LITHIUM ION BATTERY MARKET ANALYSIS

Lithium Ion Battery Market Size and Trends

The lithium ion battery market is estimated to be valued at USD 63.70 Bn in 2024 and is expected to reach USD 192.33 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 17.1% from 2024 to 2031.

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The lithium ion battery market is expected to witness significant growth over the forecast period owing to increasing demand from electric vehicles and grid energy storage systems. Lithium-ion batteries are widely used in numerous applications such as consumer electronics, electric vehicles, energy storage, and others. Rapid urbanization and growing concerns regarding environmental pollution have increased the demand for EVs over the recent years. Favorable government policies and regulations supporting the use of electric vehicles along with declining battery prices are expected to drive the EV adoption worldwide. This growing EV demand has led OEMs to significantly invest in developing efficient and cost-effective lithium-ion batteries with higher driving range. Furthermore, the incorporation of lithium-ion batteries in grid energy storage systems to support increasing renewable energy integration will continue driving the market growth over the next decade.

Growing demand for electric vehicles

The rising demand for electric vehicles across the globe is a major driver behind the growth of the lithium ion battery market. With growing awareness about the environmental issues caused by conventional fuel-based automobiles, EV adoption has been surging in recent years. Automakers are heavily investing in electric and hybrid vehicles to transition to cleaner technologies. Stringent emission norms in various countries are also encouraging the shift towards EVs. Customers find EVs appealing due to lower running cost, instant torque generation, and tax benefits offered by governments.

Tesla has revolutionized the passenger EV segment with stylish vehicles that are packed with cutting-edge technology and convenience features. Other luxury automakers like BMW, Mercedes, and Audi are fast catching up with their premium electric offerings. Meanwhile, mass market leaders such as Nissan, Hyundai, and Kia have launched very competitive electric hatchbacks and sedans that are driving the EV adoption further. Commercial vehicles are also transitioning to electric power with new electric models being launched by companies catering to e-buses, e-trucks, and last-mile delivery vehicles. As battery costs come down rapidly, EVs are getting closer to achieving price parity with conventional vehicles. All these factors are resulting in a rocketing demand for lithium-ion batteries from the automotive industry. New battery gigafactories are also coming up across key markets to meet this growing appetite for lithium-ion cells.

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Increasing demand from electronics industry

Another major driver is the rising consumption of lithium-ion batteries from the field of consumer electronics. Right from smartphones to laptops, almost every essential electronic gadget nowadays uses rechargeable lithium-ion batteries. Improving disposable incomes in developing economies are allowing millions of people to upgrade to the latest electronic devices each year. Smartphones have become ubiquitous with over 6 billion users globally. New models are getting launched consistently with more powerful processors, dazzling displays, and advanced cameras - all of which demand higher battery capacities.

Portable devices like tablets, wearables, and wireless headphones have also become very popular. The exponential growth of online streaming services is driving up the need for large batteries in devices that support long hours of uninterrupted video playback. With 5G networks beginning their rollout, the data consumption on mobile is predicted to boom manifold in the coming years. This will further increase the battery lifetime requirements from mobile devices.