BATTERY MARKET ANALYSIS

Market Size and Trends

Global battery market is estimated to be valued at US$ 128.52 billion in 2024 and is expected to reach US$ 401.29 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 17.7% from 2024 to 2031.

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Global battery market growth is driven by increasing demand for EVs and energy storage systems across the globe. Lithium-ion batteries continue to dominate the transportation and stationary storage applications due to their high energy density. Furthermore, decreasing prices of lithium-ion batteries makes EVs and energy storage more viable and affordable. Governments around the world are also supporting the shift to sustainable technologies by providing various incentives and subsidies for EVs and renewable energy projects. This increasing focus on reducing emissions is expected to boost demand for batteries over the next decade.

Rising Adoption of Electric Vehicles

Growing concern over environmental pollution and rising fuel costs have resulted in increased focus on developing more sustainable transportation solutions. Electric vehicles that run on advanced battery technologies are emerging as a viable alternative to fuel-based vehicles. Several automobile manufacturers have ramped up investments in electric vehicles in response to tightening emission norms and shifting consumer preferences towards green mobility options. Battery electric vehicles and plug-in hybrid electric vehicles provide comparable driving ranges to gasoline vehicles and allow consumers to refuel using electricity from the grid instead of gasoline. The upfront costs of EVs are compensated over time through lower fuel and maintenance expenses. Supportive government initiatives such as purchase incentives and investments in charging infrastructure are encouraging more consumers to make the switch to EVs. Major automakers are aggressively expanding their EV lineups with new models featuring longer driving ranges. This rising adoption of electric vehicles across passenger and commercial segments is anticipated to boost demand for advanced lithium-ion battery packs.

For instance, in September 2023, Gotion, a lithium-ion battery manufacturer, announced a US$ 2 billion investment in its inaugural factory in Manteno, Illinois, U.S. This facility, slated to become the largest EV battery production, will repurpose an existing Kmart distribution center and is projected to employ up to 2,600 workers. The plant will churn out 40 GWh lithium-ion battery cells and 10 GWh battery packs, focusing on energy storage system integration and supporting Illinois' climate change objectives. Gotion stands to gain significant state incentives and intends to erect a battery component factory in Michigan.

Market Concentration and Competitive Landscape

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The constant evolution of digital technologies and increasing usage of smart devices have heightened the importance of uninterrupted access to electricity. Power outages remain a persistent problem in many parts of the world, owing to aging electrical infrastructure, natural calamities and grid failure risks. To safeguard against unexpected disruptions in power supply, industrial facilities, telecom towers, data centers and buildings have been strengthening their dependency on battery backup reserves. Lithium-ion batteries are the technology of choice for such backup power applications due to their high energy density, long service life and relatively lower self-discharge rates compared to lead-acid alternatives. In remote and off-grid areas lacking access to centralized power networks, batteries play a vital role in energizing essential needs through micro-grid and solar-plus-storage solutions. The growing energy needs of a digitally connected world along with instability in conventional grids is propelling the battery storage industry. As reliance on backup power grows, there will be a corresponding rise in demand for advanced battery packs that can effectively deliver on reliability, performance and long-term cost viability.

For instance, in June 2020, Tesla announced plans to manufacture next-generation electric vehicle batteries, designed to eliminate the rare, costly, and controversial element cobalt from batteries. This breakthrough technology is poised to enable cars to travel 400 miles or more between charges.

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Battery technology has seen slow progress in recent decades, with current lithium-ion batteries nearing their peak performance. The high cost of producing high-capacity, long-lasting batteries can hinder market expansion. Sourcing materials like lithium, cobalt, and graphite poses supply chain risks, especially with increasing demand. Strict regulations on battery shipment also raise costs. Additionally, consumer acceptance presents a challenge for new battery technologies due to uncertainties about performance, safety, and lifespan.

Market Opportunities: Surge in Electric Vehicles and Electronics

The rise of electric vehicles and electronics presents significant growth opportunities for the market. Battery demand is expected to surge over the next decade. Government backing for clean technologies is driving substantial research and development investments into innovative battery chemistries such as solid-state, lithium-sulfur, and lithium-air, which offer the potential to revolutionize performance.

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By type, primary battery segment is estimated to contribute the highest market share of 67.1% in 2024, owing to its convenience and reliability characteristics. Primary batteries, also called disposable or single-use batteries, provide a portable and convenient power source for many common consumer devices. The simplicity of primary batteries makes them attractive for devices that only require intermittent power for things like remote controls, toys, flashlights, calculators and more. Not requiring recharging means these batteries can power devices immediately without extra charging steps. This on-demand usability is a driving factor in their widespread adoption.

Primary batteries also provide reliable energy even after long periods of non-use. Stored on a shelf for months or years, primary batteries can still power devices when needed due to their sealed and non-rechargeable design. This long shelf-life makes them well-suited for emergency use cases and applications requiring standby power.

Common primary battery chemistries like zinc-carbon and alkaline batteries are widely available at affordable prices, further supporting market growth. The low upfront battery investment compared to rechargeable options also appeals to price-sensitive consumers.

Insights, By Technology - Energy density and costs push Lithium-ion technology forward

By technology, lithium-ion battery segment is estimated to contribute the highest market share of 31.41% in 2024 due to its high energy density and falling production costs. Lithium-ion possesses several advantages over other rechargeable battery types, most notably a substantially higher energy density by volume and weight. This allows Lithium-ion to power devices for longer runtimes utilizing a smaller and lighter form factor.

The energy density benefits of Lithium-ion have made it the technology of choice for many consumer electronics and is enabling the electrification of other industries like automotive. As costs fall due to growing economies of scale in battery cell production, Lithium-ion is also becoming more cost competitive relative to its energy output versus older technologies. Lower costs are further driving adoption and range expansion into new applications.

Significant research and development across the supply chain is continually improving Lithium-ion battery performance. Advancements in chemistries, materials and manufacturing are translating to longer battery lifespan through more charge cycles. Improved safety standards are also bolstering Lithium-ion’s viability. Its leading energy storage capabilities combined with reduced costs and heightened safety will likely see Lithium-ion expand its market share dominance in the coming years.

Insights, By Application - Rise of electrified transportation boosts automotive batteries segment

By application, automotive batteries segment is estimated to contribute the highest market share of 38.12% in 2024, due to rising electric vehicle production and emerging mobility trends. Global commitments to reduce vehicle emissions and dependence on fossil fuels are accelerating the electrification of automotive powertrains. A growing variety of plug-in electric vehicles (EVs) like electric cars, hybrids and fuel cell vehicles require large, high-performance battery solutions.

Meanwhile, emerging micromobility solutions like electric scooters and bikes are utilizing smaller lithium-ion batteries for urban transportation alternatives. Battery-powered modes of individual transportation are on the rise to reduce urban congestion and pollution. This emergence of diverse electrified vehicles across small scooters to large trucks is fuelling exponential growth of automotive batteries segment.

Advancing battery technologies are critical to empowering sustainable automotive trends and revolutionizing personal transportation globally. This positions automotive batteries as the segment primed to grow most substantially in coming years from transportation sector transformation.

Regional Insights

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Asia Pacific battery market has been witnessing strong growth over the past decade and currently dominates the global battery market with share of 41.5% in 2024. The region is also the fastest growing region with CAGR of 22.42% in 2024. The region is home to leading battery manufacturers and several top automotive brands. Strong focus on the automotive industry has propelled battery demand, especially for lithium-ion batteries which are frequently used in electric vehicles. Stringent emission regulations have pushed many automakers to increase electric vehicle production. This has significantly boosted the battery market as the batteries remain the key component of any electric vehicle. Additionally, demand from other applications such as consumer electronics and energy storage is also driving the battery market growth.

With developing economies such as China, India and ASEAN nations undergoing rapid urbanization and industrialization, the region is expected to be the fastest growing market for batteries globally. The presence of a sizeable consumer electronics industry with major hubs in China, Taiwan and South Korea has boosted the consumer battery market. China, in particular, has become an important exporter of lithium-ion battery cells and packs to the automotive industry worldwide. Several manufacturing plants are also being set up across Asia to augment production. Factors such as strong government support for the adoption of electric vehicles, favourable trade policies and availability of raw materials at competitive prices makes Asia highly attractive for battery manufacturing investments. Countries like China and South Korea already have a robust domestic battery market aimed at applications like consumer electronics, power tools and automotive uses.

Market Report Scope

Key Developments

• In September 2023, The BMZ Group, a prominent lithium-ion battery manufacturer, acquired Nox Cycles Austria, along with its sister companies in Germany and Switzerland, as well as the Hawk Bikes brand. This acquisition fortifies BMZ's foothold in the e-bike industry, with a specific emphasis on 'Made in Austria' production. Both entities underscore continuity in management, customer relationships, and employees, striving to enhance innovation and expand production and sales under the new alliance.
• In August 2022, MIT researchers unveiled a groundbreaking concept for low-cost batteries, crafted entirely from abundant and inexpensive materials. The novel battery architecture, employing aluminium and sulfur as its two electrode materials with a molten salt electrolyte in between, caters to low-cost backup storage for renewable energy sources.
• In January 2022, BYD and FAW laid plans for a production facility for electric car batteries in northeastern China, boasting an annual capacity of 45 GWh. This endeavor materialized through a joint venture dubbed FAW FinDreams New Energy Technology, with BYD holding 51% ownership and FAW Group owning the remainder.
• In March 2021, a research team at POSTECH (South Korean university) pioneered a significantly faster charging and longer-lasting battery material. This battery material extends the longevity of Li-ion batteries, enabling the production of Li-ion battery electrodes that charge up to 90% in six minutes and discharge 54% in 18 seconds.

*Definition: The battery market supplies various battery types that are used to power everyday devices and equipment. It caters to the consumer battery segment with batteries for devices like cameras, toys, remote controls etc. The market also supplies industrial batteries used in backup power systems, motor vehicles and more. The battery market provides affordable and high-performance options in all major battery chemistries like alkaline, lithium-ion, lead-acid and more. Custom batteries are also developed to meet unique power requirements of industrial equipment and machinery.

Market Segmentation

• Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Primary Battery
  • Secondary Battery
•  Technology Insights (Revenue, USD Bn, 2019 - 2031)
  • Lead-acid Battery
  • Lithium-ion Battery
  • Nickel-metal Hydride (NiMH) Battery
  • Nickel-cadmium (NiCD) Battery
  • Nickel–zinc (NiZn) Battery
  • Flow Battery
  • Sodium–sulfur (NAS) Battery
  • Zinc-manganese Dioxide Battery
  • Small Sealed Lead-acid Battery
  • Other Technologies
•  Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Automotive Batteries
  • Industrial Batteries
  • Portable Batteries
  • Power Tools Batteries
  • SLI Batteries
  • Other Applications
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • South Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • CATL (Contemporary Amperex Technology Co Ltd) 
  • BYD Company Limited 
  • Panasonic Corporation 
  • LG Chem 
  • Samsung SDI 
  • SK Innovation 
  • EVE Energy Co, Ltd 
  • Tesla 
  • AESC (Automotive Energy Supply Corporation)
  • GS Yuasa Corporation 
  • Coslight 
  • Hitachi, Ltd 
  • Johnson Controls International plc 
  • Honeywell International Inc
  • Bosch Group 
  • Varta AG 
  • Pinnacle Electronics Inc
  • Microvast Holdings, Inc
  • Liontown Resources Limited 
  • Freudenberg Group