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The lithium-ion battery market size is forecast to increase by USD 448.8 billion at a CAGR of 42.93% between 2023 and 2028. Market growth is driven by increased demand for consumer electronics, rising shipments of smart wearables, and the use of battery energy storage for renewable energy intermittency. However, challenges include a preference for fuel cell solutions, a lithium supply-demand gap, and regulatory restrictions on lithium-ion battery air transportation. These factors necessitate innovation and strategic planning to leverage growth drivers and tackle industry challenges.
Lithium-ion batteries are rechargeable batteries in which carbon serves as an anode and lithium-ion acts as a cathode. The advantage of using these batteries is that they increase thermal stability, have higher current density, and have a longer shelf life than other battery technologies available in the market. Lithium-ion batteries are used in high-power applications such as HEVs, EVs, and consumer electronics devices. One of the key reasons for this significant growth is the increased adoption of EVs and HEVs worldwide. The market forecast report also includes an in-depth analysis of drivers, trends, and challenges. Our market growth analysis report examines historic data from 2018 - 2022, besides analyzing the current market scenario.
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The market is witnessing significant growth, driven by the booming EV industry and surging EV sales. Lithium and cobalt are pivotal components in these batteries, with demand further fueled by the automobile sector and renewable energy initiatives. However, challenges like supply chain disruption persist. Strategic collaborations among major market players are common, leading to mergers and acquisitions. These batteries cater not only to the automotive sector but also to consumer electronics and power tools, owing to their superior conductivity and energy density. Graphite-based lithium-ion batteries dominate the market, powering a myriad of electronic devices including laptops and mobile phones. As lithium insertion materials like graphite and LiCoO2 form the fundamental operation, their combination results in features vital for automotive and commercial applications. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers, trends, and challenges will help companies refine their marketing strategies to gain a competitive advantage.
The market experiences significant growth propelled by augmented demand from consumer electronics. Factors such as rising urbanization and increased household incomes globally contribute to higher consumer spending and confidence. Economic recovery in major emerging markets, particularly in Asia, further drives global consumer expenditure. Developing economies like China and India offer lucrative markets due to their large populations and open economies. The growing number of working women also boosts household incomes, leading to higher consumption levels. The consumer electronics segment expands rapidly, fueled by increased consumer spending on gadgets, driving demand for lithium-ion batteries. Continuous technological advancements in Lithium-Ion Battery Management Systems (BMS) and declining prices of consumer electronic products further stimulate segment growth. Strategic collaborations, mergers, and acquisitions among major market players enhance market dynamics, ensuring sustained growth in the market.
Legislative support for Li-ion battery recycling is a major lithium-ion market trend. Global concerns about environmental issues and greenhouse gas emissions have prompted countries to reconsider the use of fossil fuels in transportation. Electric vehicles (EVs) are seen as the only viable alternative to traditional fuel-powered vehicles. Several countries, including France, the UK, the Netherlands, and China, have implemented measures to promote the adoption of EVs, such as setting targets and restricting the sale of diesel and petrol vehicles. China, in particular, has introduced subsidies for EVs and imposed restrictions on new ownership of conventional cars.
Government regulations also focus on recycling batteries, especially lithium-ion batteries, to prevent environmental contamination and extract valuable metals. Companies like Umicore, Stiftung GRS Batterien, and Li-Cycle are engaged in battery recycling efforts. Proper recycling not only reduces environmental impact but also provides economic benefits for battery manufacturers. The disposal of lithium-ion batteries can have harmful consequences due to their explosive nature, potential groundwater and soil contamination, and the toxicity of electrolytes. Legislative support, such as the European Union's battery directive, is essential to improve battery recycling rates. Increasing rates of recycling, coupled with the growth of EVs and other end-user segments, are expected to drive the growth in the forecast period.
The growing popularity of fuel cell solutions is a major lithium-ion market challenge. The replacement of standard lithium-ion batteries with fuel cells poses a significant challenge for end-users in industries like automotive and material handling equipment. Conventional batteries require frequent replacement or recharging, causing logistical issues in operations that span multiple shifts. To address these challenges, more end-users are opting for fuel cell systems. On the other hand, Fuel cells are a promising technology known for their high efficiency in automotive and energy storage applications. They directly convert chemical energy into electrical energy through electrochemical reactions, offering a non-polluting and efficient power generation process.
Further, fuel cells can serve as reliable alternatives to secondary batteries due to their scalability and ability to provide backup and prime power in stationary applications. As the automotive industry looks for next-generation energy storage solutions, major automakers like Toyota Motor and Hyundai Motor are exploring fuel cells as a means to power electric vehicles (EVs) for longer durations. This shift towards fuel cell technology in EVs reduces the demand for lithium-ion batteries and directly impacts the lithium market growth during the forecast period.
The market share growth by the lithium nickel manganese cobalt segment will be significant during the forecast period. The success of lithium nickel manganese cobalt batteries is due to the combination of nickel and manganese. Despite having low specific energy, manganese has the advantage of creating a spinel structure to produce low internal resistance. Despite having a large specific energy, nickel is unstable. The strengths of the metals are increased when they are mixed. The preferred battery is a lithium nickel manganese cobalt battery, which is used in power tools, e-bikes, and other electric drivetrains. Such factors will increase segment growth during the forecast period.
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The lithium nickel manganese cobalt segment was valued at USD 11.40 billion in 2018. Batteries made of lithium nickel manganese cobalt can be made for both high-energy and high-power uses. Most electric automobiles use lithium nickel manganese cobalt batteries. Laptops, mobile phones, and other portable gadgets all employ lithium nickel manganese cobalt batteries. Battery storage power plants are another use for lithium nickel manganese cobalt batteries.
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APAC is estimated to contribute 51% to the growth of the global market during the projection period.
Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the projection period. Increasing penetration of renewable energy, EVs, and consumer electronics are the main contributors to the industry in APAC in 2023. However, the contribution of the renewable power sector is expected to increase during the forecast period because of the need to reduce greenhouse gas (GHG) emissions and lower the number of power outages in the region. The increasing penetration of renewable energy in the energy mix is expected to play a major role in the growth of the regional market during the forecast period. Renewable capacity installations are increasing owing to the supportive policies of the governments in APAC. Therefore, the growing demand for automobiles, supportive government policies to boost the adoption of EVs, and the installation of renewables will drive the growth of the regional industry during the forecast period.
Companies are implementing various market growth and forecasting strategies by analyzing factors such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product or service launches, to enhance their presence in the market.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
AT and T Inc., BYD Co. Ltd., CLARIOS LLC, Envision Energy USA Ltd., Exide Industries Ltd., GS Yuasa International Ltd., Hitachi Ltd., Johnson Controls International Plc., LG Chem Ltd., Manz AG, Panasonic Holdings Corp., Samsung SDI Co. Ltd., Shenzhen Bak Battery Co. Ltd., SK Inc., Sony Group Corp., TDK Corp., Tesla Inc., TianJin Lishen Battery Joint Stock Co. Ltd., and Toshiba 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.
The market research and growth 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.
The Market is witnessing substantial growth, driven by the burgeoning EV industry, automobile sector, and renewable energy sector. However, challenges such as supply chain disruption persist. Major market players are engaging in strategic collaborations, mergers, and acquisitions to consolidate their position. Various types of lithium-ion batteries, including sodium nickel chloride, lithium-air flow, and solid-state batteries, cater to diverse applications in industries like aerospace, medical, and telecommunications. With features like high power density and extended life cycles, lithium-ion batteries are preferred power sources for commercial and small-sized electronic devices. Advancements in graphite-based lithium-ion batteries and electrolyte solutions enhance energy efficiency and rechargeable battery capabilities, meeting the increasing demand for reliable and efficient power solutions.
Moreover, the market is dynamic, driven by advancements in technology and strategic maneuvers such as mergers and acquisitions. Various types like sodium nickel chloride, lithium-air flow, and lead acid batteries cater to diverse needs across sectors including marine and industrial applications. With types ranging from Lithium Cobalt Oxide (LCO) to Lithium Nickel Manganese Cobalt (NMC), these batteries offer distinct advantages such as high energy density and longer life cycles. Challenges like the memory effect and ageing persist, but expertise in management and integrated protection circuits ensure reliable power supply. As demand surges, innovations in battery solutions and electrolyte solutions drive the market forward, positioning lithium-ion batteries as indispensable components in passenger cars and various other sectors.
Lithium-Ion Battery Market Scope |
|
Report Coverage |
Details |
Base year |
2023 |
Historic period |
{{historic_period}} |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 42.93% |
Market growth 2024-2028 |
USD 448.8 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
33.19 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 51% |
Key countries |
China, US, Norway, Germany, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
A123 Systems LLC, AT and T Inc., BYD Co. Ltd., CLARIOS LLC, Envision Energy USA Ltd., Exide Industries Ltd., GS Yuasa International Ltd., Hitachi Ltd., Johnson Controls International Plc., LG Chem Ltd., Manz AG, Panasonic Holdings Corp., Samsung SDI Co. Ltd., Shenzhen Bak Battery Co. Ltd., SK Inc., Sony Group Corp., TDK Corp., Tesla Inc., TianJin Lishen Battery Joint Stock Co. Ltd., and Toshiba Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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