The electric vehicle battery market is forecast to experience a growth of 8.5% CAGR over the estimated time, as per FMI's analysis. The industry's size is predicted to reach a market value of US$ 9,402.3 million in 2023.
The increasing transition toward electric vehicles (EVs) is expected to propel accelerated battery demand in leading automobile markets like the United States and Europe. Battery and automotive manufacturers are facing challenges owing to uncertainty related to the battery supply chain. Several players are considering constructing gigafactory or joining joint ventures to combat shrunken supply.
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The shift toward EVs can be attributed to adverse climactic change and increasing carbon emissions, especially in urban cities. The EV30-30 Scenario targets a surging value share of EVs to 30% by 2030 (excluding two/three-wheelers).
Favorable government policies to encourage EV sales are predicted to offer opportunities for battery makers of EVs. Additionally, technological advancements have spiked the energy density of lithium-ion batteries while reducing the overall price of lithium-ion batteries. As a result, propelling its uptake in li-ion powered EVs.
Surging investments for the upgradation of public charging infrastructure in conjunction with the rising efficiency of EVs are expected to create lucrative opportunities for manufacturers.
The high cost of EVs is expected to affect the uptake of batteries negatively. Gaps in demand and supply of essential raw materials like cobalt and a dearth of charging infrastructure are expected to limit the market growth.
Top Highlights from the FMI’s Analysis of the Electric Vehicle Battery Market:
- The United States electric vehicle battery industry is expected to attain a 28.7% market share in 2023. The dominant share of the country reflects the high establishment of the market and great prospects for future growth.
- Germany is expected to hold a 15.1% market share in 2023. The country is expected to attract key players from across the globe to expand its sales and drive product innovation.
- Japan contributes 5.3% to the global market. The regional market offers excellent potential for key participants’ growth.
- Australia's share in the market is as low as 1.4%. However, the country is expected to offer growth prospects to businesses that venture out.
- China is expected to expand robustly over the forecast period at a 9.6% CAGR.
- The Indian market is anticipated to expand at a CAGR of 9% in the forecast period.
- Under the battery type category, lead acid is expected to record a market share of 45.7% in 2023.
- Passenger cars are expected to hold a 22.2% market share in 2023.
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Key Developments in the Market
- CATL collaborated with Ford in February 2023 to develop a battery plant for EVs in the United States Michigan city. As a part of the agreement, Ford is expected to own the new unit of CATL. CATL is also predicted to assist Ford in accelerating the development of batteries.
- Clarios’ Optima introduced an all-new lithium-power sport battery line in November 2022. The line focuses on enhancing batteries for personal watercraft, motorcycles, utility task vehicles (UTV), snowmobiles, and all-terrain vehicles (ATVs).
- Honda Motor Company declared the development of a lithium-ion battery plant for EVs in the United States with the LG Energy Solution Ltd. in August 2022. The total investment in the project has been US$ 4.4 billion. The companies aim to develop about 40 GWh of batteries yearly to be exclusively used in North America’s Honda and Acura electric vehicles.
Competitive Landscape
LG Chem Ltd, BYD Company Limited, Panasonic Corporation, Tesla Motors, Inc., Samsung SDI Co, Ltd, and Narada Power Source Co., Ltd, among others, are some of the prominent players in the electric vehicle battery market profiled in the full version of the report.
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