According to a new market research report published by Meticulous Research, the Electric Vehicle (EV) Battery market is expected to grow at a CAGR of 26% from 2021 to 2028 to reach $175.11 billion by 2028. EV batteries are used to power the electric motors of battery electric vehicles (BEVs) or hybrid electric vehicles (HEVs). These batteries are made up of numerous cells put into a module frame to protect them from external shocks, such as heat or vibration. They have high power and energy density to provide an optimal driving range to the vehicles.
The growth of the overall EV battery market is driven by the increasing adoption of EVs worldwide, decreasing battery prices, and increasing investment by leading automotive OEMs. Moreover, increasing adoption of electric mobility in emerging economies, growing investments in developing lithium-ion battery capacity, and growing deployment of battery-as-a-service provide significant opportunities in this market. However, the potential shortfall in lithium mining capabilities and less energy density of batteries obstruct this market’s growth to some extent. In addition, potential safety issues in EV batteries are challenging the growth of the EV batteries market.
Geographically, the Asia-Pacific region accounted for the largest share of the global EV batteries market in 2021. The large share of this market is mainly attributed to the increasing adoption of electric vehicles in this region, a growing number of start-ups offering numerous battery solutions, a higher concentration of lithium reserves in China, the leadership of China in global EV battery manufacturing capacities, a higher concentration of global EV battery OEMs in the region, and increasing investment by leading battery OMEs for setting up battery manufacturing capacities in emerging economies of the region such as Thailand, Indonesia, and India.
China is one of the top battery manufacturers by volume. Lithium is a dominant component in battery production. This drives the production of EV batteries in China. According to Benchmark Mineral Intelligence (U.K.), Chinese chemical companies are accounted for 80% of the output raw material for advanced batteries. Major key players in the EV batteries market are taking the initiative to promote battery manufacturing in the country. For instance, in June 2021, CATL (China) extended a lithium-ion battery supply deal with Tesla to 2025. Tesla is manufacturing Model 3 and Model Y sport-utility vehicles in Shanghai, China, for which CATL would be supplying batteries. Furthermore, in February 2021, CATL (China) invested USD 4.49 billion to build or upgrade battery factories to meet growing demand. Also, in August 2021, CATL raised USD 9.0 billion to fund six projects to increase the production of lithium-ion batteries.
The six projects will include the construction of new giga factories in China’s Fujian, Zhejiang, and Guangdong provinces and the expansion of existing plants. Also, growing government initiatives, increasing availability of charging infrastructure, growing strategic business developments by energy companies, rising fuel prices, and rising awareness regarding environmental concerns are boosting the demand for electric vehicles in China.
The top five players that dominated the global EV batteries market were LG Chem, Ltd, Contemporary Amperex Technology Co. Limited (CATL), Panasonic Corporation, Samsung SDI Co., Ltd., and BYD Company Limited. The other players operating in the EV batteries market are SK Innovations Co. 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), 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.) among others.