Global Lithium-Ion Battery Market - Market Trends and Outlook to 2028

Global Lithium-Ion Battery Market - Market Trends and Outlook to 2028

A battery is a device that stores energy and then discharges it by converting chemical energy into electricity. It primarily consists of a cathode, anode, and electrolyte. Numerous batteries exist based on the varying chemical composition of the battery. Li-ion battery is one such battery in which Li ions flow from the anode to the cathode through the electrolyte, usually an ether. The anode for lithium-ion cells is a carbon compound with a graphite cathode of Lithium oxide.

Increasing use of consumer electronics, the rapid growth of the Electric Vehicle (EV) market, growing demand for backup at data centers and Telecommunications, and the inherent benefits of Li-ion batteries (high energy density, zero memory effect, and almost non-existent self-discharge) is expanding the Li-ion battery market. Rising emphasis on deploying renewable sources of energy is driving research and applications of Lithium-ion battery as an Energy Storage System (ESS) to increase reliability and dispatchability.

Automotive Li-ion battery production was 160 GWh in 2020, up 33% from 2019. The increase is attributed to a 41% increase in electric car registrations and a constant average battery capacity of 55 KWh for Battery Electric Vehicles (BEVs) and 14 KWh for Plug-In Hybrid Electric Vehicles (PHEVs). Nickel-Manganese-Cobalt is the most used chemistry for Li-ion batteries, while Nickel-Aluminium-Cobalt chemistry accounts for the rest. According to BNEF's yearly survey of battery prices, the weighted average cost of automotive batteries declined 13% in 2020 from 2019.

Market Drivers

The intensifying ubiquity of the TWS (True Wireless Stereo) applications, Smart systems (Smart meters, smart transportation, smart security), two-wheeler market, and the electric tool market contribute to the expansion of the Li-ion battery applications.

A key opportunity for the Li-ion battery is China's "New infrastructure" plan combined with the "Dual circulation" strategy proposed in its 14th 5-Year plan in March 2021. The "New infrastructure" plan, focusing on seven key areas to enable IoT and the commercialization of 5G technology, has resulted in the integration of industries such as transportation, energy, medical care, and other fields. These numerous application scenarios are increasing the demand for power supplies.

Market Trends & Developments

Increasing interest from multiple companies in the development and trial production of Li-ion batteries with applications in ultra-low temperatures at high latitudes and altitudes can create markets in base stations, unmanned drones, aviation and aerospace areas, and other circumstances that require ultra-low temperature.

Historically, electric tools such as drills, saws, and grinders had small combustion engines, NiMH batteries, or relied on external power sources. Manufacturers of electric tools such as Bosch, Stanley Black & Decker, Milwaukee Electric Tool, etc., have begun to use Li-ion technology.

The expansion of available New Energy Vehicles (NEV) models and the addition of 462000 new public charging facilities by the end of 2020 is forecasted to add to the rapid growth of consumer demand in China. Europe with a YoY 143.8% electrification rate and China with a 10.9% rate is set to contribute to the growing number of new energy passenger vehicles, intensifying the demand for Li-ion batteries.

Despite the global consensus to reduce GHG emissions and the consequent promotion of NEVs, China has already reached a phase of cutting down subsidies for NEVs while European countries are increasing subsidies, indicating a nascent market.

In spite of the advantages, Li-ion batteries pose safety concerns related to thermal runaway and flammability of the electrolyte components. These concerns have resulted in the search for safer and cheaper alternatives, especially for EV applications.

Potential Threat from Sodium-Ion batteries

There is an increasing interest in exploring the usage of Sodium-Ion batteries (in initial stages of commercialization) by several companies, which could pose a threat to Li-ion batteries in the future.

For instance, China's CATL launched the first Na-ion battery in July of 2021. This alternative has gained the approval of China's Ministry of Industry and Information Technology, which avowed to undertake measures to hasten the development, standardization, and commercialization of NA-ion battery providing EVs with a safer, faster charging, and cheaper alternative.

Given the widespread nature of Sodium in the Earth's reserves (approximately 2.5% to 3%) relative to Lithium, this new technology could be a significant threat to Li-ion batteries if commercialized. Countries with limited EV adoption due to price sensitivity and resource constraints will find the Na-Ion battery technology attractive.

Another advancement in the Lithium-ion battery market is the Cobalt-free Lithium-ion battery. Panasonic expects the commercialization of such batteries in two to three years.

Strategic Supply Chain Analysis

The green transition to renewable energy and electrification of vehicles increases the demand for critical minerals, semiconductors, and high-capacity batteries. An EV requires six times more critical minerals than a conventional vehicle. The lithium-ion battery market is forecasted to grow exponentially by 2030 due to its deployment in EVs and stationary storage. China is the leading producer of lithium-ion batteries with a global capacity of 77% marking it a key player in the supply chain. High dependence on a few countries for such critical components is not sustainable, a fact well proven when the COVID crisis disrupted the supply chain globally. The EU and the US face similar challenges in developing a domestic supply chain for such critical materials/technologies. In June 2021, the EU-US Trade and Technology Council was established to focus on cooperation in supply chains.

To strengthen the strategic supply chain, the European Commission has launched the European Battery Alliance (EBA) in 2017 and the European Raw Materials Alliance (ERMA) in 2020. In concord with the EBA, the European Commission has mobilized combined public and private investment of EUR 8.2 and EUR 11.9 billion for two key projects. The ERMA focuses on reducing dependency on other countries, diversifying sources, responsible sourcing, and circularity.

Significant Company Plans in the Li-Ion Battery Market

LG Energy solution and GM announced in April 2021 more than USD 2.3 billion for their second plant at Spring Hills, Tennessee, US under their Joint Venture "Ultium Cells LLC." The plant is scheduled to open in late 2023.

Prime Planet Energy & Solutions Inc, a Joint Venture between Toyota Motor Corp and Panasonic Corp, announced in October 2020 its plan to produce lithium-ion batteries for hybrid cars at a plant in Western Japan from the year 2022. The proposed plant at Tokushima, Japan, is claimed to have enough capacity to manufacture batteries sufficient for 500,000 vehicles.

Both LG Chem and CATL are investing in building a Lithium battery plant in Indonesia in concord with the Indonesian Government. Production is expected to begin in 2024.

Panasonic, energy company Equinor, and Industrial group Hydro signed an MoU in November 2020 to form a strategic partnership to explore possibilities for establishing a sustainable and cost-competitive European Battery business.

Ford and SK Innovation are set to combinedly invest USD11.4 billion to build an electric F-150 assembly plant and three battery plants in the US in their joint venture "BlueOvalSK," the companies announced in September 2021. The battery plants will have a combined annual capacity of 129 gigawatt-hours (GWh) when fully operational. This joint venture is the most significant investment for battery plants in the US so far. The Tennessee plant will have a capacity of 43 GWh, while the one at Kentucky will have a capacity of 86 GWh.

Blackridge Research's Global Lithium-ion battery Market report provides insights into the current global and regional market demand scenario and its outlook.

The study offers a detailed analysis of various factors instrumental in affecting the Lithium-ion battery market's growth. The study also comprehensively analyses the Lithium-ion battery market by segmenting it based on geography (North America, Europe, Asia-Pacific, Rest of the World) and by application (Consumer batteries, Electric Vehicle Batteries, and Energy Storage Systems).

The report also addresses present and future market opportunities, market trends, developments, and the impact of Covid-19 on the Lithium-ion battery market, critical commercial developments, trends, regions, and segments poised for the fastest growth, competitive landscape.

Further, the report will provide the lithium-ion battery market size, demand forecast, growth rates, and trade (imports and exports).
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