New York, July 10, 2023 (GLOBE NEWSWIRE) -- The global electric vehicle battery market is estimated to grow at a CAGR of ~22% from 2023 to 2035. The market is estimated to garner a revenue of ~USD 624.07 Billion by the end of 2035, up from a revenue of ~USD 57.4 Billion in the year 2022. As governments around the world become more aware of the environmental and economic benefits of electric vehicles, they are offering incentives to encourage the use of these vehicles. This has caused a surge in demand for electric vehicles, which in turn has caused an increase in the production of electric vehicle batteries. This increased production has led to a dramatic increase in the global EV battery market.
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The International Energy Agency reports that electric cars sold nearly doubled in 2020, reaching 6.6 million, making the total number on the road 16.5 million. A 4 percent increase in electric car sales was recorded in 2021. Electric cars will account for 60% of new car sales by 2030, according to the Net Zero Emissions by 2050 scenario. Moreover, electric vehicle batteries are one of the most important components of electric vehicles, and the growth in production volumes will create a higher demand for these components. Furthermore, advancements in battery technology such as longer range and shorter charging times are expected to further drive the growth of the electric vehicle battery market, as newer, more efficient batteries are being developed.
Global Electric Vehicle Battery Market: Key Takeaways
- Market in Asia Pacific to propel highest growth
- Passenger cars are predicted to grow at a high rate in the coming years
- Market in North American to grow at a highest rate
Growing Preference for Zero-Emission Vehicles Owing to Rising Environmental Concerns to Boost Market Growth
The shift in preference is being driven by increasing awareness of the environmental consequences of burning fossil fuels. This has led to governments all around the world incentivizing the purchase of electric vehicles and the development of alternative fuels in order to reduce the environmental impact of transportation. In a recent report, it was reported that a conventional passenger vehicle emits approximately 5 metric tons of carbon dioxide each year. Furthermore, according to the International Organization of Motor Vehicle Manufacturers, road transport accounts for about 16% of man-made carbon dioxide emissions worldwide. Electric vehicles are powered by batteries that store energy from renewable sources such as solar and wind. This means they produce no emissions when running and are therefore much more environmentally friendly than traditional combustion engine vehicles that produce high levels of carbon dioxide emissions. Furthermore, consumers are increasingly aware of the environmental and health benefits associated with zero-emission vehicles. As such, they are actively looking to purchase vehicles that are fuel-efficient and produce fewer emissions. Moreover, governments around the world are providing incentives such as tax credits and subsidies to promote the adoption of electric vehicles, which is anticipated to fuel the market growth over the forecast period. The US Department of Energy offers federal tax credits worth USD 2,500 to USD 7,500 for some all-electric and plug-in hybrid vehicles. There are also many states in this region that offer incentives for purchasing new electric vehicles.
Global Electric Vehicle Battery Market: Regional Overview
The global electric vehicle battery market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Rising adoption and Production of Electric Vehicles to Drive the Growth in the Asia Pacific Region
The electric vehicle battery market in Asia Pacific region is estimated to garner the largest revenue by the end of 2033 owing to the presence of a large number of EV battery manufacturers in the region, coupled with the increasing demand for EVs in China, Japan, and South Korea. In addition, supportive government policies and incentives to encourage EV adoption in these countries, as well as the increasing adoption of EVs in the region, are expected to drive the growth of the EV battery market. According to the International Energy Agency, China is the world's top producer of electric vehicles. As of 2020, almost 1300 thousand electric cars have been registered in China, up from almost 1000 thousand in 2019. Furthermore, a number of major lithium-ion cell manufacturers in China, such as BYD Co., Ltd., Hefei Guoxuan Hi-Tech Power Energy Co., Ltd, and Tianjin Lishen Battery Co., Ltd, along with its large consumer base and availability of cost-effective raw materials and labor, are predicted to drive regional market growth in the years to come. It was observed that the total production of Li-ion batteries in China in 2021 reached 324GWh, an increase of 105 percent from the year before. This has enabled car manufacturers to use Li-ion batteries in their electric vehicles, leading to an increase in EVs production.
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Rising Investments for Development of New Battery Technologies to Drive the Growth in the North America Region
The electric vehicle battery market in North America region is estimated to garner highest CAGR by the end of 2033. The US government has implemented regulations and incentives to drive the adoption of electric vehicles. These include providing tax credits and subsidies to people who purchase electric vehicles, as well as providing incentives for companies to invest in electric vehicle infrastructure. These incentives have made electric vehicles more affordable and accessible, which has driven up demand in the North American region. Moreover, automotive OEMs in region are investing heavily into the research and development of new battery technologies, such as lithium-ion batteries, to increase the range and reduce the cost of electric vehicles. This increased investment is expected to drive the electric vehicle battery market over the forecast period. For instance, General Motors (U.S.), an automotive company, and LG Chem invested more than USD 2.3 billion in the construction of a second battery cell plant in Tennessee for electric vehicles in April 2021. This plant will support the production of General Motors' upcoming Cadillac Lyriq Crossover as well as other in-development EVs. Also, the cost of batteries has decreased significantly over the years owing to improved manufacturing efficiency and economies of scale in North America. As a result, electric vehicles have become much more affordable and have increased in demand in countries such as the United States and Canada. In turn, this has increased the adoption rate of EV batteries, which is expected to drive regional market growth.
Electric Vehicle Battery Segmentation by Vehicle Type
- Commercial Vehicles
- Passenger Vehicles
The passenger vehicles segment is anticipated to hold the largest revenue by the end of 2033. The increase in population is driving the demand for personal vehicles, as they are seen as a necessity for many people. Additionally, with the increased availability of car loans, more people are now able to purchase vehicles, increasing the demand for passenger vehicles even further. According to the International Energy Agency, the popularity of electric cars is on the rise, with a projected 13% of new cars being sold as electric in 2022. Moreover, the electric passenger car segment consists of the most popular EVs, such as electric cars, vans, and SUVs. The growth of this segment is also driven by the increasing adoption of electric vehicles as an alternative to conventional vehicles, as well as government initiatives to promote the adoption of electric vehicles. As people become more aware of the environmental and financial benefits of electric vehicles, they are increasingly turning to them as an alternative to traditional gasoline-powered vehicles. The increasing urbanization and disposable incomes of people also contribute to the demand for passenger vehicles.
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Electric Vehicle Battery Segmentation by End User
- Electric Vehicle OEMs
- Battery Swapping Stations
- Hybrid Electric Vehicle (HEV)
- Battery Electric Vehicle (BEV)
- Plug-In Hybrid Electric Vehicle (PHEV).
The hybrid electric vehicle (HEV) segment is anticipated to hold the largest revenue by the end of 2033 backed by their higher efficiency and cost-effectiveness compared to traditional vehicles, and their more flexible charging options. They also do not require access to charging stations in order to function, allowing them to be used in more remote locations. Additionally, the sales of hybrid vehicles owing to their increasing popularity are expected to fuel segment growth in the future. It was observed that approximately 245,000 hybrid and plug-in hybrid electric vehicles were sold in the United States between April and June 2022. Moreover, the electric motor in a hybrid electric vehicle helps to reduce fuel consumption by providing power for acceleration and to assist the internal combustion engine. With the cost savings and environmental benefits, hybrid electric vehicles are becoming increasingly popular in the trucking and commercial vehicle markets.
Electric Vehicle Battery Segmentation by Battery Type
- Lead-Acid Battery
- Lithium-ion Battery
- Sodium-ion Battery
- Nickel-Metal Hydride Battery
- Others
Electric Vehicle Battery Segmentation by Method
- Wire Bonding
- Laser Bonding
Electric Vehicle Battery Segmentation by Capacity
- <50kWh
- 50 – 110 kWh
- 111 – 200 kWh
- 201 – 300 kWh
- > 300 kWh
Few of the well-known market leaders in the electric vehicle battery market that are profiled by Research Nester are Nissan Motor Co., Ltd., Contemporary Amperex Technology Co., Limited, Panasonic Holdings Corporation, LG Chem, BYD Company Limited, Hitachi, Ltd., Samsung SDI Co., Ltd., GS Yuasa Corporation, Mitsubishi Electric Corporation, GSR Ventures, and other key market players.
Recent Development in the Electric Vehicle Battery Market
- In a partnership with Renault Group and Mitsubishi Motors Corporation, Nissan Motor Company Ltd. and Renault Group have announced the launch of the Kei or mini electric vehicles. This is part of the companies' plan to reduce greenhouse gas emissions and provide more sustainable, affordable transportation solutions. The Kei vehicles are designed to reduce emissions, improve fuel efficiency and be more affordable than traditional vehicles.
- In collaboration with Solaris Bus & Coach sp.z.o.o., Contemporary Amperex Technology Co., Limited is all set to enhance battery supply and electrification of European city transportation. Solaris Bus & Coach sp.z.o.o. has been a leading manufacturer of electric buses in Europe for over twenty years. By teaming up with CATL, a global leader in advanced battery technologies, the two companies are hoping to create a new standard of energy efficiency and sustainability for city transportation.
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