Electric Vehicle Battery Market Size & Forecast
The Electric Vehicle Battery Market is projected to reach $415.9 billion by 2031, at a CAGR of 33.1% from 2024–2031. The growth of the electric vehicle Battery Market is driven by supportive government policies and regulations, decreasing battery prices, and increasing investment by leading automotive OEMs. However, the potential shortfall in lithium mining capabilities and the low energy density of lithium-ion Batteryrestrain the growth of this market.
Furthermore, increasing adoption of electric mobility in emerging economies, growing investments in developing lithium-ion battery capacity, and growing deployment of battery-as-a-service are expected to offer significant growth opportunities for players operating in the electric vehicle Battery Market. However, the potential safety issues in EV Batterymay hinder the growth of this market.
Supportive Government Policies and Regulations Driving the Adoption of Electric Vehicle Battery Market
Governments around the world are implementing policies and regulations to support EV adoption. Financial incentives, such as tax credits and rebates, are being offered to encourage consumers to purchase electric vehicles. These incentives are helping reduce the upfront costs of electric vehicles, making them more affordable for consumers. For instance, in July 2022, the Government of Chhattisgarh (India) announced an electric vehicle (EV) policy to help create robust EV charging infrastructure in the Indian state of Chhattisgarh, accelerate the transition from Internal Combustion Engine (ICE) vehicles to electric vehicles, and incentivize EV manufacturing. Many companies in the automotive industry are leveraging government policies and regulations and investing heavily in the development and production of electric vehicles as a part of their commitment to creating a more sustainable and environment-friendly future. The U.S. federal government under the Biden administration has shown a strong commitment to promoting EV adoption. For instance, in 2021, the U.S. federal government announced tax credits on the purchase of electric vehicles. Also, there were discussions about potentially expanding and extending these tax credits to further incentivize EV adoption.
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Key Findings in the Global Electric Vehicle Battery Market Study:
The Lithium-ion Battery Segment to Register the Higher CAGR
Based on type, the global electric vehicle Battery Market is broadly segmented into lithium-ion batteries, sealed lead acid batteries, nickel-metal hydride batteries, ultracapacitors, solid-state batteries, and other battery types. The lithium-ion battery segment is projected to register the highest CAGR during the forecast period. The growth of this market is attributed to its higher energy density, compactness, durability, and lightweight. Various automotive OEMs are increasingly partnering with battery OEMs to develop lithium-ion batteries, secure battery supply chains for their existing and upcoming electric vehicles, and achieve technology leadership in EV batteries. A lithium-ion (Li-ion) battery is a type of rechargeable battery that uses lithium ions as a key component of its electrochemistry. Lithium-ion Batteryhave a higher energy density than lead-acid Batteryor nickel-metal hydride batteries, due to which this type of battery can store more electricity in the same size cell as compared to other batteries. Also, various automotive OEMs are partnering with battery OEMs to develop EV Batteryand secure battery supply chains for their existing and upcoming electric vehicles and achieve technology leadership in EV batteries. For instance, In April 2024, German auto giant BMW Group partnered with Rimac Technology (Croatia) to develop high-voltage EV batteries. The battery tech will start making an appearance on BMW Group cars in the second half of the decade. In April 2024, Hyundai Motor Co (South Korea) and Kia Corp (South Korea) signed a memorandum of understanding with India's Exide Energy Solutions Ltd to supply Batteryfor their electric vehicles in a bid to boost competitiveness in the world's No.3 auto market. Under this partnership with Exide Energy, a unit of Exide Industries Ltd aims to localize their EV battery production in India, specifically focusing on lithium-iron-phosphate (LFP) cells.
The 101kWh to 300kWh Segment to Register the Highest CAGR
Based on battery capacity, the global electric vehicle Battery Market is broadly segmented into less than 50kWh, 51kWh to 100kWh, 101kWh to 300kWh, and more than 300kWh. The 101kWh to 300kWh segment is projected to register the highest CAGR during the forecast period. The growth of this segment is attributed to the rise in fuel prices and government initiatives for lowering fleet emissions of logistics and public transportation and the rise in fuel prices and government initiatives for lowering fleet emissions of logistics and public transportation.
The Laser Bonding Segment to Register the Highest CAGR
Based on bonding type, the global electric vehicle Battery Market is broadly segmented into wire bonding and laser bonding. The laser bonding segment is projected to register the highest CAGR during the forecast period mainly because laser-welded bonds can withstand higher currents, offer the advantages of narrow welds, high welding speed, and low level of heat, which is important for battery tab welding because the chemicals within the Batteryare heat sensitive.
The Pouch Segment to Register the Highest CAGR
Based on battery form, the global electric vehicle Battery Market is broadly segmented into prismatic, pouch, and cylindrical. The pouch segment is projected to register the highest CAGR during the forecast period. The growth of this segment is attributed to higher energy density compared with the same weight of prismatic cells, more safety performance, and lower internal resistance.
The Light Commercial Vehicle Segment to Register the Highest CAGR
Based on application, the global electric vehicle Battery Market is broadly segmented into electric cars, light commercial vehicles, heavy commercial vehicles, E-scooters & motorcycles, and E-bikes. Electric cars are further segmented into battery electric vehicles, plug-in hybrid electric vehicles, and pure hybrid electric vehicles. Heavy commercial vehicles are further segmented into electric buses and electric trucks. The light commercial vehicle segment is projected to register the highest CAGR during the forecast period. The growth of this segment is attributed to the increasing shift of retail MNCs and transport fleet operators to electric light commercial vehicles, growing awareness regarding the role of electric vehicles in reducing emissions, increase in demand for electric vehicles to reduce fleet emissions, and stringent government rules and regulations towards vehicle emissions. The mass production of Batteryand the attractive tax incentives offered by governments have further brought down vehicle costs, making electric light commercial vehicles much more cost-effective.
The Battery Swapping Stations Segment to Register the Highest CAGR
Based on end user, the global electric vehicle Battery Market is broadly segmented into electric vehicle OEMs and battery swapping stations. The battery swapping stations segment is projected to register the highest CAGR during the forecast period. The growth of this segment is attributed mainly to battery swapping services that help reduce EV acquisition costs, increase the battery lifespan, and increase battery swapping services by various automotive start-up companies. Also, other mobility stakeholders, such as oil refining companies, are partnering with E-mobility start-ups to set up battery-swapping stations, which will support the market growth of this segment.
Europe to be the Fastest-growing Regional Market
Based on geography, the electric vehicle Battery Market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. The European region is projected to record the highest CAGR during the forecast period. The growth of this market is attributed to various key players planning to launch numerous gigafactories in this region to meet the anticipated surge in demand for electric vehicles (EVs) and the high adoption of electric mobility. European governments are taking initiatives to promote EV adoption, with the European Battery Alliance setting an objective for 90% of Europe’s annual battery demand to be supplied from within the EU by 2030, according to a U.K. Parliament report. By 2030, Germany is expected to host the largest amount of battery manufacturing capacity in Europe. Eastern European countries like Hungary and Poland have also attracted significant investments from leading Asian battery manufacturers, partly due to cheaper land and labor in these countries and their proximity to the German car industry.
Electric Vehicle Battery Market: Competitive Analysis
The report includes a competitive landscape based on an extensive assessment of the key growth strategies adopted by leading players over the past three years. The key players operating in the global electric vehicle Battery Market are SK Innovations Co. Ltd. ( South Korea), LG Chem, Ltd (South Korea), Farasis Energy (GanZhou) Co., Ltd. (China), SVOLT Energy Technology Co., Ltd. (China), BYD Company Limited (China), Samsung SDI Co., Ltd. (South Korea), GS Yuasa International Ltd. (Japan), Vehicle Energy Japan Inc. (Japan), Northvolt AB (Sweden), Panasonic Corporation (Japan), Contemporary Amperex Technology Co. Limited (CATL) (China), A123 Systems, LLC (China), Exide Industries Ltd. (India), Primearth EV Energy Co., Ltd. (Japan), E-One Moli Energy Corp. (Taiwan), StoreDot Ltd. (Israel), NOHMs Technologies, Inc. (U.S.), Lithium Werks B.V. (Netherlands), Faradion Limited (U.K.), and QuantumScape Corporation (U.S.).
Electric Vehicle Battery Market Report Summary:
Particular
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Details
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Number of Pages
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290
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Format
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PDF
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Forecast Period
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2024–2031
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Base Year
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2023
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CAGR
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33.1%
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Estimated Market Size (Value)
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$415.9 billion by 2031
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Segments Covered
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By Type
- Lithium-ion Battery
- Sealed Lead Acid Battery
- Nickel-metal Hydride Battery
- Ultracapacitors
- Solid-state Battery
- Other Battery Types
By Battery Capacity
- Less Than 50kWh
- 51kWh to 100kWh
- 101kWh to 300kWh
- More Than 300kWh
By Bonding Type
- Wire Bonding
- Laser Bonding
By Battery Form
- Prismatic
- Pouch
- Cylindrical
By Application
- Electric Cars
- Battery Electric Vehicles
- Plug-in Hybrid Electric Vehicles
- Pure Hybrid Electric Vehicles
- Light Commercial Vehicles
- Heavy Commercial Vehicles
- Electric Bus
- Electric Trucks
- E-scooters & Motorcycles
- E-bikes
By End User
- Electric Vehicle OEMs
- Battery Swapping Stations
By Geography
- Asia-Pacific
- China
- Japan
- South Korea
- Taiwan
- India
- Thailand
- Indonesia
- Rest of Asia-Pacific
- Europe
- Germany
- France
- U.K.
- Norway
- Sweden
- Italy
- Spain
- Poland
- Hungary
- Rest of Europe
- North America
- Latin America
- Middle East and Africa
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Key questions answered in the report: