Electric Vehicle Battery Market Size 2024-2028

The Electric Vehicle Battery Market size is forecast to increase by USD 65.23 billion, at a CAGR of 20.2% between 2023 and 2028. The market's growth hinges on various factors, notably the rising demand for electric vehicles (EVs) and their broader applications, marking a notable shift in the automotive industry towards EVs. Additionally, advancements in EV batteries and EV battery recycling and associated technologies play a pivotal role. These factors collectively drive innovation and adoption, fostering a conducive environment for market expansion. The growing focus on sustainability and the push towards reducing carbon emissions further amplifies the significance of these developments, shaping the trajectory of the EV market in the foreseeable future

What will be the Size of the Electric Vehicle Battery Market During the Forecast Period?

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Market Dynamics and Customer Landscape

The market continues to evolve rapidly, driven by advancements in battery technology such as lithium-ion batteries and emerging solid-state batteries. With automakers investing heavily in Battery Electric Vehicles (BEVs) and Hybrid Electric Vehicles (HEVs), driving ranges have improved significantly, addressing concerns about battery life and charging times. Nickel-metal hydride batteries, once prominent in Hybrid Electric Vehicles (HEVs), are gradually being replaced by more efficient lithium-ion batteries. Northvolt, a key player in the lithium-ion segment, plays a pivotal role in enhancing energy security through its Gigawatt hours of production capacity. As the shift from Internal Combustion Engines to EVs accelerates, the market is diversifying with offerings like Extended Range Electric Vehicles (EREVs), catering to SUVs and various automotive segments including lead-acid and nickel metal hydride segments. The market landscape is evolving rapidly, fueled by advancements in fuel cell technology and battery innovation. These cells utilize hydroxide compounds to produce electricity, offering promising potential for powering various vehicles, including the traditional pickup truck. Key advancements include the development of high-performance battery chemistries like Lithium nickel manganese cobalt oxide (NMC), Lithium nickel cobalt aluminum oxide (NCA), and Lithium iron phosphate (LFP). These battery variants offer improved energy density, longer lifespan, and faster charging capabilities, making them integral to the growth of the electric vehicle market.

Key Market Drivers

The increasing demand for EVs and their expanded applications is notably driving the market analysis and report. The market is directly driven by increasing sales of BEVs and PHEVs.In 2021, over 6.5 million EV batteries were sold globally, marking a 109% increase from the previous year. China led the sales of EV batteries in 2022, with Europe and the US following closely. Environmental concerns are driving the shift towards electric vehicles, which run on electricity and other power sources like solar, wind, and biofuels. Factors such as advances in battery technology, improvements in charging infrastructure, and socio-economic conditions are fueling the demand for EVs during the forecast period. Key players in the market include automakers and fleets, who are investing in battery development and EV battery technology to enhance the range of EVs, improve battery life, and reduce charging times.

Lithium-ion batteries are currently the dominant technology, but solid-state batteries are expected to gain popularity due to their longer battery life and shorter charging times. However, high initial investments and the cost of electricity are challenges that need to be addressed. The market also includes hydrogen vehicles, ethanol vehicles, and flex-fuel vehicles, but solid-state battery technology is expected to have a significant impact on the industry's carbon footprint. Cathode chemistry and cell-to-pack (CTP) technology are also areas of focus for battery development. This has greatly increased the workload of the battery, driving demand for Battery Thermal Management Systems (BTMS) that enable wider operating temperature ranges, extend battery life and extend the range of EVs. Therefore, these factors are anticipated to drive market growth and trends during the forecast period.  

Significant Market Trends

Increasing use of software and sensors for intelligent Battery Management Systems(BMS) is a key trend influencing the EV Battery Market growth analysis. Plug-in hybrid electric vehicles(PHEVs) are increasingly equipped with innovative features such as global positioning systems (GPS), modern power train systems, AC systems, power windows, and display drives providing real-time information about the battery charge levels, all of which consume a substantial amount of power. EVs and Plug-in Hybrid EVs (PHEVs) are equipped with innovative features such as GPS, AC systems, and real-time battery charge information, which consume substantial power and require frequent charging. This has led to a focus on developing intelligent Battery Management Systems (BMS) to optimize battery life and reduce charging times.

Moreover, aligned with market trends and analysis, automakers are investing heavily in EV battery technology, including lithium-ion batteries and solid-state batteries, to increase driving ranges and improve battery efficiency. The development of advanced BMS solutions is a key trend in the industry, driven by the need for longer range EVs and the reduction of carbon footprint. However, cathode chemistry and Cell-to-Pack (CTP) technology are also areas of focus for battery development in the EV sector.. These BMSs can monitor and detect small changes in battery voltage and current via sensors with an accuracy of +-0.5% for current and +-0.1% for voltage over operating temperature and lifetime. Such factors are expected to increase the use of EV batteries and are expected to drive market growth during the forecast period.  

Major Market Challenges

The growing global power crisis is challenging market growth. As the market for HEVs and electric vehicles expands, the global demand for electricity to electric power vehicles is increasing. Regions where electricity generation only covers the average daily consumption, mainly in developing countries such as Norway, the Netherlands, the United Kingdom, and Nepal, cannot afford to increase the number of EV sales and market growth.  For example, vehicles make up nearly 25% of the vehicles on the road in Europe, minimizing the consumption of about 13 million barrels of crude oil per day. However, it consumes electricity which accounts for 11% of the world's electricity demand.

India and Japan are some of the Asian countries facing a power crisis. Japan currently imports more than 85% of its primary energy demand. As a result, the country's dependence on oil imports has increased, driving up electricity prices. The energy crisis, along with the rising cost of power generation, has had a major impact on EV sales and, in turn, EV battery sales. Therefore, the growing global power crisis is expected to hamper the growth of the EV Battery Market during the forecast period.  

Key Customer Landscape

The Electric Vehicle Battery market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the Electric Vehicle Battery market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

A123 Systems LLC: The company offers different types of battery systems such as 12V Starter Batteries and 48V batteries. It also offers energy-scalable battery modules such as PHEV2 Module and 22S3P Module.

The Electric Vehicle Battery market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Ballard Power Systems Inc.
• BYD Co. Ltd.
• Clarios
• Crown Battery Manufacturing Co.
• Cummins Inc.
• East Penn Manufacturing Co. Inc.
• EnerSys
• Enertech International Inc.
• Envision Group
• Exide Industries Ltd.
• GS Yuasa Corp.
• Hitachi Ltd.
• LG Chem Ltd.
• OptimumNano Energy Co. Ltd.
• Panasonic Holdings Corp.

Qualitative and quantitative analysis of Companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.

Market Segmentation

By Type

The market share growth by the lithium-ion battery segment will be significant during the forecast period. The lithium-ion batteries segment is anticipated to witness rapid growth during the forecast period, owing to the high demand for lithium-ion batteries from the EV industry and declining prices of battery technology. Lithium-ion batteries belong to a family of lithium metal chemistries that are manufactured using various combinations of anode and cathode materials. The most commonly used cathode combinations for transportation applications are Lithium Nickel Cobalt Alumina (NCA), Lithium Nickel Manganese Cobalt (NCM or NMC), Lithium Manganese Spinel (LMO), Lithium Titanate (LTO), and Lithium Ion Phosphate (LFP). Each of these combinations has different characteristics related to safety, cost, and performance. The anodes in all these batteries are generally carbon. 

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The lithium-ion battery segment was valued at USD 21.63 billion in 2018. Lithium-ion batteries have higher current density, longer current holding capacity, and longer shelf life compared to other battery technologies on the market,  making this battery technology superior to other battery technologies. Moreover,  the cost of these batteries is expected to drop significantly due to mass production and various government incentives. Therefore, the demand for lithium-ion batteries for vehicles is expected to grow rapidly during the forecast period. 

Regional Analysis

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APAC is estimated to contribute 49% to the growth of the market during the market forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Asia Pacific dominates the market. There are many well-established suppliers in the region, such as Automotive Energy Supply Corporation, GS Yuasa International Ltd., LG Chem, and Panasonic Corporation. Governments of various countries such as China, Japan, India, and South Korea are working together to shift the focus from fossil fuel vehicles to vehicles. They set goals and targets for the use of vehicles and passed several reforms to encourage their use. There is also a growing trend in R&D in the APAC market to improve the technology available to advance such vehicles. China is the leading market focus in APAC due to its large population and strong demand for vehicles, as well as its manufacturing and industrial boom. China is also one of the largest markets for e-bikes as e-bikes are becoming a popular mode of transportation in the country.

Segment Overview

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion " for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• Type Outlook
  • Lithium-ion battery
  • Lead-acid battery
  • Others

• Vehicle Type Outlook
  • Battery electric vehicle
  • Plug-in hybrid electric vehicle
  • Hybrid electric vehicle

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The evolution of EV technology is reshaping the automotive industry, with a focus on enhancing battery performance and driving ranges. EV battery manufacturing, led by companies like LG Energy Solutions, is crucial in meeting the demand for electric cars while driving down battery prices through efficient mining and refining of essential materials like graphite and phosphoric acid. The transition from Internal Combustion Engines necessitates robust supply chains capable of scaling manufacturing capacity, from cell-to-chassis integration in vehicles like the Cadillac Lyriq. Emerging technologies such as sodium-ion batteries are poised to complement mainstream lithium-ion solutions, offering potential alternatives in the EV battery segment. As automakers push towards sustainability, innovations in battery technology continue to accelerate, reducing reliance on Lead acid and Nickel metal hydride segments in favor of more efficient options.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market  during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the size of the market size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across APAC, Europe, North America, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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