to tightening emission norms and shifting consumer preferences towards green mobility options. Battery electric vehicles and plug-in hybrid electric vehicles provide comparable driving ranges to gasoline vehicles and allow consumers to refuel using electricity from the grid instead of gasoline. The upfront costs of EVs are compensated over time through lower fuel and maintenance expenses. Supportive government initiatives such as purchase incentives and investments in charging infrastructure are encouraging more consumers to make the switch to EVs. Major automakers are aggressively expanding their EV lineups with new models featuring longer driving ranges. This rising adoption of electric vehicles across passenger and commercial segments is anticipated to boost demand for advanced lithium-ion battery packs.

For instance, in September 2023, Gotion, a lithium-ion battery manufacturer, announced a US$ 2 billion investment in its inaugural factory in Manteno, Illinois, U.S. This facility, slated to become the largest EV battery production, will repurpose an existing Kmart distribution center and is projected to employ up to 2,600 workers. The plant will churn out 40 GWh lithium-ion battery cells and 10 GWh battery packs, focusing on energy storage system integration and supporting Illinois' climate change objectives. Gotion stands to gain significant state incentives and intends to erect a battery component factory in Michigan.

The constant evolution of digital technologies and increasing usage of smart devices have heightened the importance of uninterrupted access to electricity. Power outages remain a persistent problem in many parts of the world, owing to aging electrical infrastructure, natural calamities and grid failure risks. To safeguard against unexpected disruptions in power supply, industrial facilities, telecom towers, data centers and buildings have been strengthening their dependency on battery backup reserves. Lithium-ion batteries are the technology of choice for such backup power applications due to their high energy density, long service life and relatively lower self-discharge rates compared to lead-acid alternatives. In remote and off-grid areas lacking access to centralized power networks, batteries play a vital role in energizing essential needs through micro-grid and solar-plus-storage solutions. The growing energy needs of a digitally connected world along with instability in conventional grids is propelling the battery storage industry. As reliance on backup power grows, there will be a corresponding rise in demand for advanced battery packs that can effectively deliver on reliability, performance and long-term cost viability.

For instance, in June 2020, Tesla announced plans to manufacture next-generation electric vehicle batteries, designed to eliminate the rare, costly, and controversial element cobalt from batteries. This breakthrough technology is poised to enable cars to travel 400 miles or more between charges.