Future of Batteries Market Growth Drivers and Opportunities 2035
The global future of batteries market is projected to grow from 16 million units in 2024 to 62 million units by 2035, at a CAGR of 12.7%.
Higher standard batteries have been introduced due to recent developments in the EV market. Even though new batteries should increase EV performance and range, consumers are still hesitant to pick EVs over internal combustion engine (ICE) vehicles due to a number of issues, including EVs’ short range, lengthy charging times, high cost, and scarcity of charging stations. Consequently, EV battery manufacturers are focusing on creating new batteries with innovative, quick, and rapid charging technologies to overcome these challenges. In addition, advances in manufacturing processes such as automation and creative assembly methods are being made to lower expenses and improve battery production’s scalability. This includes advancements in pack integration, cell assembly, and electrode fabrication. These developments are anticipated to have a lucarative impact on market expansion.
Advancements in battery technology
A number of companies have achieved significant advancements in EV battery technology, enabling EVs to become a competitive alternative to traditional automobiles. Continuous advancements in electric vehicle (EV) battery technology aim to increase the range of EVs. Most large EV battery manufacturers innovate in battery chemistry and design to increase EV range and reduce the need for frequent charging. The battery’s cathode chemistry is a major factor in its performance. Three major groups of cathode chemistries are currently in widespread use in the automobile industry: lithium nickel manganese cobalt oxide (NMC), lithium nickel cobalt aluminum oxide (NCA), and lithium iron phosphate (LFP). Because of their higher nickel content, NMC and NCA cathodes are in the most demand out of all of them. They provide high energy density. In addition, since 2020, LFP has gained popularity because of its nickel- and cobalt-free composition and the high cost of battery metals. Unlike hydroxide, which is used for nickel-rich chemistries, LFP uses lithium carbonate.
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Increase in R&D efforts toward creating more advanced battery chemistries
As the world moves toward adopting clean energy, battery manufacturers are increasing their R&D efforts to develop different battery chemistries. For instance, major players like Amprius Inc. (US) and Nexeon Corporation (UK) are developing silicon anode batteries with enhanced features. These advanced silicon anode batteries are expected to be widely adopted in the coming years. Tesla, Inc. (US) and Panasonic Holdings Corporation (Japan) are also researching and developing silicon anode and lithium-air batteries to power EVs. In June 2023, LG Energy Solution (South Korea) and NOVONIX (Australia) entered into a Joint Research and Development Agreement (JDA) to collaborate on the development of artificial graphite anode material for lithium-ion batteries. VARTA AG (Germany) is also involved in international research projects. Its R&D project, SintBat, aims to develop energy-efficient, cheap, and maintenance-free lithium-ion-based energy storage systems using silicon-based materials and new processing technologies.
As the market for eco-friendly vehicles grows, many manufacturers focus on developing reliable batteries for hybrid and plug-in hybrid EVs, resulting in significant investment in R&D. A growing number of R&D initiatives are expected to offer growth opportunities for EV battery manufacturers during the forecast period.
“North America to be the prominent growing market for EV batteries during the forecast period.”
The automotive sector in North America is one of the most developed worldwide. Major commercial automakers like Tesla, Proterra, MAN, and NFI Group are based in the region, which makes it well-known for its cutting-edge EV R&D, inventions, and technological advancements. These businesses are investing in constructing and expanding battery production plants in North America. To meet the growing demand for electric vehicles, these facilities produce sophisticated battery technology, including lithium-ion batteries. The US has historically led the way in technology in North America. Leading EV battery suppliers and startups have partnered with OEMs in the North American EV market. For example, GM and LG Chem have partnered.
On the other hand, Stellantis and Samsung SDI are working together to develop EV batteries. Additionally, Ford and SK Innovation are working together. Tesla produces its own EV battery products. These companies are working together to set up production facilities in the United States. Additionally, a number of state and federal laws and programs are promoting the use of EVs and the growth of the EV battery industry. This covers tax breaks for buying electric vehicles, capital expenditures for infrastructure related to charging, and battery research and development financing. In addition, OEMs are focusing more on introducing electric buses, vans, and trucks; this will likely result in a significant growth in the North American EV battery business. Another factor expected to propel expansion in the North American EV battery is the growing need for fleets of zero-emission freight and public transit vehicles.
Key Players
The major players in Future of Batteries market include CATL (China), BYD Company Ltd. (China), LG Energy Solution Ltd. (South Korea), Panasonic Holdings Corporation (Japan), and SK Innovation Co., Ltd. (South Korea). These companies adopted various strategies, such as new product developments and deals, to gain traction in the market.
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