Future of Batteries Market by Type (Li-ion, Na-ion, Solid state, Li- Air), Vehicle Type (Passenger Cars, Commercial Vehicles, Off-Road Vehicles), Battery Form (Prismatic, Pouch, Cylindrical), Packaging (CTM, CTP, CTC, MTC) & Region - Global Forecast 2035
[209 Pages Report] The global future of batteries market is projected to grow from 16 million units in 2024 to 62 million units by 2035, at a CAGR of 12.7%. The growing consciousness among consumers regarding environmental issues and their preference for eco-friendly modes of transportation is propelling the demand for electric vehicles. Increased driving range, quicker charging times, and longer battery life impact consumer choices. Furthermore, improvements in lithium-ion, solid-state, and other developing battery technologies have increased EVs' efficiency, range, and affordability. Well-known automakers have committed to converting their fleets to electric vehicles and are making significant investments in electric car technologies. This dedication to EVs drives market expansion and battery development.
To know about the assumptions considered for the study download the pdf brochure
To know about the assumptions considered for the study, download the pdf brochure
Market Dynamics:
Driver: Advancements in battery technology
A number of companies have achieved significant advancements in EV battery technology, enabling EVs to become a competitive alternative to traditional automobiles. Continuous advancements in electric vehicle (EV) battery technology aim to increase the range of EVs. Most large EV battery manufacturers innovate in battery chemistry and design to increase EV range and reduce the need for frequent charging. The battery's cathode chemistry is a major factor in its performance. Three major groups of cathode chemistries are currently in widespread use in the automobile industry: lithium nickel manganese cobalt oxide (NMC), lithium nickel cobalt aluminum oxide (NCA), and lithium iron phosphate (LFP). Because of their higher nickel content, NMC and NCA cathodes are in the most demand out of all of them. They provide high energy density. In addition, since 2020, LFP has gained popularity because of its nickel- and cobalt-free composition and the high cost of battery metals. Unlike hydroxide, which is used for nickel-rich chemistries, LFP uses lithium carbonate.
The comeback can be attributed to LFP's cost benefits in a market with rising commodity prices. With several EV models, cell-to-pack (CTP) technology is being used more frequently. It does away with the module requirement to house cells in the battery pack. Additionally, CTP lowers the dead weight in the pack and raises the LFP batteries' energy density. One of EV battery technology's most exciting developments is the creation of solid-state batteries. These batteries are longer-lasting, safer, and more efficient since they use solid electrolytes instead of liquid or gel-based electrolytes. In addition, solid-state batteries can store more energy in the same area as conventional batteries because of their higher energy density. Toyota and BMW are investing extensively in solid-state battery technology, and some companies, such as QuantumScape and Solid Power, are already making progress in this field.
Restraint: Procurement concerns related to raw materials
EV batteries comprise many components/raw materials, and their procurement can be a restraining factor. Cobalt is one of the vital raw materials used to manufacture EV batteries, followed by lithium and nickel. The procurement of these materials can pose restraints to the safety of those extracting them. Some raw materials used in EV batteries, like cobalt, are associated with environmental and ethical concerns regarding their extraction. Ensuring responsible sourcing practices can be challenging and may limit procurement options. Moreover, The prices of raw materials for EV batteries can be volatile due to factors such as supply-demand dynamics, geopolitical tensions, and market speculation. Fluctuating costs can impact procurement budgets and long-term planning.
Opportunity: Increase in R&D efforts toward creating more advanced battery chemistries
As the world moves toward adopting clean energy, battery manufacturers are increasing their R&D efforts to develop different battery chemistries. For instance, major players like Amprius Inc. (US) and Nexeon Corporation (UK) are developing silicon anode batteries with enhanced features. These advanced silicon anode batteries are expected to be widely adopted in the coming years. Tesla, Inc. (US) and Panasonic Holdings Corporation (Japan) are also researching and developing silicon anode and lithium-air batteries to power EVs. In June 2023, LG Energy Solution (South Korea) and NOVONIX (Australia) entered into a Joint Research and Development Agreement (JDA) to collaborate on the development of artificial graphite anode material for lithium-ion batteries. VARTA AG (Germany) is also involved in international research projects. Its R&D project, SintBat, aims to develop energy-efficient, cheap, and maintenance-free lithium-ion-based energy storage systems using silicon-based materials and new processing technologies.
As the market for eco-friendly vehicles grows, many manufacturers focus on developing reliable batteries for hybrid and plug-in hybrid EVs, resulting in significant investment in R&D. A growing number of R&D initiatives are expected to offer growth opportunities for EV battery manufacturers during the forecast period.
Challenge: Low availability of lithium for use in EV batteries
Lithium and lithium-ion batteries are experiencing major shortages with the growth in EV demand. The world only produces around 80,000 tons of lithium globally. While top EV manufacturers are planning to find other alternatives and reduce the use of lithium, a viable similar cost option is yet to be found. This will lead to a surge in lithium prices in a couple of years. OEMs are also developing solid-state battery technology, which will use less lithium and provide a longer range per EV charge. This is a major challenge to the growth of the EV market, especially in countries like Denmark, Singapore, and the Netherlands which do not have lithium deposits.
While the demand for lithium will keep increasing with EV demand, a shortage of lithium is expected by 2025. The demand will outgrow supply by 2026, which is expected to increase lithium costs due to insufficient supplies, thus increasing the cost of EVs post-2026. This is one of the reasons many countries are looking for alternate sources besides EVs to reduce the environmental impact of vehicle emissions. In February 2023, the Geological Survey of India (GSI) discovered 5.9 million tonnes of lithium deposits in the Reasi district of Jammu and Kashmir. In May 2023, the GSI found another lithium reserve in Degana, Rajasthan's Nagaur district, India. Such developments can help mitigate the challenges.
Market Ecosystem
Lithium-ion battery holds the largest market during the forecast period.
Lithium-ion batteries hold the most market share in the future of batteries market. The creation and refinement of lithium-ion battery technology occurred several decades ago. EV manufacturers use this well-established technology since it has undergone extensive research and has produced very high levels of safety and dependability. The goal of ongoing research and development is to advance the technology of lithium-ion batteries. Incremental improvements in energy density, lifetime, charging speed, and safety features have solidified EV batteries' leadership in the market. In addition, one of the main factors influencing their demand is their declining cost. In June 2023, Toyota announced that it aims to launch next-generation lithium-ion batteries in 2026, offering longer ranges and quicker charging. The Hyundai IONIQ 6, Nissan Ariva, Genesis GV60, Cadlillac Lyriq Toyota Bz4x, and Chevrolet Silverado EV are popular EVs with lithium-ion batteries launched in 2023.
Passenger car segment dominate future of batteries market during the forecast period.
The passenger car segment is witnessing a significant shift towards electric vehicles (EVs) as governments worldwide enforce stricter emissions regulations and consumers seek more sustainable transportation options. As EVs rely entirely on batteries for power, the demand for batteries is expected to soar. Moreover, advancements in battery technology, such as improved energy density, faster charging capabilities, and longer lifespan, make EVs more attractive to consumers. These advancements are driving increased adoption of EVs in the passenger car segment, further boosting the demand for batteries.
Additionally, Intense competition among automakers to capture market share in the growing EV segment is fueling innovation and driving down costs. Automakers invest heavily in research and development to improve battery technology and develop new EV models, further stimulating demand for batteries in the passenger car segment.
Europe hold the prominent market share for EV batteries during the forecast period.
Europe is home to Renault, Audi, BMW, and Mercedes manufacturers. The region has set a very ambitious goal of reducing 80% CO2 emissions by 2030-2035 and has created a roadmap for the same. The governments of various countries in Europe are subsidizing EV infrastructure. The presence of OEMs such as VDL Grop (Netherlands) and AB Volvo (Sweden) offers opportunities for the growth of the future of batteries market in the region. The increasingly stringent regulations related to environmental issues are propelling market players to test and develop advanced vehicles, which will further boost the market for advanced battery technologies.
Moreover, European countries have been investing heavily in charging infrastructure, alleviating range anxiety and encouraging consumers to adopt electric vehicles. This infrastructure development complements the growth of the future of batteries market. Europe also has a strong tradition of research and innovation, particularly in advanced materials and energy storage technologies. This expertise contributes to the development of high-performance EV batteries, further solidifying Europe's position in the market.
Additionally, Europe has a well-established automotive industry with companies like Volkswagen, BMW, and Renault investing heavily in electric vehicle technology. This investment extends to battery research, development, and manufacturing.
Key Market Players
The future of batteries market is dominated by established players such as CATL (China), LG Energy Solution Ltd. (South Korea), BYD Company Ltd. (China), Panasonic Holdings Corporation (Japan), and SK Innovation Co., Ltd. (South Korea). These companies manufacture battery and develop new technologies. These companies have set up R&D facilities and offer best-in-class products to their customers.
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|
Report Metric |
Details |
|
Market size available for years |
2019–2035 |
|
Base year considered |
2023 |
|
Forecast period |
2024-2035 |
|
Forecast units |
Volume (Thousand Units) |
|
Segments Covered |
Battery type, Battery Form, Vehicle type, battery packaging form and Region |
|
Geographies covered |
China, US, Europe, Asia Pacific (excl. China), and Rest of the World |
|
Companies Covered |
CATL (China), LG Energy Solution Ltd. (South Korea), BYD Company Ltd. (China), Panasonic Holdings Corporation (Japan), and SK Innovation Co., Ltd. (South Korea) |
This research report categorizes the future of batteries market based on Battery type, Battery Form, Vehicle type, battery packaging form and Region.
Based on Battery Type:
- Lithium-Ion
- Sodium-Ion
- Solid-State
- Lithium-Air
Based on Battery Form:
- Prismatic
- Pouch
- Cylindrical
Based on Vehicle Type:
- Passenger Cars
- Commerical Vehicles
- Off-Road Vehicles
Based on Packaging Form:
- Cell to Module
- Cell to Pack
- Cell to Chassis/Vehicle
- Module to Chassis
Based on the region:
- China
- US
-
Europe
- France
- Germany
- Spain
- Italy
- The UK
- Sweden
- Norway
- Denmark
-
Asia Pacific (excl. China)
- India
- Japan
- Thailand
- South Korea
-
Rest of the World
- UAE
- Egypt
- South Africa
Recent Developments
- In March 2024, Subaru Corporation and Panasonic Energy Co., Ltd., a subsidiary of Panasonic Holding Corporation, announced a partnership to supply cylindrical lithium-ion batteries to Subaru's BEVs. The partnership will help the companies contribute to the development of the automotive and battery industries, as well as help solve social issues like maintaining employment and developing human resources.
- In March 2024, StoreDot, a developer of extreme fast charging (XFC) battery technology for EVs, announced a collaborative partnership with EVE Energy. The partnership gives StoreDot access to EVE Energy’s extensive manufacturing footprint and the ability to mass produce its 100 in 5 extreme fast-charging battery cells.
- In February 2024, LG Energy Solution signed an offtake agreement with Wesfarmers Chemicals, Energy, and Fertilisers for lithium concentrate, advancing the companies’ pre-existing partnership to deliver efficient and sustainable power solutions to the North American market.
- In January 2024, Jianghuai Automobile Group and CATL signed a strategic cooperation agreement in Ningde, Fujian Province. According to the agreement, both companies will actively cooperate in the supply of EV batteries, introduction of battery swapping technology, joint development and application of new technologies and products, market expansion at home and abroad, and carbon emission reduction across the industry chain, as well as work together to formulate an action plan and build a strategic alliance.
- In January 2024, SK On, a subsidiary of SK Innovation Co., Ltd., partnered with Solid Power, a US-based leading developer of solid-state battery technology, to accelerate the development of all-solid-state batteries (ASSBs).
Frequently Asked Questions (FAQ):
What is the current size of the future of batteries market by volume?
The current size of the future of batteries market is estimated at 16 million units in 2024.
Who are the winners in the future of batteries market?
The future of batteries market is dominated by established players such as CATL (China), LG Energy Solution Ltd. (South Korea), BYD Company Ltd. (China), Panasonic Holdings Corporation (Japan), and SK Innovation Co., Ltd. (South Korea) and others. These companies manufacture batteries and develop new technologies. These companies have set up R&D facilities and offer best-in-class products to their customers.
Which region will have the fastest-growing market for future of batteries market?
Europe will be the fastest-growing future of batteries market region as Europe is aiming for self-sufficiency in battery production to reduce reliance on Asian imports and address supply chain vulnerabilities. This involves building numerous gigafactories across the continent, creating jobs, strengthening the economy, and shortening supply chains.
What are the new market trends impacting the growth of the future of batteries market?
The key trends impacting the growth of the future of batteries market are transition to solid-state batteries, reduced cost per kilowatt-hour, increased energy density, and diversification of battery chemistries.
What countries are covered in Europe for the future of batteries market?
The countries covered in report for the future of batteries market are Germany, France, UK, Spain, Italy, Norway, Sweden and Denmark. .
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This research study involved the extensive use of secondary sources, such as company annual reports/presentations, industry association publications, automotive magazine articles, directories, technical handbooks, the World Economic Outlook, trade websites, technical articles, and databases, to identify and collect information on the future of batteries market. In-depth interviews were conducted with various primary respondents, including key industry participants, subject-matter experts (SMEs), C-level executives of key market players (EV battery and EV battery component manufacturers), and industry consultants, among other experts, to obtain and verify critical qualitative and quantitative information and assess market prospects.
Secondary Research
In the secondary research process, various secondary sources were used to identify and collect information for this study. The secondary sources include annual reports, press releases, and investor presentations of companies; whitepapers, certified publications; articles from recognized authors, directories, and databases; and articles from recognized associations and government publishing sources. Secondary research has been used to obtain key information about the industry’s value chain, the overall pool of key players, market classification and segmentation according to industry trends to the bottom-most level, regional markets, and key developments from the market- and technology-oriented perspectives.
Primary Research
Extensive primary research was conducted after acquiring an understanding of the global future of batteries market scenarios through secondary research. Several primary interviews were conducted with market experts from both the demand (country-level government associations, trade associations, institutes, R&D centers, and OEMs/vehicle manufacturers) and supply (EV battery manufacturers, EV component manufacturers, and raw material suppliers) sides across four major regions, namely, China, US, Europe, Asia Pacific (excl. China), and Rest of the World. 23% of the experts involved in primary interviews were from the demand side, and 77% were from the supply side of the industry. Primary data was collected through questionnaires, emails, and telephonic interviews. Several primary interviews were conducted from various departments within organizations, such as sales, operations, administration, and so on, to provide a holistic viewpoint in the report.
After interacting with industry participants, some brief sessions were conducted with experienced independent consultants to reinforce the findings from the primary interviews. This, along with the in-house subject matter experts’ opinions, led to the findings delineated in the rest of this report.
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
The bottom-up approach was used to estimate and validate the total market size. This method was also used extensively to estimate the size of various subsegments in the market. The research methodology used to estimate the market size includes the following:
- The key players in the industry and markets have been identified through extensive secondary research
- The industry’s supply chain and market size, in terms of volume, have been determined through primary and secondary research processes.
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
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Data Triangulation
After arriving at the overall market size—using the market size estimation processes as explained above—the market was split into several segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics of each market segment and subsegment, data triangulation and market breakdown procedures were employed, wherever applicable. The data was triangulated by studying various factors and trends from both the demand and supply sides.
Market Definition
According to the Batteries Directive 2006/66/EC, batteries are defined as any source of electrical energy generated by direct conversion of chemical energy and consisting of one or more primary battery cells (non-rechargeable) or one or more secondary battery cells (rechargeable). An EV battery is a rechargeable battery used to power BEVs), PHEVs, and HEVs. An EV battery usually comprises numerous small, individual cells arranged in series or parallel to achieve the desired voltage and capacity.
List of Key Stakeholders
- Automotive OEMs
- Automobile Manufacturers
- Battery-related Service Providers
- EV Battery Casing Manufacturers
- EV Component Manufacturers
- EV Battery Manufacturing Organizations
- EV Battery Cell Manufacturing Organizations
- EV Battery Pack Manufacturing Organizations
- EV Battery Raw Material Miners and Suppliers
- EV Battery Raw Material Refinery Companies
- EV Infrastructure Component Manufacturers
- EV Infrastructure Developers
- EV Manufacturers
- Government Bodies (who directly and indirectly provide incentives, aid, and orders to EV manufacturers)
- Electric Vehicle Manufacturers
- Regulatory Bodies
- Electric Vehicle Traders and Distributors
- EV Battery Component Traders, Distributors, and Suppliers
Report Objectives
- To define and describe the future of batteries (FoB) market based on battery technology, battery packaging format, and battery form
- To analyze and forecast the electrified automotive market, in terms of volume (thousand units), based on vehicle type (passenger cars, commercial vehicles, and off-road vehicles) and region [China, US, Europe, Asia Pacific (excl. China), and Rest of the World]
- To analyze the current state and future of battery technology (lithium-ion, sodium-ion, solid-state, and lithium-air)
- To analyze the current state and future battery packaging format (cell-to-module, cell-to-pack, cell-to-chassis, and module-to-chassis)
- To analyze the current state and future battery form (prismatic, pouch, and cylindrical)
- To analyze the battery demand in terms of GWh for the projected period by vehicle type (passenger cars, commercial vehicles, and off-road vehicles)
- To forecast the size of market segments with respect to key regions, namely China, the US, Europe, Asia Pacific, excluding China, and the Rest of the World
- To strategically analyze segments with respect to individual growth trends, prospects, and contributions to the total market
- To analyze the opportunities offered by various segments of the market to its stakeholders
- To analyze and forecast trends and orientation for the market in the global industry
- To strategically profile key players and comprehensively analyze their market share and core competencies
- To track and analyze competitive developments, such as product launches/developments, deals, and others, in the market
Available Customizations
With the given market data, MarketsandMarkets offers customizations in accordance with company-specific needs.
Additional Company Profile
- Future of batteries market, by propulsion type at the country level
- Future of batteries market, by propulsion type at the vehicle type level
Growth opportunities and latent adjacency in Future of Batteries Market