Overview
The electric vehicle battery market size is estimated at USD 43.68 billion in 2022, and is expected to reach USD 252.02 billion by 2033, growing at a CAGR of 21.50% during the forecast period (2022-2032).
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- Declining Lithium-Ion Battery Prices: The electric vehicle battery market is expected to be driven by declining lithium-ion battery prices, the growing demand for electric vehicles, and supportive government policies promoting their sales over the medium term.
- Demand-Supply Gap of Raw Materials: The electric vehicle battery market may need help due to a demand-supply mismatch for crucial raw materials throughout the projected period.
- Supportive Government Policies and Investment: Nevertheless, supportive government policies and investments in public charging infrastructure, combined with the increasing efficiency of electric vehicles, are anticipated to create significant growth opportunities for the market shortly.
- Asia-Pacific Growth: The Asia-Pacific region, particularly countries like China, India, Japan, and others, is expected to witness significant growth in the electric vehicle battery market due to increasing demand in these regions.
Electric Vehicle Battery Market Trends
Lithium-ion Battery Dominance in the Market
- Higher Energy Density: Lithium-ion batteries, installed in electric vehicles, offer higher energy density than nickel-cadmium and lead-acid batteries. This characteristic allows manufacturers to save space by reducing the battery pack size. Despite not containing lithium metal, these batteries utilize lithium ions.
- Growing Popularity: Lithium-ion batteries are gaining popularity over other types due to their favorable capacity-to-weight ratio. Factors such as better performance, longer lifespan, lower maintenance, environmental friendliness, and fast charging contribute to their increasing adoption. Although their price is typically higher, ongoing research and development activities drive price declines.
- Expansion Beyond Consumer Electronics: Traditionally used in consumer electronic devices like mobile phones and PCs, lithium-ion batteries are now being redesigned for hybrid and electric vehicles. Their low environmental impact, as EVs do not emit CO2 or other greenhouse gases, contributes to this shift.
- Industry Developments: SVOLT Energy Technology plans to establish Europe’s first lithium-ion cell factory in Saarlouis, Germany, with production slated to start by the end of 2023. Stellantis N.V. and Samsung SDI also announced the construction of an electric-vehicle lithium-ion battery manufacturing facility in Kokomo, Indiana, United States, with operations expected to commence in 2025.
- Safety Measures: Lithium-ion batteries are considered safer than other battery technologies, with manufacturers implementing stringent safety measures and standards to protect consumers in case of battery failure.
- Market Expansion: The emergence of new electric vehicle markets for personal and commercial applications is projected to drive global demand for lithium-ion batteries. Moreover, their advantages over other batteries, particularly in data centers, further enhance their appeal.
- Policy Impact: With the increasing adoption of electric vehicles, particularly in Europe and North America, spurred by initiatives like the European Union’s ‘Green Deal Policy,’ demand for lithium-ion batteries is expected to rise. This policy aims to reduce carbon emissions by over 50% by 2030, aligning with carbon neutrality goals by 2050.
- Rising EV Sales: Global electric vehicle sales reached 7.3 million units in 2022, up from 4.6 million in 2021. This upward trend in electric vehicle sales directly correlates with increased demand for lithium-ion batteries.
- Dominant Market Presence: Given the factors above, lithium-ion batteries are poised to dominate the market during the forecast period.
Electric Vehicle Battery Market Leaders
- Panasonic Corporation
- LG Energy Solution Ltd
- Contemporary Amperex Technology Co. Ltd
- Samsung SDI Co. Ltd
- BYD Co. Ltd
- Narada Power Source Co. Ltd
- East Penn Manufacturing Company
- GS Yuasa Corporation
- Clarios
- Hitachi Ltd
Electric Vehicle Battery Market News
- In February 2023, CATL and Ford announced a collaboration on a USD 3.5 billion electric vehicle battery plant in Michigan, USA. Ford will solely own the new CATL facility, which will accelerate battery development for Ford’s electric vehicles.
- In November 2022, Clarios’s Optima introduced a new lithium-powered sport battery line tailored for motorcycles, personal watercraft, snowmobiles, utility task vehicles (UTVs), and all-terrain vehicles (ATVs).
- August 2022 saw Honda Motor Company unveiling plans for a USD 4.4 billion lithium-ion battery plant in the United States. Teaming up with Korean battery supplier LG Energy Solution Ltd, the venture aims to produce approximately 40 GWh of batteries annually for Honda and Acura electric vehicles exclusively in North America.
Electric Vehicle Battery Industry Segmentation
- An electric vehicle battery (EVB) powers electric motors in battery electric vehicles (BEVs) or hybrid electric vehicles (HEVs).
- Unlike starting, lighting, and ignition (SLI) batteries, EV batteries are primarily lithium-ion batteries.
- Lithium-ion batteries are chosen for their high power-to-weight ratio and energy density.
- Smaller and lighter EV batteries contribute to reducing vehicle weight and enhancing performance.
Market Segmentation
By Battery Type
- Lead-Acid Battery
- Lithium-Ion Battery
- Other Battery Types
By Vehicle Type
- Battery Electric Vehicle (BEV)
- Plug-in Hybrid Electric Vehicle (PHEV)
- Hybrid Electric Vehicle (HEV)
By Geography
- North America
- United States
- Canada
- Rest of North America
- Europe
- Germany
- France
- United Kingdom
- Rest of Europe
- Asia-Pacific
- China
- India
- Japan
- South Korea
- Rest of Asia-Pacific
- Latin America
- Brazil
- Argentina
- Rest of South America
- Middle-East and Africa
- Saudi Arabia
- United Arab Emirates
- South Africa
- Rest of Middle-East and Africa
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