The global electric vehicle battery market size was valued at USD 53.08 billion in 2022 and it is expected to hit around USD 276.40 billion by 2030 with a registered CAGR of 22.9% over the forecast period 2022 to 2030. APAC electric vehicle battery market was valued at USD 21.21 billion in 2022.
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A rechargeable battery powers the electric motors in an electric vehicle or hybrid electric vehicle. Many nations are starting to employ them more frequently. The battery is the key element in electric vehicle technology. Due to their significantly higher energy density as compared to weight, lithium-ion and lithium polymer batteries are typically seen in modern electric vehicles. Lithium, cobalt, manganese, steel, graphite and nickel are the main chemical components needed in lithium-ion batteries. Each of these parts performs a unique function in the conventional electric vehicle battery that enhances efficiency.
The global adoption of EVs is anticipated to be fueled by increased technological developments and falling battery prices. Additionally, the government has been obliged to enact severe rules regarding the reduction of carbon footprint and preservation of the environment due to the rising pollution levels and deteriorating environmental conditions. Therefore, the increased efforts to reduce car emissions are anticipated to increase demand for electric vehicles, which will therefore increase demand for EV batteries.
The global leading automotive manufacturers such as General Motors, BMW, Volkswagen, and Fords Motors are increasing their emphasis on rolling out various types of electric vehicles in the market. The rising awareness regarding the benefits of electric vehicles, surging popularity of the advanced electric vehicles, and the growing production volumes by the top automakers are the prominent factors that are driving the growth of the global EV battery market. The growing government initiatives to promote the adoption of EVs by incentivizing the manufacturers and by offering subsidies to the customers are positively driving the sales of the EVs.
The government policies to promote the establishment of charging stations through public-private partnerships are expected to boost the growth of the market in the forthcoming years. The rising investments in the urbanization and the growing government investments in the infrastructural development is expected to support the growth of the EV battery market in the foreseeable future. The rising advancements in the technologies and the declining battery prices is projected to fuel the adoption of the EVs across the globe.
Moreover, the rising pollution levels and deteriorating environmental conditions has forced the government to adopt strict policies regarding the reduction of carbon footprint and conservation of the environment. Therefore, the rising efforts to control the emission from vehicles are expected to spur the demand for the electric vehicles and subsequently the demand for the EV batteries is expected to grow.
Due to the growing need to reduce reliance on imported oil and the quickly diminishing fossil resources, there is an increase in demand for electric vehicles. Oil production costs are increasing, which makes it more expensive to import oil. As a result, countries that rely heavily on oil imports are forced to make substantial investments, placing economic strain on their economies. Because fuel cells, electricity, and batteries power EVs (Electric Vehicles), there is less reliance on foreign oil. Over the next few years, it is anticipated that this factor will accelerate the adoption of EVs. EV adoption is being fueled by their low emission levels, and this trend is anticipated to increase market revenue growth during the projection period.
In urban regions, where daily driving distances are shorter on average, smaller, more fuel-efficient cars are more common. By 2030, it's anticipated that more than 50% of the world's population will reside in urban areas, increasing demand for electric vehicles. The range of electric vehicles expands as battery technology advances. For people who commute a longer distance, EVs with longer range are more feasible. High-speed charging will also become a reality due to charger performance and battery advancements, minimizing downtime while driving. Thus, increasing demand for EVs will drive EV battery market.
FALLING PRICE OF LITHIUM-ION BATTERIES
Lithium-ion batteries are the primary power source for electric vehicles at the moment. Over 70% of the market for rechargeable batteries is made up of Li-ion batteries, according to 2018 research by the US International Trade Commission. Additionally, the cost of batteries per kilowatt-hour (kWh) has decreased to under $200. Battery prices are also predicted to fall below 100 USD/kWh in the upcoming years due to improvements in cell chemistry and battery pack production methods. Therefore, it is projected that a decline in the price of battery packs, which account for between 35% and 45% of the costs associated with making electric vehicles, will fuel the market's expansion.
The rise of Asia Pacific as a major center for global industry has increased the use of tools powered by lithium-ion batteries. In the next ten years, improved battery technology and lower costs will be achieved through continued R&D spending and supply chain capacity increase novel cathode materials and cell production techniques, silicon and lithium metal anodes, solid-state electrolytes, and others, to play a significant part in making these price cuts possible. In 2020, the percentage of electric vehicles (EVs) sold worldwide was only about 3.2%; however, this percentage is expected to rise during the next ten years, partly as a result of declining EV battery prices. Batteries are getting cheaper to build because of increased production and technological advancements, which puts EVs on a par with gas-powered vehicles.
The high cost of EV production has posed a serious obstacle to their widespread adoption. The predicted decline in battery costs and R&D spending will likely bring down the overall cost of buying electric hatchbacks, crossovers, or SUVs to levels equivalent to ICL vehicles, which would increase demand for EVs. The price of the cathode has a large impact on battery prices because raw elements like cobalt, nickel, lithium, and magnesium are quite expensive. Due to the costly process involved in manufacturing these vehicles, the cost of EV production is likewise much higher than that of ICE automobiles. Due to the need for batteries with higher specifications, complex technology demanded for manufacture, and extremely expensive components utilized in the vehicles, producing higher range electric vehicles is substantially more expensive.
A study found that building electric vehicles is becoming more expensive. Currently, the cost of each vehicle in raw materials is around $8,255. These expenses include the cobalt, nickel, and lithium needed to make EV batteries. Compared to the $3,381 cost of raw materials for an electric vehicle in March 2020, the price has increased by more than 140%. In the EV industry, ongoing supply chain disruptions and rising raw material prices go hand in hand. Given that Russia exports a sizable amount of some of the metals used to make battery cells, the situation in Ukraine has also added to the price increase.
Businesses are developing business models that enable consumers to switch out EV batteries after they are drained, such as battery swapping and battery-as-a-service (Baas). In contrast to a stationary charging station, where charging batteries takes time and requires expensive infrastructure, a battery-as-a-service model (BaaS) enables customers to swap out batteries quickly. BaaS is an asset-light, inexpensive, and quick-on-its-feet model. The upfront costs of EVs may decrease dramatically as a result of the BaaS model; for example, the expenses for two-wheelers may easily decrease by up to 20%. This reduces the amount of time users must spend charging their batteries, increasing customer happiness and resolving one of the primary barriers to EV adoption. Battery swapping at EV charging stations has increased since it saves EV customers' time from having to charge their batteries.
Despite the fact that the market for EV cars outside of China is still growing, it has demonstrated its potential. For instance, NIO expects to deploy about 4,000 more battery switching stations in China by 2025 after installing over 300 by July 2021. By July 2021, its battery swapping stations would have been used 2.9 million times worldwide, with about 1,000 more units slated for locations outside of China. In November 2021, Shell and NIO entered a contract to work together to build these battery-swapping EV charging stations. As a result, the battery now has a new chance to provide EV charging services.
|Market Size by 2030||USD 276.40 Billion|
|Growth Rate from 2022 to 2030||
CAGR of 22.9%
|Largest Market||Asia Pacific|
|Fastest Growing Region||North America|
|Forecast Period||2023 to 2030|
|Segments Covered||Battery Type, Vehicle Type, Propulsion, Li-ion Battery Component, Method, Capacity, Battery Form, Material Type, End User, Geography|
|Companies Mentioned||Hitachi, Sony, ATLASBX Co. Ltd., Narada Power Source Co., Ltd., TCL Corporation, Huanyu New Energy Technology, C&D Technologies, Inc., Duracell, Crown Battery Manufacturing, EnerSys, Inc., Panasonic, NEC Corporation, North Star, GS Yuasa Corp., BB Battery Co.|
The lithium-ion segment dominated the global EV battery market in 2022. The higher density of energy and the lightweight of the lithium-ion batteries are the most significant feature that has boosted the adoption of the lithium-ion batteries in the electric vehicles. The lithium-ion batteries are extensively used in the hybrid and electric vehicles across the globe. The rising popularity and growing sales of the hybrid and electric vehicles across the globe has resulted in the dominance of this segment in the global EV battery market.
Lead acid batteries are expected to gain rapid traction during the forecast period. This is attributed to the increasing popularity of the lead acid batteries as these batteries are much more economical as compared to the lithium-ion batteries. Furthermore, a huge cost is involved in the mining and refining of lithium and extensive mining may deplete the lithium resources. Hence, the lead acid batteries can offer a good alternative to the lithium-ion batteries. Therefore, this segment is expected to grow at the highest CAGR.
|By Battery Type||2021||2022||2030||CAGR (%)|
|Nickel-Metal Hydride Battery||2.75||3.25||16.14||22.2%|
Depending on the vehicle type, the passenger vehicle segment was the largest revenue contributor to the global EV battery market in 2022. The government of various countries like Canada, India, and Japan are offering subsidies to the consumers to encourage the adoption of the electric passenger vehicles. Furthermore, the demand for the passenger vehicles is expected to remain significant during the forecast period owing to the rising awareness regarding the benefits of EV, growing disposable income, improving standard of living, rising demand for personal commute solutions, and growing urbanization. The huge penetration of the passenger electric vehicles across the globe has resulted in the dominance of this segment.
The commercial vehicle is expected to be the most opportunistic segment during the forecast period. There is a rapidly growing demand for the commercial electric vehicles especially in the developing economies. The normal commercial vehicles emission is higher than the passenger vehicles and hence the government are planning to increasing adopt the commercial electric vehicles to reduce carbon emission. The rising efforts to electrify the commercial vehicle segment are expected to foster the growth of this segment during the forecast period.
|By Vehicle Type||2021||2022||2030||CAGR (%)|
Based on the propulsion, battery electric vehicle was the dominant segment in the global EV battery market in 2022 and garnered revenue share 38.5%. The battery electric vehicles totally depend on the batteries for functioning and hence this is the highest contributor to the EV battery market. The rapidly declining battery prices with the advancements in the battery technology are spurring the adoption of the BEVs across the globe. The growing production of BEVs across the globe is expected to further fuel the growth of the global EV battery market in the upcoming future.
Plug-in hybrid electric vehicle is the second largest segment in the global EV battery market. The number of PHEVs is more as compared to the BEVs. The hybrid nature of the PHEVs has made it more popular among the consumers. The rising adoption of the PHEVs and the rising traditional fuel prices are the major factors that may increase the demand for the EV batteries for use in the PHEVs and hence drive the growth of this segment.
|By Propulsion||2021||2022||2030||CAGR (%)|
|Battery Electric Vehicles||10.02||12.01||65.84||23.7%|
|Plug-in Hybrid Electric Vehicle||12.63||15.01||76.73||22.6%|
|Hybrid Electric Vehicle||15.38||18.34||96.49||23.1%|
|Fuel Cell Electric Vehicle||6.54||7.72||37.34||21.8%|
Asia Pacific was the largest EV battery market in 2022. The presence of top manufacturers in the region has facilitated the huge volume production of electric vehicles and EV batteries. The countries like China and India offers cheap labor and other factors of production and the pro-industrial government policies attracts huge investments from the top MNCs. The presence of huge consumer base in the region, growing demand for the electric passenger and commercial vehicles, rising investments in development of charging infrastructure, and growing government initiatives to promote the adoption of the electric vehicles are the prominent drivers of the Asia Pacific EV battery market.
The North America and Europe are expected to witness significant growth during the forecast period. The strict government regulations regarding the emissions and adoption of electric vehicles, high disposable income, and increased consumer awareness regarding the benefits of electric vehicles, high environment consciousness, and presence of top auto manufacturers in the region are the major factors that are expected to have a significant impact on the growth of the EV battery market in the foreseeable future. The increased demand for the sustainable products among the consumers and increased adoption of the advanced technologies is supporting the growth of the market in these regions.
Some of the prominent players in the global EV battery market include:
By Battery Type
By Vehicle Type
By Li-ion Battery Component
By Battery Form
By Material Type
By End User
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