Lithium-ion Battery Materials Market

Lithium-ion Battery Materials Market

The global lithium-ion battery materials market is valued at USD 41.9 billion in 2024 and is projected to reach USD 120.9 billion by 2029, growing at 23.6% cagr from 2024 to 2029. Market growth can be attributed to several major factors including the rise in demand for environmentally friendly as well as efficient energy storage solutions for multiple applications. Lithium-ion batteries are the preferred solutions for electric vehicles, renewable energy storage equipment, and portable electronic devices like laptops and smartphones. This is due to characteristics like long cycle life, lightweight structure, and high energy density. The lithium-ion battery materials market is segmented into different battery chemistries including lithium iron phosphate, lithium cobalt oxide, lithium nickel manganese cobalt, lithium manganese oxide, and lithium nickel cobalt aluminum oxide. The market is also expected to grow as a result of the increasing government emphasis on promoting electric vehicles and renewable energy integration.

Attractive Opportunities in the Lithium-Ion Battery Materials Market

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Lithium-ion Battery Materials Market Dynamics:

Driver: Surge in demand for consumer electronics

Lithium-ion batteries are used in various consumer electronic devices such as smartphones, laptops, fitness bands, smart watches, Bluetooth headsets, gardening tools, and UPS equipment. The compact batteries offer huge energy capacity, and can be shaped to fit easily into the devices to be powered. Developments in smart devices and consumer electronics, such as wider screens, HD-quality graphics, higher resolution ratios, use of graphic processing units (GPUs), complex applications, and enhanced user experience, are increasing the amount of energy consumed by them. Lithium-ion batteries are the most capable source of power for these products, which are seeing increasing demand world over. The rising demand for lithium-ion batteries has in turn boosted the market for lithium-ion battery materials.

Restraints: Availability of substitutes

Substitutes for lithium-ion batteries, including hydrogen fuel cells and sodium-ion batteries, are emerging as alternative energy storage solutions for various applications. Hydrogen fuel cells are electrochemical devices that convert hydrogen and oxygen into electricity and water, offering high energy density and zero emissions. They are ideally suited to applications requiring long-lasting power, such as electric vehicles and industrial machinery; their fast-refueling times and durability also make them attractive. However, the lack of hydrogen infrastructure, and high production and maintenance costs can prove to be a deterrent. Other substitutes are available, such as sodium-ion batteries, which use sodium ions as charge carriers, capitalizing on the abundance and low cost of sodium. The choice of battery depends upon specific requirements, with hydrogen fuel cells being ideal for high-energy, long-range applications, and sodium-ion batteries performing more suited to less demanding energy storage needs.

Opportunity: Decline in overall prices

A lithium-ion battery consists of many components; the primary component of any lithium-ion battery is the cell, which accounts for almost 50% of its cost, while electronics, assembly, and packaging account for the rest. Developments such as large-scale manufacturing, the declining price of components, and the adoption of advanced technologies to boost battery capacity are leading to a reduction in the price of lithium-ion batteries. Batteries typically account for 30% to 40% of the value of an electric vehicle; reuced prices would benefit the production of affordable BEVs for the mass market. A fall in prices would also encourage the adoption of these batteries across various new applications, thus boosting the demand for lithium-ion battery materials globally.

Challenge: Fluctuating raw material prices

The cost of raw materials, such as lithium, used to produce lithium-ion batteries can fluctuate significantly due to supply and demand imbalances, geopolitical tensions, or natural disasters. This can affect the demand for lithium-ion battery materials and impact the profitability of lithium-ion battery manufacturers. A shortage in supply or an increase in demand can lead to higher prices, while an oversupply or reduced demand can result in lower prices. Geopolitical events such as trade wars and tariffs can also impact the prices of raw materials. For example, the war between Russia and Ukraine led to supply chain disruptions across various sectors in different countries. Any fluctuations in the prices of raw materials can significantly impact the cost of the product.

Lithium-Ion Battery Materials Market : Ecosystem

Prominent companies in this market include well-established, and financially stable manufacturers of lithium-ion battery materials. These companies have been operating in the market for several years and possess a diversified product portfolio and strong global sales and marketing networks. Major players in this market include Umicore (Belgium), Sumitomo Metal Mining Co., Ltd. (Japan), BASF SE (Germany), POSCO Future M (South Korea), and Tanaka Chemical Corporation (Japan).

The electric vehicles segment of the lithium-ion battery materials market, by application, is estimated to account for the highest CAGR during the forecast period.

The electric vehicles segment of the global lithium-ion battery materials market, by application, is estimated to be the fastest-growing during the forecast period. Lithium-ion batteries can store a lot of energy in a small and lightweight package and can be easily charged and discharged multiple times. This combination of features makes them ideal for electric vehicles; the rising demand for EVs is thus leading to an increase in demand for lithium-ion battery materials. The adoption of electric vehicles (EVs) is further driven by supportive government policies including those providing incentives for buying electric vehicles (EVs), and others setting strict emission limits. The demand for materials like lithium, nickel, cobalt, and iron increases with the growing production of electric vehicles, which in turn drives the market for lithium-ion battery materials.

The lithium nickel manganese cobalt segment of the lithium-ion battery materials market, by battery chemistry, is estimated to account for the highest CAGR during the forecast period.

The lithium nickel manganese cobalt segment is estimated to be the fastest-growing segment of the global lithium-ion battery material market during the forecast period. This battery chemistry offers high energy density, power density, cost-effectiveness, and safety. Batteries made of these materials are ideal for a wide range of applications, including electric vehicles, portable electronics, power tools, and energy storage systems. The demand for these batteries is expected to rise significantly in the coming years, driven by the growth of the electric vehicle market and the increasing adoption of renewable energy.

The electrolyte materials segment of the lithium-ion battery materials market, by material, is estimated to account for the highest CAGR during the forecast period.

The electrolyte materials segment of the lithium-ion battery materials market is expected to record the highest CAGR. Electrolytes facilitate the movement of lithium-ions between cathode and anode, thus promoting the ability of batteries to store and release energy more efficiently. The demand for efficient electrolytes is expected to grow in tandem with the rising demand for electric vehicles and energy storage systems. The requirement for better battery performance, including enhanced energy density and safety, is further contributing to the development of improved electrolyte solutions. These factors collectively position electrolyte materials as key drivers of the lithium-ion battery materials market.

The Asia Pacific region is estimated to account for the highest CAGR in the lithium-ion battery materials market during the forecast period.

In the lithium-ion battery materials market, Asia Pacific is anticipated to have the highest compound annual growth rate (CAGR). The region has been witnessing high growth in the lithium-ion battery materials market and is projected to account for the largest market size from 2024 to 2029; this can be attributed to an amalgamation of factors that include government initiatives promoting electric vehicle (EVs) adoption, rapid industrialization, and growing investments in the infrastructure required for the production of batteries. China, South Korea, and Japan are leading in terms of electric vehicle (EVs) adoption. Government measures including the provision of subsidies for buying electric vehicles, and setting of stringent emission limits further promote the adoption of electric vehicles, and this in turn drives the market for lithium-ion battery materials.

Source: Secondary Research, Interviews with Experts, and MarketsandMarkets Analysis

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Lithium-ion Battery Materials Market Players

Major companies in the lithium-ion battery materials market include Umicore (Belgium), Sumitomo Metal Mining Co., Ltd. (Japan), BASF SE (Germany), POSCO Future M (South Korea), and Tanaka Chemical Corporation (Japan). A total of 20 major players have been covered, including startups such as EcoPro BM, Capchem, Nichia Corporation, Ascend Elements, Inc., and Pulead Technology Industry Co., Ltd. These players have adopted agreements, joint ventures, partnerships, and expansions as the major strategies to consolidate their position in the market.

Lithium-ion Battery Materials Market Scope

This research report categorizes the lithium-ion battery materials market based on Application, Battery Chemistry, Material, and Region.

Based on Application , the lithium-ion battery materials market has been segmented as follows:

• Portable Devices
• Electric Vehicles
• Industrial
• Other Applications

Based on Battery Chemistry, the lithium-ion battery materials market has been segmented as follows:

• Lithium Iron Phosphate
• Lithium Cobalt Oxide
• Lithium Nickel Manganese Cobalt
• Lithium Manganese Oxide
• Lithium Nickel Cobalt Aluminum Oxide

Based on Material, the lithium-ion battery materials market has been segmented as follows:

• Anode Materials
• Cathode Materials
• Electrolyte Materials
• Other Materials

Based on Region, the lithium-ion battery materials market has been segmented as follows:

• Asia Pacific
• Europe
• North America
• Rest of World

Recent Developments

• In October 2023, Umicore and AESC signed a ten-year agreement for Umicore to supply high-nickel battery materials for EV production at AESC’s US facilities. The agreement supports AESC's regional growth and secures Umicore’s access to the North American EV battery market. Running from 2026 to 2035, the agreement also underscores Umicore’s commitment to building a carbon-neutral battery materials plant in Ontario, Canada, and highlights its leadership in developing high-performance cathode materials for next-generation batteries.
• In September 2023, BASF SE partnered with Nanotech Energy to produce lithium-ion batteries in North America with locally recycled content and a low CO2 footprint. The agreement will enable BASF SE to provide cathode active materials produced with recycled metals on a commercial scale in North America, with support from American Battery Technology Company.
• In June 2023, POSCO Future M and General Motors expanded their Ultium CAM joint venture in North America by increasing Cathode Active Material (CAM) production and adding Precursor CAM (pCAM) capacity; completion is expected by 2026.

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