Battery Market is estimated to be valued at US$ 128.52 billion in 2024, exhibiting a CAGR of 17.7% over the forecast period 2024-2031. Furthermore, rising adoption of electric vehicles across the globe boosts demand for advanced batteries.
Market Dynamics:
Rising demand for EVs: Rapid urbanization and increasing concerns regarding environmental pollution has accelerated the adoption of electric vehicles globally. Various governments are offering subsidies and tax rebates to promote cleaner mobility solutions. This boosts demand for advanced batteries with higher capacity and faster charging capabilities. According to IEA, the global EV stock exceeded 10 million in 2020 and is estimated to grow at a rate of over 30% annually till 2030.
Growing investments in energy storage solutions: Infrastructure development and integration of renewable energy is gaining prominence worldwide. However, intermittent power supply from sources like solar and wind energy necessitates robust energy storage mechanisms. This has encouraged huge investments by both private and public entities in battery energy storage projects. For instance, Tesla invested over USD 200 million in its Megapack battery project in Victoria, Australia. Such initiatives are expected to open new growth avenues for battery manufacturers.
Market Drivers:
Growing electric vehicles industry boosts demand for batteries
The rise of electric vehicles (EVs) globally is expected to drive the growth of battery market. As governments around the world implement policies and regulations promoting the adoption of EVs to reduce emissions, there is huge demand for EV batteries. Major automakers are heavily investing in developing new EV models and expanding their production capacities. For example, Tesla aims to produce over 1.5 million EVs annually by the end of 2022. Increased EV manufacturing will require massive volumes of lithium-ion batteries. Battery demand for EVs will grow by over 25% each year through 2030. Automakers and battery makers are also forming strategic partnerships and developing novel battery chemistries and technologies to increase vehicle range and lower battery costs. This focus on innovation will further accelerate battery usage in EVs.
Growth in consumer electronics boosts battery usage
Smartphones, tablets, laptops, and earbuds are must-have products for billions of people worldwide. As these gadgets become more powerful and portable, their batteries need to last longer without adding bulk. Battery companies are always working on making batteries that can store more energy for longer use without making devices heavier. Also, because people want the newest electronics, they often upgrade their gadgets, creating a steady demand for batteries. Plus, the popularity of wireless headphones, smartwatches, fitness trackers, and virtual reality devices is opening up new markets and chances for battery suppliers and makers.
Market Challenges:
Supply chain issues pose challenges for battery producers
Overreliance on certain countries like china for raw material and component supplies can hamper the market growth. For instance, China dominates global production of battery cathode materials like lithium, cobalt, graphite and nickel that are vital for lithium-ion batteries. When supply chain disruptions or trade tensions affect Chinese exports, it also impacts battery availability and costs across many markets. This reliance puts battery makers at risk of both shortages and price volatility outside of their control. Diversifying procurement networks and developing local sourcing in key regions has emerged as a priority.
Geopolitical tensions create raw material security concerns
Due to the importance of materials like lithium, cobalt, and nickel, countries such as the U.S., EU nations, and Australia are worried about relying too heavily on unstable or unfriendly countries for these imports. For instance, many cobalt mines are in the politically unstable Democratic Republic of Congo, leading to disruptions in battery supply chains due to mining disputes. Additionally, China's dominant position in battery material refining raises concerns about national security beyond its borders. These geopolitical tensions pose an ongoing challenge as governments seek greater energy independence and local processing capacity for battery materials sourced from friendly suppliers and nations. Achieving self-sufficiency in raw materials presents a hurdle for battery producers, who must devise diversification strategies to address this issue.
Market Opportunities:
Growth in clean technologies innovation presents lucrative opportunities
Countries and companies worldwide are investing heavily to make renewable energy from sources like wind and solar power more common. Battery systems will be crucial in making these technologies work on a larger scale. Big batteries are being used for things like storing energy for the power grid and providing backup power for utilities, data centers, and factories. How good and cheap batteries get, and how long they last, will decide how well these systems catch on. This is a big new market worth billions of dollars, and big battery companies are going after it hard with new products and partnerships in clean technology. Being a leader in this area could mean big gains in technology and market share.
Emergence of new applications will deepen battery integration
Apart from just cars and gadgets, batteries are becoming more important across various industries. Things like wearable tech, medical devices, smart home gadgets, drones, toys, and tools all rely on batteries for power. Even solar power systems that aren't connected to the grid need batteries to store energy. With the growth of 5G networks and smart infrastructure, there's going to be even more demand for batteries in things like electric buses, farm robots, and construction machinery. As battery technology gets better, new uses for them are popping up, opening up new business opportunities. Battery companies need to keep an eye on these new areas to find where the next big demand will come from. By improving their technology and products to fit these new needs, they can make more money.
*Link: https://www.coherentmarketinsights.com/market-insight/battery-market-5170
Key Developments:
- In October 2023, Japanese researchers devised lithium-ion batteries sans cobalt, a pricey and scarce material usually present in such batteries. Their novel approach blends various elements in the electrodes, such as lithium, nickel, manganese, silicon, and oxygen. This results in batteries that are 60% more energy-packed and potent, boasting a voltage of 4.4 volts. Moreover, these experimental batteries demonstrated robust longevity, retaining 80% of their capacity even after undergoing over 1,000 charging and discharging cycles. This breakthrough holds promise for enhancing the environmental, economic, and social aspects of battery production.
- In October 2023, photoionization detection (PID) sensors emerged as pivotal tools in identifying potential issues in lithium-ion (Li-ion) battery production and usage. Li-ion battery safety concerns, including incidents like overheating and exploding batteries, necessitated such advancements. PID sensors can pinpoint volatile organic compounds (VOCs) emitted by faulty Li-ion batteries, facilitating early fault detection, bolstering safety measures, and catering to the surging demand for battery monitoring technology. This technology is especially critical in averting battery ignition and toxic gas emissions.
- In October 2023, researchers uncovered a method leveraging manganese, a more abundant mineral, to produce cost-effective, high-performance lithium-ion (Li-ion) batteries. This method offers an alternative to the constrained nickel and cobalt resources typically employed in battery production. The synthesized manganese-based materials, boasting a distinct nanostructure, exhibit the requisite high stability and energy density crucial for Li-ion batteries. This innovation is vital for tackling resource constraints in battery production, curbing costs, and reducing reliance on scarce metals like nickel and cobalt, thereby, potentially meeting future energy demands.
- In October 2023, recycling lithium-ion batteries emerged as a crucial facet of India's burgeoning electric vehicle (EV) industry's environmental sustainability. BatX Energies, a company that specializes in reclaiming and recycling essential Earth metals from discarded lithium-ion cells, including lithium, cobalt, nickel, and manganese. These metals are indispensable for battery production. Through adopting a 'Hub and Spoke' strategy in collaboration with OEMs and channel partners, the company streamline the collection process and ensure compliance with regulations. Recycling aids in mitigating the environmental footprint and reducing dependency on imports for rare earth materials in lithium-ion cell manufacturing. Moreover, it creates job opportunities and nurtures skilled workforces in electronic waste management. The recycled materials are reintegrated into the supply chain and utilized across various industries, fostering a circular economy for lithium-ion battery manufacturing. BatX Energies plans to scale its operations globally, addressing similar challenges in other markets like South Africa, the U.S., and Europe.
- In September 2023, Ascend Elements, a sustainable battery materials manufacturer for electric vehicles, secured US$ 542 million in equity investments. The company is constructing North America's inaugural sustainable cathode precursor (pCAM) and cathode active material (CAM) manufacturing facility. This technology leverages used lithium-ion battery materials and gigafactory manufacturing scrap to produce sustainable materials, slashing carbon emissions by up to 93%. This investment will expedite the construction of the Apex 1 facility in Kentucky, capable of producing enough sustainable pCAM for 750,000 electric vehicles annually, thus aiding the global shift towards zero carbon emissions.
Market Players:
Key companies covered as a part of this study include CATL (Contemporary Amperex Technology Co Ltd), BYD Company Limited , Panasonic Corporation, LG Chem, Samsung SDI, SK Innovation, EVE Energy Co, Ltd, Tesla, AESC (Automotive Energy Supply Corporation), GS Yuasa Corporation, Coslight, Hitachi, Ltd, Johnson Controls International plc, Honeywell International Inc, Bosch Group, Varta AG, Pinnacle Electronics Inc, Microvast Holdings, Inc, Liontown Resources Limited, Freudenberg Group
