Global Electric Vehicle (EV) Battery Market Size & Growth Trends Analysis Report

There is a corresponding increase in demand for EV batteries to match the global spike in EV sales. Supportive government programs encouraging electrification to lessen dependency on fossil fuels and fight climate change are the main forces behind this development globally. Government programs encouraging the use of electric vehicles (EVs) and increasing demand for EV batteries include tax breaks, subsidies, and pollution controls. The trend toward greener transportation is also being fueled by consumers' growing environmental consciousness, which is encouraging EV adoption and expanding the market for electric car batteries. Leading automakers' emphasis on long-range, high-capacity electric vehicles (EVs) is anticipated to increase demand for a variety of battery types, including lead acid, nickel-metal hydride, and lithium-ion.

Government regulations around the globe have helped sustain the electric vehicle market even amid the COVID-19 pandemic and the downturn in the automotive industry. Furthermore, ongoing technology developments are making EVs more appealing and supporting market expansion. Examples of these developments include improvements in energy density and charging speed. The market for EV batteries is also expanding due to the falling costs of battery manufacture, the expansion of charging infrastructure, and changing consumer preferences for quieter operation and reduced operating costs.

Several restrictions influence the growth trajectory of the global EV battery market. Potential customers may be disappointed by the initial high price of electric vehicles compared to conventional vehicles. Especially in less developed areas, concerns about smaller vehicles and access to charging systems hamper adoption and increase range concerns. Battery technology continues to face the challenges of strong capacity, long charging times and lifetime, which even with recent improvements impact the overall EV industry. The battery business faces additional constraints from supply chain risks, such as raw material changes, safety concerns about battery fires, and ambiguities over regulations. These obstacles need to be overcome to increase the adoption and sustainability of electric vehicles and their batteries worldwide.

Impact of COVID-19

The COVID-19 outbreak affected the global EV battery market in several ways. Due to supply chains and lower consumer spending; production and demand slowed at first. But as the economies grew after the lockdown relaxations, more emphasis was placed on environmentally friendly and sustainable transportation, which in turn increased the demand for EVs and EV batteries. The market has been supported by government stimulus policies, electric vehicle subsidies and sustainable energy initiatives. Despite some recent challenges, the EV battery market is expected to grow over the long term.

Segmentation

The global EV battery market is segmented into battery type, vehicle type, and propulsion type. By battery type the market is further segmented into lithium-ion battery, lead-acid battery, and others. Lithium-ion batteries dominate the EV market due to their high energy density and affordability. A not unpopular battery in modern EVs, nickel metal hydride batteries, are still available in some battery hybrids. Solid batteries are still in the development phase as they promise a future, but offer advantages such as increased capacity and greater security. By vehicle type the global EV battery market is segmented into two-wheeler, passenger cars, buses, and others. Segmentation by vehicle type allows companies to tailor their supply chain to the specific needs of a particular segment. For example, commercial vehicles may demand longer battery life and faster charging, while two-wheelers prioritize compactness and cost-effectiveness. By propulsion type, the market is segmented into Battery Electric Vehicles (BEVs),and Plug-in Hybrid Electric Vehicles (PHEVs). In 2023 BEVs had the largest market share and are predicted to maintain their dominance with the highest Compound Annual Growth Rate (CAGR) over the forecast period. Companies can use this segmentation criteria to develop targeted marketing strategies, increase productivity efforts, and better meet customer needs in the EV Battery market.

Regional Analysis

The Asia-Pacific region dominated the global EV battery market in 2023 and is expected to maintain this position in the near future. The significant growth in EV sales in China is a key driver for the expansion of the market in this region. China’s electric car registration reached 8.1 million in 2023 and is expected to continue to sell the world's largest number of electric cars in the upcoming years. China has set lofty goals for the adoption of electric vehicles, which has led to a demand for batteries from manufacturers such as CATL (Contemporary Amperex Technology Co. Limited). Major automakers throughout the world receive battery supply from CATL, which is growing its production capacity to keep up with demand. This increased demand for electric vehicle batteries is expected to spur market growth and cater to the growing sales in China. Furthermore, China plays an important role in the global electric vehicle battery supply chain, and market momentum is poised to drive the trend for local manufacturing of battery components, components, and components in China and APAC other economies such as India, Japan, and South Korea.

Europe accounted for the second largest market share by 2023, driven by increasing regulations on carbon emissions and efforts to combat climate change, which are expected to spur the adoption of electric vehicles (EV), which in turn, is set to increase demand for batteries as well. Additionally, supportive regulatory frameworks with subsidies, incentives, and tax benefits for EV adoption in European countries are poised to drive market expansion in the region. Important participants in the sustainable battery production for the electric vehicle market include Northvolt in Sweden. To ensure sustainability, challenges include lowering reliance on imported raw materials and improving the infrastructure for battery recycling.

North America continued to hold a sizable portion of the market in 2023, helped by Americans' increasing inclination for battery-electric vehicles (BEVs), which fueled the market's growth. In 2023, the U.S. government announced a USD 15.5 Billion package to support the transition of existing manufacturing facilities retooled to electric vehicle-centric. The U.S. government is stepping up efforts to support localized component production and strengthen the EV supply chain through increasing investment, with a focus on lowering dependency on Chinese supply chains. This will help to propel future growth in the regional market. With its Gigafactory located in Nevada, Tesla is a prominent player in the large-scale production of lithium-ion batteries. This facility benefits the larger EV ecosystem in the area in addition to supporting Tesla's electric vehicle production.

Competitive Analysis

Market players are constantly concentrating on developing new items, improving their current portfolios, and broadening their company plans. The key players in The EV battery market are Contemporary Amperex Technology Co., Ltd. (CATL), LG Energy Solution, BYD Company Ltd., Panasonic Corp., SDI Co., Ltd., SK Innovation Co., Ltd., Toshiba Corporation, EnerSys, Inc., Hitachi, Ltd., Mitsubishi Corp., among others.

The role of strategic partnerships in propelling market expansion is growing. To advance the development of electric vehicles with replaceable batteries, for example, Sinopec, China National Petroleum Corporation (CNPC), SAIC, a Chinese automaker, and Contemporary Amperex Technology Co., Limited formed a joint venture in October 2022.

Similarly, an announcement was made in April 2023 by the Hyundai Motor Group and SK Innovation Co.'s battery business, SK On Co., Ltd., of their desire to form a joint venture for the production of electric vehicle battery cells in the U.S. serves as an illustration of this. The facility is expected to start producing in the second half of 2025 and have an annual production capacity of 35 GWh, which is enough to enable the production of 300,000 electric vehicles.

In 2023, The U.S. company Jabil Inc. and the Chinese automaker BYD reached an agreement for BYD Electronics to purchase its manufacturing operations in China. This action represents BYD's calculated growth inside China's tech sector.

Significant early-stage venture capital investments in businesses specializing in novel battery chemistries have recently emerged in the battery industry. Examples of these businesses include WeView in China (USD 90 million), XL Batteries and Noon Energy in the US (USD 30 million and USD 10 million, respectively), and VFlow Tech in Singapore (USD 10 million), all of which are redox-flow battery specialists. Furthermore, Ascend Elements in the US raised expansion equity capital of USD 540 million for battery recycling intending to establish the leading cathode precursor manufacturing facility in North America. Other noteworthy investments include the USD 40 million secured by the French business MECAWARE and the USD 140 million raised in series A funding by Tianneng New Materials in China.

On April 19, 2023, CATL debuted its cutting-edge Condensed Battery technology at Auto Shanghai. This state-of-the-art battery technology, with an amazing energy density of up to 500 Wh/kg, strikes an amazing compromise between high energy density and safety, opening the door for a new age of electrification in passenger aircraft. Condensed battery production can be quickly scaled up using CATL, allowing for quick mass production.

In 2024, battery switching stations will be introduced by LG Energy Solution; 20 of them are currently in use in Seoul. The company hopes to become a leader in battery-related software and services as well as battery manufacture and sales with this move. Similarly, For its Advanced Solid-State Battery (ASB) division, Samsung SDI has set up the ASB Commercialization Team, a dedicated control center. At the Samsung SDI R&D Center in Suwon, a pilot line for all solid-state batteries was erected last year, and prototype samples are currently being produced.

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The global electric vehicle (EV) battery market is segmented as follows:

By Battery Type (Revenue: USD Billion, 2019 – 2031)
●    Lithium-Ion Battery
●    Lead-Acid Battery
●    Others

By Vehicle Type (Revenue: USD Billion, 2019 – 2031)
●    Two-Wheeler
●    Passenger Car
●    Buses
●    Others

By Propulsion Type (Revenue: USD Billion, 2019 – 2031)
●    Battery Electric Vehicles (BEVs)
●    Plugin Hybrid Electric Vehicles (PHEVs)

By Region (Revenue: USD Billion, 2019 – 2031)

● North America
o U.S.
o Canada
o Mexico

● Europe
o U.K.
o France
o Germany
o Italy
o Spain
o Rest of Europe
 
● Asia Pacific
o China
o Japan
o India
o South Korea
o South East Asia
o Rest of Asia Pacific

● Latin America
o Brazil
o Argentina
o Rest of Latin America

● Middle East & Africa
o GCC Countries
o South Africa
o Rest of Middle East & Africa