North America Lithium-Ion Market Outlook to 2028

North America Lithium-Ion Market Overview

The North America Lithium-Ion Market reached a valuation of USD 18 billion in 2023, driven by the increasing adoption of electric vehicles (EVs) and the expanding need for energy storage systems. The market's growth is further fueled by government initiatives aimed at reducing carbon emissions and promoting clean energy solutions.

Key players in the North America Lithium-Ion market include Tesla, Panasonic, LG Energy Solution, Samsung SDI, and CATL. These companies have established a strong presence in the market through their extensive production facilities, strategic partnerships, and continuous innovations in battery technology.

Cities like San Francisco, Detroit, and Toronto dominate the North America Lithium-Ion market due to their advanced infrastructure, concentration of industrial activities, and proximity to key battery manufacturers. San Francisco leads in innovation and clean energy adoption, while Detroits automotive industry drives significant demand for EV batteries

In 2023, Tesla announced the expansion of its Gigafactory in Nevada, with a focus on increasing the production of its next-generation 4680 battery cells. This expansion is part of Teslas strategy to meet the growing demand for EVs and energy storage solutions in North America. The facilitys increased capacity is expected to significantly enhance Teslas market share in the region.

North America Lithium-Ion Market Segmentation

By Application: The North America Lithium-Ion Market is segmented by application into Electric Vehicles (EVs), Consumer Electronics, and Energy Storage Systems. In 2023, the Electric Vehicles segment dominated this market due to the rapid growth of the EV industry in North America. The increasing consumer preference for EVs, driven by government incentives and advancements in battery technology, has made this segment the largest in the market.

By End-User Industry: The market is segmented by end-user industry into Automotive, Consumer Electronics, and Industrial Applications. The Automotive industry led this segment in 2023, driven by the surge in electric vehicle production and the increasing shift towards electrification in transportation. The Consumer Electronics segment follows closely, fueled by the high demand for portable devices that rely on lithium-ion batteries.

By Region: The North American lithium-ion Market is primarily dominated by regions in the United States and Canada, each contributing significantly to the market's growth due to their strong industrial presence and supportive government policies. In the United States, states like California, Michigan, and Texas are key players. California leads the market with its aggressive clean energy policies and substantial investments in electric vehicle (EV) infrastructure, making it a hub for EV manufacturers and battery production.

North America Lithium-Ion Market Competitive Landscape

Company

Establishment Year

Headquarters

Tesla, Inc.

2003

Palo Alto, CA, USA

Panasonic Corporation

1918

Osaka, Japan

LG Energy Solution

2020

Seoul, South Korea

Samsung SDI

1970

Suwon, South Korea

CATL

2011

Ningde, China

Panasonic Energy of North America (PENA) announced the delivery of its 10 billionth lithium-ion cell from its Sparks, Nevada battery plant in August 2024. This milestone reflects the company's commitment to advancing sustainable energy solutions and innovation in the lithium-ion battery sector, which is increasingly vital due to the rising demand for electric vehicles and energy storage systems in North America.

In February 2024, LG Energy Solution signed a significant offtake agreement with Wesfarmers Chemicals, Energy and Fertilisers (Wes CEF) to secure a stable supply of lithium concentrate from the Mt. Holland lithium project in Australia. This agreement will provide LG with up to 85,000 tons of lithium concentrate in 2024, which is essential for producing approximately 11,000 tons of lithium hydroxide, a key component in battery production.

North America Lithium-Ion Industry Analysis

North America Lithium-Ion Market Growth Drivers

Increased Demand from Electric Vehicles (EVs): The North American lithium-ion battery market is significantly driven by the rising demand for electric vehicles. In 2023, United States sold 1.3 million electric vehicles, representing about10% of total new vehicle sales. This marks a20% increasecompared to 2022.

Growth in Renewable Energy Storage Solutions: The increasing integration of renewable energy sources, such as solar and wind, into the energy grid is creating a heightened demand for energy storage solutions. In 2022, the United States installed over4 gigawattsof energy storage capacity, which represents a significant increase compared to previous years. This figure indicates growth from approximately1 gigawattadded in 2021, marking an increase of about400%.

Expansion of Manufacturing Capacity: To meet the growing demand for lithium-ion batteries, major manufacturers are expanding their production capacities across North America. In 2023, LG Energy Solution announced a USD 3 billion investment to expand its battery manufacturing plant in Michigan. This announcement builds on a prior $1.7 billion investment made in March 2022, which aimed to significantly increase the plant's capacity.

North America Lithium-Ion Market Challenges

Competition and Market Saturation: As the lithium-ion battery market continues to grow, competition is becoming increasingly fierce. A multitude of new entrants are emerging, which could result in oversupply in specific segments. This saturation may lead to decreased prices and reduced profit margins, posing challenges for companies striving to maintain sustainable operations. For instance- Established manufacturers such as Panasonic, LG Chem, and Samsung SDI are also facing pressure from both new entrants and each other.

Environmental and Regulatory Concerns: As the demand for lithium-ion batteries grows, so do concerns regarding their environmental impact, particularly in terms of mining practices and battery disposal. In 2022, the Environmental Protection Agency (EPA) proposed stricter regulations on lithium extraction to mitigate environmental damage, which could lead to increased operational costs for manufacturers.

North America Lithium-Ion Market Government Initiatives

Battery Materials Supply Chain Initiative (2023): In 2023, the U.S. government launched the Battery Materials Supply Chain Initiative, aimed at securing a domestic supply of critical materials required for lithium-ion battery production. In 2023, the U.S. Department of Energy announced a commitment of approximately $1.6 billion to support various lithium-based projects under the Bipartisan Infrastructure Law.

Research and Development Funding: On 2023, the U.S. Department of Energy (DOE) invested $2 million specifically to advance lithium-ion battery recycling and remanufacturing technologies, emphasizing the importance of developing efficient recycling processes for the growing number of lithium-ion batteries.

North America Lithium-Ion Market Outlook

The North America Lithium-Ion Market is poised for significant growth through 2028, driven by the rapid adoption of electric vehicles (EVs) and the expanding need for energy storage systems. With major investments in battery manufacturing and government initiatives supporting clean energy, the region is becoming a key player in the global lithium-ion market.

Future Trends

Dominance of Electric Vehicles: By 2028, electric vehicles are projected to dominate the automotive market. This shift will be supported by enhanced charging infrastructure and favorable government policies, leading to a substantial increase in lithium-ion battery demand.

Circular Economy Initiatives: By 2028, the lithium-ion battery market is expected to embrace circular economy principles, with a significant increase in the recycling and reuse of battery materials. It is estimated that the recycling rate for lithium-ion batteries will be majorly driven by advancements in recycling technologies and increased regulatory pressure.
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