Global Lithium Batteries

Global Lithium Batteries

Global demand for lithium batteries is forecast to increase 17% per year to $119 billion in 2026, driven by the:

• development of the hybrid and electric vehicle (HEV) industry, as these vehicles increasingly penetrate the motor vehicle market
• proliferation of battery-powered options in products that historically used corded electric or gas powered technology

ICE Vehicle Phase Out Targets to Accelerate HEV Adoption
As part of their climate policies, governments in many higher-income nations have set targets for the full or partial phase out of new ICE car sales. The most important of these policies is an EU-wide regulation, adopted in June 2022, that will ban the sale of new ICE cars in member nations by 2035.

This policy will fuel rapid growth in battery demand throughout Europe, as countries in the region are expected to quickly transition their existing automotive plants to make EVs. Most of the nations that had previously adopted their own deadlines for phasing out ICE vehicles are in Western Europe, where many wealthy countries have already achieved significant EV penetration. Member states in Eastern Europe have less developed EV markets and are expected to face greater challenges, but they have the potential for very fast growth; several are also well-situated to become important manufacturers of lower-cost EVs, which will likely be an important contributor to meeting targets.

Among the other nations with important EV adoption targets are the US, China, Japan, and South Korea. China is the world’s largest EV producer, and it is expected to continue growing in importance. Meanwhile the US, Japan, and South Korea all have the financial resources to rapidly step up EV adoption.

Battery Power Continuing to Proliferate in Consumer Goods
Lithium-ion battery technology is continuing to gain market share in a wide variety of products as an alternative to gas-powered or corded electric designs. For example, batteries are increasingly common in power tools and power lawn and garden equipment. While battery power has already gained a significant foothold in handheld consumer models, the improving cost and performance profile of battery power is allowing for increased penetration in models used by professionals. As a result, growth in battery sales in these markets is expected to continue outpacing growth in the underlying markets.
Competition From Alternative Technologies to Increase

While lithium-ion batteries currently represent the dominant technology in most of their key growth applications, concerns about cost and lithium supply are driving battery firms to invest in alternative chemistries. Most notably, CATL intends to deploy sodium-ion batteries for the EV market by the end of 2023. This technology holds significant cost advantages over lithium-ion and could pose a serious competitive threat if its performance disadvantages can be managed. Flow batteries – a technology that shares characteristics with both fuel cells and conventional batteries – could also become a source of competition in the energy storage market.

Study Description
This Freedonia industry study analyzes the $52 billion lithium battery industry. It presents historical demand data (2011, 2016, and 2021) and forecasts (2026 and 2031) by product (primary lithium batteries, secondary lithium batteries), market (automotive, consumer, industrial and other), and region (North America, Central and South America, Western Europe, Eastern Europe, Asia/Pacific, Africa/Mideast). The study discusses the impact of the COVID-19 pandemic. The study also evaluates company market share and competitive analysis on industry competitors including CATL, LG Energy Solution, Panasonic, Samsung SDI, and TDK.
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