Electric Vehicle Batteries Market

Global Electric Vehicle Battery Market Size (2024 to 2029)

The Global Electric Vehicle Battery market is expected to grow from USD 94.54 billion in 2024 to USD 130.14 billion in 2029, with a CAGR of 6.6% between 2024 and 2029. 

With improved policy incentives, battery technology, and growing consumer interest in reducing vehicle carbon footprint, the share of electric vehicles (EVs) in the passenger car industry has improved over the past few years. The key determinants for increasing the driving range per recharge and decreasing the value of EVs are majorly propelling the demand of the market. To store more energy and to form them lighter and smaller, new cell chemistries are being developed for these batteries, which might enable EVs to compete with the standard vehicles. New cell chemistries are developed to store more energy making electric vehicles compete with standard vehicles.

MARKET TRENDS

Lithium-nickel-manganese-cobalt-oxide (NMC) is a highly used component in Electric vehicles. Additionally, lithium-nickel-cobalt-aluminum oxide (NCA) is employed in popular Electrical vehicles within the U.S. (Tesla Model 3, S, and X). For example, the adoption of lithium-nickel-manganese-cobalt-aluminum oxide (NMCA) composition is anticipated to begin in the next three years. They provide an extended life cycle and higher energy density, as compared to the equivalent NCA and NMC materials. Hence, the development of advanced battery chemistry could be a positive trend influencing the electric vehicle battery market growth.

MARKET DRIVERS

Currently, lithium-ion batteries are used as the first source of power for EVs. Additionally, the battery costs per kilowatt-hour (kWh) have fallen to less than 200 USD in 2019 from around 1000 USD in 2010. Moreover, due to the advancement of battery pack manufacturing techniques and cell chemistry, battery costs are likely to decrease below 100 USD/kWh by the top of the forecast period. Hence, a decrease in the prices of battery packs which are liable for around 35% to 45% of Electric vehicle manufacturing costs, is expected to drive the expansion of the electric vehicle batteries market. Also, the growing awareness of climate change to implement stringent fuel economy regulations is likely to fuel the demand of the market. Hence, vehicular emission concerns are expected to propel the adoption of EVs, which might increase the expansion of the market for electric vehicle batteries.

MARKET RESTRAINTS

Several minerals are necessary to store and utilize electricity as fuel like cobalt, manganese nickel, graphite, and rare-earth elements like neodymium the supplies are geographically concentrated, and substitutes are non-existent or limited. The lack of shortage infrastructure in countries like India is a restraining factor for the market. Additionally, the price of installation is high, and the cost-efficiency for consumers to charge their vehicles is also not at the specified level.

MARKET OPPORTUNITIES

The launch of various new techniques like battery swapping and battery-as-a-service (BaaS), which allow users to change EV batteries once discharged is set to create growth opportunities for the electric vehicle batteries market. This protects users from the time spent on recharging the batteries, thereby improving customer satisfaction and addressing one of the main reasons consumers refrain from choosing EVs. The BaaS model enables EV owners to rent battery services monthly rather than buying a battery with the EV. The model has two major advantages: consumers can save cash on battery costs, and they don't need to worry about battery depreciation. Such models benefit both consumers and makers, as makers can accurately predict the market size and potential by docking with industries providing battery-as-a-service (BaaS) models.

Impact of COVID-19 on the global Electric Vehicle Battery Market

The outbreak of COVID-19 has resulted in a very severe supply shortage of lithium for automakers like PSA Group, Ford, and Fiat Chrysler, among others which operate their production plants within the Hubei province, the initial epicenter of the virus. The pandemic-induced lockdown is anticipated to cut back lithium-ion battery production output by 26 gigawatt-hours in China and has compounded the dependence of automakers on Asian battery manufacturers. Furthermore, the value of lithium hydroxide utilized in electric vehicles has increased, which is attributed to the logistical difficulties and greater production costs caused by the outbreak. Previously, several European original equipment manufacturers (OEMs) wanted to focus only on packaging and research & development activities. However, this coronavirus has caused a severe bottleneck for electric vehicle battery supply within the automotive industry. Similarly, Daimler and Jaguar Land Rover, because of the unavailability of key elements like cobalt and lithium, have paused production of the Mercedes EQC and I-Pace electric SUV, respectively. It has impacted the profitability of those automakers. Hence, efforts to diversify the availability chain for crucial elements like lithium are expected to increase as a result of the coronavirus pandemic, and a brief to a mid-term supply shortage for such elements will end in the reduced production of EVs over the subsequent two years.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Electric Vehicle Battery Market By Battery Type

The lithium-ion segment held the biggest share of the market in 2023. Hence, the lithium-ion segment is predicted to dominate the global market of electric vehicle batteries over the forecast period.

Global Electric Vehicle Battery Market By Vehicle Type

The BEV segment is estimated to exhibit a better CAGR as compared to the HEV segment. The government agencies' stringent fuel economy regulations and implementing quota systems, particularly within developing economies, are likely to propel the adoption of BEV, which completely depends on rechargeable battery packs. The HEV segment held the biggest electric vehicle battery market share in 2023. HEVs use electric drive technology to deliver reduced fuel consumption and remove the dependence on charging stations. Hence, these factors, including their lower costs, as compared to BEV, are anticipated to improve to the dominance of this segment over others in the given forecast period.

REGIONAL ANALYSIS

North America dominated the world market of batteries for the Electric Vehicle Charging Stations Market in 2023, and it is expected to continue its dominance during the forecast period.

This can be largely due to rising investments in the development of charging station infrastructure in the region. The Batteries for Electric Vehicle Charging Stations Market in the Asia Pacific is predicted to expand at a high CAGR during the forecast period because of the rise in the demand for electric vehicles in China, India, and Japan. China is the leading market, with the greatest number of electrical vehicles sold in the region in 2023, which was around 1.77 million units. China is leading with the highest shares of the market as this region held the highest sales of electric vehicles in 2023.

KEY PLAYERS IN THE GLOBAL ELECTRIC VEHICLE BATTERY MARKET

CATL (China), Panasonic (Japan), LG Chem (South Korea), BYD (China), Samsung SDI (South Korea), Amara Raja (India), NIO (China), FORD (US), QuantumSpace Corp (US), Plug Power (US) are some of the notable companies in the global Electric Vehicle Battery market.

DETAILED SEGMENTATION OF THE GLOBAL ELECTRIC VEHICLE BATTERY MARKET INCLUDED IN THIS REPORT

This research report on the global electric vehicle battery market has been segmented and sub-segmented based on battery type, vehicle type, and region.

By Battery Type

• Lead Acid Battery
• Lithium-Ion Battery
• Nickel Metal Hydride

By Vehicle Type

• Battery Electric Vehicle (BEV)
• Hybrid Electric Vehicle (HEV)
• Plug-in Hybrid Vehicle (PHEV)

By Region

      • North America

      • Asia Pacific

      • Europe

      • Latin America

      • Middle East and Africa