The lithium ion battery market is Estimated to Witness High Growth Owing to Growing Electrification Trend in the Automotive Industry & Rising Demand for Consumer Electronics with Longer Battery Life
The lithium ion battery market is estimated to be valued at USD 63.70 Bn in 2024, exhibiting a CAGR of 17.1% over the forecast period (2024-2031). Growing adoption of electric vehicles across the globe is a key factor driving the growth of the lithium ion battery market. Furthermore, the rising demand for portable consumer electronics such as smartphones and laptops with longer battery life is also fueling the market growth.
Growing Electrification Trend In the Automotive Industry
The automotive industry is undergoing a massive shift towards electrification with major automakers aggressively expanding their electric vehicle portfolio in response to stringent emission norms and government support for clean mobility. Lithium ion batteries are emerging as the technology of choice for electric vehicles due to their higher energy density and longer lifespan. This growing shift towards EVs is estimated to create huge demand for lithium ion batteries over the coming years.
Rising Demand For Consumer Electronics With Longer Battery Life
Advanced batteries with higher capacity and life are critical for consumer gadgets to support their ever-increasing functionalities and longer usage hours. Lithium ion battery technologies allow consumer electronics brands to manufacture slimmer and portable devices with longer usage on a single charge
Increased Demand for Portable Consumer Electronics is Driving the Lithium Ion Battery Market
The demand for portable consumer electronics such as smartphones, laptops, tablets, wearable devices, and power banks has increased dramatically in recent years. Lithium ion batteries are the preferred power source for most of these devices due to their high energy density, lack of memory effect, and slow loss of charge when not in use. As consumers upgrade their devices more frequently and the functionality of devices increases, requiring more power, the demand for higher capacity lithium ion batteries also rises. This growing market for portable electronics is a major driver propelling the lithium ion battery market forward.
Demand from the Electric Vehicle Sector is Also Fueling Market Growth
The global push towards more eco-friendly electric vehicles to reduce emissions is another key driver of the lithium ion battery market. Both automakers and governments offer purchase incentives to promote widespread adoption of EVs. As battery costs come down with technological advancements and economies of scale in production, EVs are becoming more affordable and viable for everyday use. Most EVs rely on lithium ion batteries to power the vehicle. As EV sales pick up, massive battery production is required to meet this emerging demand from the automotive industry, positively impacting the lithium ion battery production.
High Production Costs Pose a Challenge
While lithium ion batteries offer superior performance compared to other chemistries, high manufacturing costs remain a restraint. Lithium ion cells require costly, state-of-the-art production facilities and precision manufacturing processes. Sourcing high purity raw materials like lithium, cobalt and graphite also drives up costs. Attempts to mass produce lithium ion batteries on a global scale to meet rising demand face challenges related to heavy capital expenditure requirements. High battery costs deter widespread adoption of EVs especially. Continuous R&D is needed to develop cheaper and more scalable production technologies.
Dependence on Imports of Raw Materials Can Impact Supply
Most lithium ion battery manufacturers depend on imports to source key raw materials like lithium, cobalt and natural graphite. Geopolitical factors or supply disruptions regarding these commodities shipped from other countries introduce uncertainties. For example, over 50% of the world’s lithium reserves are located in China, Argentina, and Chile. Any export restrictions or trade actions involving these nations directly affect global battery material availability and costs. Ensuring diversified, ethical supply chains of raw materials is a challenge that could potentially impact the smooth growth of the lithium ion battery market.
Declining Battery Prices Will Boost Electric Vehicle Sales
As lithium ion battery costs reduce due to technological innovations, adoption of EVs becomes more widespread and affordable. Many projections estimate that battery pack costs could drop below $100/kWh within this decade, achieving parity with internal combustion engines. This price decline will make owning an EV comparable or possibly cheaper than paying for gasoline during the vehicle’s lifetime. Lower battery costs improve the business case for commercial fleets to switch to EVs as well. The lithium ion battery industry will benefit greatly from the booming electric mobility sector as declining prices stimulate higher demand.
Energy Storage Will Create New Revenue Opportunities
Large-scale energy storage systems based on lithium ion batteries are gaining prominence alongside renewable energy sources like solar and wind power. As the share of intermittent renewable energy on the grid increases, battery-based storage plays a crucial role in absorbing excess power and discharging it during periods of low generation. Both utility companies and homeowners are incorporating lithium ion batteries into microgrid and home energy storage solutions. This emerging application area represents a huge new market that battery manufacturers can tap into. With the right investments in stationary storage R&D, more revenue opportunities will arise.
Link: https://www.coherentmarketinsights.com/market-insight/lithium-ion-battery-market-284
Key Developments
- In June 2024, Ola Electric Mobility (Ola Electric), a leading Indian electric vehicle (EV) manufacturer, announced the launch of India's first indigenously developed lithium-ion cell (NMC 2170). This milestone achievement marks a significant step forward in India's journey towards self-reliance in the EV battery manufacturing sector.
- In 2023, Toshiba Corporation, a leading technology company, announced the development of a new lithium-ion battery with a cobalt-free 5V-class cathode material.
- In 2023, Contemporary Amperex Technology Co., Limited (CATL), a leading global battery manufacturer, announced the launch of a new condensed battery with an energy density of up to 500 Wh/kg. This groundbreaking achievement has the potential to enable the electrification of passenger aircraft and revolutionize the energy storage industry.
- In 2023, Amara Raja, a leading Indian conglomerate with interests in power and energy storage solutions, announced the launch of a new gigafactory in Telangana, India, dedicated to the production of lithium-ion batteries. This strategic move positions Amara Raja as a key player in the rapidly growing Indian electric vehicle (EV) and energy storage markets.
Key Players
Sony, LLC, Automotive Energy Supply Corporation (AESC), China BAK Battery, Inc, GS Yuasa Corporation, Hitachi Chemical Co. Ltd., Johnson Controls, Inc., LG Chem Power, Inc., Panasonic Corporation, Samsung SDI Co. Ltd., Toshiba Corporation, BYD Co., Ltd., A123 Systems LLC, GS Yuasa International Ltd., Karacus Energy , Hioki, Battrixx , Exide Industries, Amara Raja Batteries, Bharat Power Solutions., and Amptek Batteries
