Edited by Managing Editor Dianna Brodine
The global EV batteries market size was valued at 16 million units in 2024 and is expected to reach 62 million units by 2035, at a CAGR of 12.7%, during the forecast period 2024-2035, according to the Future of EV Batteries Market by Type, Battery Form, Packaging and Region – Global Forecast 2035 report from MarketsandMarkets. Changes in lithium-ion (Li-ion) battery chemistry are leading to more efficient electric vehicles (EVs) as the industry switches from toxic metals such as nickel-manganese-cobalt (NMC) to lithium-iron-phosphate (LFP).
Further, research into solid electrolytes is progressing and promising significant advantages over traditional liquid electrolytes, including higher energy density, lighter construction, faster charging, extended range and longer life cycles. Thus, the overall future of EV batteries largely is expected to witness newer, cleaner and cheaper battery chemistries and modular designs.
Solid-state batteries to increase adoption
The rapid progress made in EV battery technology has played a huge role in the emergence of this global battery market. Electric vehicles still are in high demand due to increasing consumer interest in more sustainable and efficient transportation options. Manufacturers and researchers constantly are working to improve battery technology by solving problems related to energy density, charging time, cost, cleaner materials and safety issues. The development of solid-state batteries is one such milestone. Unlike traditional lithium-ion batteries that use a liquid or gel electrolyte, solid-state batteries use a solid electrolyte, resulting in increased energy density, faster charging and better safety. These improvements have the potential to significantly extend EV range and shorten charging times, addressing concerns that have hindered widespread adoption.
Supply chain concerns may limit production
The limited supply of raw materials, such as lithium, cobalt and nickel, is a major restraining factor for the future of EV batteries market. These materials are critical for making batteries that have advanced specifications, but geographic, environmental and political items typically limit their extraction and processing. Growing sales of EVs put a strain on these resources; this may lead to interruptions in supply chains or higher costs or even both.
Recycling rears its head
By extracting valuable components from batteries nearing the end of their beneficial lives, recycling gives a sustainable alternative to relying on risky mining practices and unstable global supply chains. This helps to maintain material sources and promotes a circular economy by reusing materials, improving resource efficiency and lowering the carbon impact of producing new batteries.
The European Union (EU) has some laws governing EV battery recycling. From 2030, batteries must contain a minimum recycled content of 12% for cobalt, 4% for lithium, 4% for nickel and 85% for lead. By 2035, these thresholds will increase to 20% cobalt, 10% lithium, 12% nickel and 85% lead.
Performance diminishment must be managed and mitigated
As batteries age, their capability diminishes due to reduced riding range and increased charging frequency, which could deter potential EV customers interested in long-term performance and resale price. This degradation also pressures producers to manufacture extra durable batteries with longer lifespans, doubtlessly increasing research and manufacturing costs.
Additionally, the secondary market for degraded batteries, such as power storage or recycling, becomes extra vital, influencing supply chain dynamics and the overall economics of battery production and disposal. Consequently, managing and mitigating overall performance degradation is pivotal for the growth and sustainability of the EV market.
Passenger cars to drive expected growth
The global shift toward electric-powered mobility, pushed by environmental concerns and stringent emissions guidelines, substantially has boosted the demand for electric cars. Additionally, improvements in battery technology, consisting of developing high-power-density lithium-ion batteries, have made EVs extra realistic and less costly for the common purchaser. And, the availability of incentives and subsidies for EV purchases encourages the adoption of electric passenger vehicles. In addition, the significant charging infrastructure being advanced globally mainly helps passenger cars, making them more convenient for daily use. As a result, the passenger segment dominates the future of EV batteries marketplace, with their growing popularity expected to continue driving demand in the forecast period.
Europe invests heavily in the future of EV batteries market
Various European countries have set a bold goal of reducing 80% of CO2 emissions by 2030-2035 and have created a roadmap. The governments of numerous European countries also are subsidizing EV infrastructure, thereby boosting EV sales and batteries. The increasingly more stringent guidelines related to environmental troubles are propelling key players to test and develop advanced automobiles, intending to further strengthen the market for advanced battery technologies.
European countries also invest heavily in charging infrastructure, easing range issues and encouraging consumers to adopt electric vehicles. For instance, in March 2024, Northvolt AB (Sweden) started constructing a battery plant in northern Germany to supply electric cars, capping an intense lobbying effort under newly relaxed European Union state aid rules. In addition, Europe has a well-established automotive industry with corporations, including Volkswagen, BMW and Renault, heavily investing in electric automobile generation.
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Li-Ion batteries need faster charging, longer lifespans: Future Markets, Inc.
The lithium-ion battery market has experienced remarkable growth in recent years, driven by the increasing demand for energy storage solutions across various sectors, particularly in electric vehicles (EVs) and renewable energy applications, according to a report from Future Markets, Inc. (www.futuremarketsinc.com).
The current lithium-ion battery market is dominated by well-established players that have made significant strides in improving the performance and cost-effectiveness of these batteries. However, the industry also is witnessing the emergence of innovative technologies that go beyond traditional lithium-ion chemistries, promising even greater advancements in energy storage capabilities. One of the most promising developments in the advanced battery market is the rise of lithium-metal anodes. Lithium-metal batteries have the potential to offer significantly higher energy densities compared to conventional lithium-ion batteries, thanks to the use of metallic lithium as the anode material.
Another area of intense research and development is lithium-sulfur (Li-S) batteries. Lithium-sulfur chemistry offers the promise of even higher energy densities, as well as the potential for lower cost due to the abundance and relatively low price of sulfur. Beyond lithium-based systems, the advanced battery market is also witnessing the emergence of alternative chemistries, such as sodium-ion (Na-ion) and zinc-ion batteries. These technologies can provide cost-effective and potentially safer alternatives to lithium-ion, particularly in applications where high energy density is not the primary concern, such as stationary energy storage and grid-scale applications.
While lithium-ion batteries are expected to maintain their dominance in the near to medium term, the next decade will likely see a diversification of battery technologies to meet the increasingly diverse and demanding needs of the energy storage market. One key driver of this market evolution will be the continued push for higher energy density and faster charging capabilities, particularly in the EV sector. As consumers demand longer driving ranges and quicker recharge times, the race to develop the next generation of high-performance battery technologies will intensify.
The increasing global competition for critical raw materials, such as lithium, cobalt and nickel, has highlighted the need for diversified and resilient supply chains. This, coupled with the push for energy independence and national security concerns, will likely accelerate the development of battery technologies that rely on more abundant and locally available resources, such as sodium and zinc.