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The automotive Li-Ion battery market size is forecast to increase by USD 56 million at a CAGR of 33.7% between 2023 and 2028. The automotive Li-ion battery market is witnessing significant growth due to several key trends. Favorable government policies, including subsidies and incentives, are boosting the adoption of electric vehicles (EVs) and, consequently, the demand for Li-ion batteries. Furthermore, the increase in global automotive Li-ion battery production capacity is enabling manufacturers to meet the surging demand for EVs. Additionally, the development of high-energy-density batteries, such as lithium-sulfur batteries, is expected to enhance the performance and efficiency of EVs, making them a more viable alternative to traditional internal combustion engine vehicles. These factors are driving the growth of the automotive Li-ion battery market.
The automotive li-ion battery market is experiencing significant growth due to the increasing demand for electric vehicles (EVs) and energy-efficient vehicles. Lithium-ion batteries have surpassed nickel cadmium batteries in terms of power density, energy density, electrochemical capability, and low maintenance. These batteries offer longer battery life, faster charge times, and lower self-discharge rates compared to their nickel cadmium counterparts. The shift towards EVs is driven by the need to reduce carbon emissions from passenger vehicles. Li-ion batteries are essential for EVs as they provide the necessary power to run the vehicle's electric motor. The toxicity of li-ion batteries is a concern, but advancements in battery technology are addressing this issue. Environmental sustainability is a key factor in the automotive industry, and li-ion batteries are being developed with recycled materials and solid-state technologies to reduce their environmental safety and impact. Ultra-fast charging technologies and smart grids are also being integrated into battery systems to improve charging efficiency and reduce fuel prices. The future of the automotive li-ion battery market lies in the integration of connected vehicles, autonomous vehicles, and battery storage systems to create a sustainable and efficient transportation system. The market is expected to grow significantly as the world transitions towards cleaner and more energy-efficient transportation solutions.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The BEV segment is estimated to witness significant growth during the forecast period. The automotive industry's shift towards electric vehicles (EVs) has led to a significant increase in demand for energy storage solutions, particularly lithium-ion batteries. These batteries, which are composed of materials such as lithium (Li), nickel (Ni), cobalt (Co), graphite, electrolytic solution, and separators, offer advantages over traditional batteries like nickel-cadmium (NiCd) and lead-acid batteries. Li-ion batteries boast higher power and energy densities, enabling them to provide greater power capacity in smaller sizes and longer driving ranges for passenger vehicles. Moreover, li-ion batteries' electrochemical capability, low maintenance, and self-discharge rate make them an attractive choice for EV production. However, concerns regarding their toxicity and environmental sustainability have led to efforts in using recycled materials and developing new battery technologies like solid-state batteries.
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The BEV segment was valued at USD 6.10 million in 2018. The shift towards renewable energy and the integration of smart grids, connected vehicles, and autonomous vehicles further necessitate the need for advanced battery storage systems. Factors like carbon emissions, charge times, battery life, fuel prices, and energy efficiency are driving the growth of the automotive li-ion battery market. Original Equipment Manufacturers (OEMs) like Tesla, General Motors, and Volkswagen are investing in various battery chemistries, such as Lithium Iron Phosphate (LiFePO4), Nickel Manganese Cobalt (NMC), Lithium Titanium Oxide (LTO), and others, to cater to the diverse requirements of EVs and improve battery performance. Ultra-fast charging technologies and wireless charging systems are also gaining popularity, with battery swapping stations being explored as potential solutions for addressing range anxiety. However, raw material prices, particularly lithium, remain a significant challenge for the industry. In conclusion, the automotive li-ion battery market is witnessing significant growth due to the increasing adoption of EVs and the need for energy-efficient, high-performance batteries. OEMs are investing in research and development to improve battery technology, increase energy density, reduce toxicity, and enhance recycling capabilities.
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APAC is estimated to contribute 54% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The global automotive Li-Ion battery market is witnessing significant growth due to the increasing adoption of passenger vehicles with reduced carbon dioxide emissions. Lithium-ion batteries have replaced traditional Nickel Cadmium batteries in electric vehicles (EVs) due to their higher power density, energy density, and electrochemical capability. These batteries offer low maintenance, longer battery life, and faster charge times, making them an ideal choice for EV production. Moreover, the shift towards renewable energy and energy-efficient vehicles is driving the demand for Li-Ion batteries in battery storage systems, smart grids, and connected vehicles. The market is also witnessing advancements in battery technology, with the emergence of solid-state batteries, recycled materials, and ultra-fast charging technologies. However, concerns over the toxicity and environmental sustainability of lithium extraction and battery disposal are limiting the market growth. The market is segmented based on battery chemistry, including Lithium Iron Phosphate (LiFePO4), Nickel Manganese Cobalt (NMC), Lithium Titanium Oxide (LTO), and others. Original Equipment Manufacturers (OEMs) are investing in research and development to improve battery power capacity, reduce charge times, and enhance battery life. Fuel prices and government regulations are also influencing the market dynamics.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The favorable government policies boosting automotive li-ion battery market is notably driving market growth. The automotive li-ion battery market is experiencing significant growth due to increasing global focus on reducing greenhouse gas emissions and improving energy efficiency in the transportation sector. Governments and automotive original equipment manufacturers (OEMs) are collaborating to promote the adoption of electric vehicles (EVs), including hybrid electric vehicles (HEVs), two-wheelers, and three-wheelers, as alternatives to traditional fossil fuel-powered vehicles. This trend is being driven by various initiatives, such as bans on diesel vehicles in countries like France and the UK, and incentives and tax credits offered by governments to encourage EV purchases.
For instance, in the US, consumers can receive federal tax credits of up to USD 7,500 upon purchasing BEVs, PHEVs, and HEVs after 2010. The demand for automotive li-ion batteries is also being fueled by the growing infrastructure for renewable energy storage and the increasing popularity of EVs for their superior battery performance, cost-effectiveness, and longer cycle life. The market for automotive li-ion batteries is further fuelled by advancements in battery chemistries, such as the reduction of cobalt usage, which is a key component known for its environmental and ethical concerns. Thus, such factors are driving the growth of the market during the forecast period.
An increase in global automotive li-ion battery production capacity is the key trend in the market. The global automotive li-ion battery market is witnessing significant growth, with key players expanding their production capacity to meet the increasing demand for battery-powered vehicles. China leads the market, accounting for around 70% of global automotive battery production capacity, with Europe following closely at approximately 35 GWh per year. This capacity is projected to increase to 400 GWh by 2025. Manufacturers are focusing on cost-effective energy storage solutions to make li-ion batteries more affordable for both OEMs and the aftermarket. This trend is particularly evident in the two-wheeler and three-wheeler segments, where affordability is a key consideration.
Further, in the four-wheeler segment, hybrid electric vehicles (HEVs) and electric vehicles (EVs) are driving demand for high-performance batteries with extended cycle life. Battery chemistries, such as lithium-nickel-manganese-cobalt oxide (NMC) and lithium-iron-phosphate (LFP), are being used to improve battery performance and energy efficiency. Renewable energy storage applications are also contributing to the growth of the automotive li-ion battery market. Despite the increasing production capacity and declining prices, the use of cobalt in battery production remains a concern due to its environmental impact and ethical considerations. Thus, such trends will shape the growth of the market during the forecast period.
The development of high-energy-density batteries such as lithium-sulfur batteries is the major challenge that affects the growth of the market. The global automotive industry is witnessing a significant shift towards cleaner and more energy-efficient solutions to mitigate greenhouse gas emissions. Traditional automotive lithium-ion batteries, while widely used in Hybrid Electric Vehicles (HEVs) and Electric Vehicles (EVs), have limitations in terms of energy density and battery performance. Li-ion batteries offer an energy density of up to 300 Wh/kg, which is insufficient to meet the growing demand for clean energy. Two-Wheeler, Three-Wheeler, and Four-Wheeler manufacturers are exploring alternative battery chemistries to enhance battery performance and offer cost-effective energy storage. One such alternative is lithium-sulfur (Li-S) batteries, which offer higher energy density compared to li-ion batteries.
Similarly, sulfur delivers a high theoretical capacity, theoretically six times that of li-ion batteries. However, the commercialization process of Li-S batteries has been slow due to challenges in battery stability and cycle life. The automotive industry's focus on renewable energy storage and energy efficiency has accelerated the research and development of advanced battery chemistries. Li-S batteries hold significant potential for EV infrastructure due to their higher energy density and potential cost savings. Despite the challenges, ongoing research and advancements in battery technology are expected to overcome the limitations of Li-S batteries and make them a viable alternative to traditional li-ion batteries. Hence, the above factors will impede the growth of the market during the forecast period.
The 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
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.
Brookfield Business Partners LP - The company offers lithium-ion solutions that manage the various, high electrical loads and usage demands.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
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 global automotive li-ion battery market is experiencing significant growth due to the increasing demand for passenger vehicles with low carbon emissions. Lithium-ion batteries have replaced traditional nickel cadmium batteries in electric vehicles (EVs) due to their higher power density, energy density, electrochemical capability, and lower self-discharge rate. These batteries offer advantages such as low maintenance, longer battery life, and faster charge times, making them ideal for EVs. Environmental sustainability is a key factor driving the market's growth. Lithium-ion batteries offer improved environmental sustainability compared to conventional internal combustion engine vehicles, as they produce zero tailpipe emissions. The increasing production of electric vehicles, renewable energy integration, and the adoption of energy-efficient vehicles are also contributing to the market's growth. Battery disposal is a concern due to the toxicity of lithium-ion batteries. However, advancements in battery technology, such as solid-state batteries, recycled materials, and ultra-fast charging technologies, are addressing these concerns. Additionally, wireless charging systems and battery swapping stations are being developed to further improve the convenience and efficiency of EVs. Raw material prices, especially lithium, continue to be a challenge for the market. However, the development of alternative chemistries, such as lithium iron phosphate (Lifepo4), nickel manganese cobalt (NMC), lithium titanium oxide (LTO), and other advanced battery technologies, is helping to mitigate this issue. The market is expected to continue growing due to the increasing demand for energy-efficient vehicles, advancements in battery technology, and the integration of smart grids and connected and autonomous vehicles.
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Market Scope |
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Report Coverage |
Details |
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Page number |
139 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 33.7% |
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Market growth 2024-2028 |
USD 56 million |
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Market structure |
Concentrated |
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YoY growth 2023-2024(%) |
27.5 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 54% |
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Key countries |
China, US, Norway, Germany, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Brookfield Business Partners LP, BYD Co. Ltd., China Aviation Lithium Battery Technology Co. Ltd., Contemporary Amperex Technology Co. Ltd., GS Yuasa International Ltd., Hitachi Ltd., LG Chem Ltd., Panasonic Holdings Corp., Samsung SDI Co. Ltd., and Toshiba Corp. |
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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 the market forecast period |
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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. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Vehicle Type
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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