Lithium-Ion Battery Market to Generate USD 483.40 Billion By 2032 | Demand, Production and Supply Outlook of Lithium-Ion Battery: Astute Analytica

Lithium-ion battery market is experiencing explosive growth, fueled by surging demand in the automotive sector. China dominates production and processing, while India and other nations ramp up capacity. Supply chain concerns loom as demand outpaces lithium availability, prompting geopolitical shifts and a focus on securing resources.

New Delhi, March 12, 2024 (GLOBE NEWSWIRE) — Global lithium-ion battery market is projected to surpass the market valuation of US$ 483.40 Billion by 2032 from US$ 84.4 billion in 2023 at a CAGR of 21.40% during the forecast period 2024–2032.

Lithium-ion batteries are a major part of modern technology. They’re used to power electric vehicles and portable electronics. As production for lithium, the critical element in these batteries, increases to meet demand, Australia remains the world’s largest producer. The country produced an estimated 86 kilotons in recent years. Chile came second with 44 kilotons, followed by China with 33 kilotons. Argentina, Brazil, Zimbabwe, Portugal and the US were also significant producers. Demand for lithium-ion batteries is expected to increase almost a hundredfold by 2030 in India alone as it becomes one of the “largest markets”. The Asia Pacific market is expected to be worth $30.86bn by 2032 — CAGR of 22.1% over nine years — mainly driven by the growing electric vehicle (EV) sector and consumer electronics industry across the global lithium-ion battery market.

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The global requirement for lithium-ion batteries could surge to about 4.7 terawatt-hours (TWh) by 2030 from roughly 700 gigawatt-hours (GWh) this year — if capacity expansion plans come true. The entire value chain of lithium-ion battery manufacturing to recycling has the potential to grow around 30% per year through this decade — potentially hitting more than $400bn at its peak between now and then. Supporting these growth projections would require an additional buildout of about 120-150 new factories worldwide across all stages including cathode production and cell assembly between now and then.

The lithium-ion battery recycling industry is another bright spot: By itself, it can generate a profit pool of $6bn by 2040, or even more than that in revenue terms owed mostly to higher prices foreseen in some key raw materials such as cobalt sulfate, according to estimates contained within Tuesday’s report.

Key Findings in Lithium-Ion Battery Market

Market Forecast (2032) US$ 483.40 Billion
CAGR 21.40%
Largest Region (2023) Asia Pacific (44%)
By Type Li-NMC (36%)
By Form/Design Cylindrical (45%)
By Application  Automotive OEM (61%)
By Power Capacity 3,000-10,000 mAH (57%)
Top Trends
  • Focus on Sustainability: Prioritizing eco-friendly mining, recycling, and battery designs.
  • Advancements in Battery Chemistry: Development of higher-performance, safer, and more cost-effective battery chemistries.
  • Integration with Renewable Energy: Pairing lithium-ion batteries with solar and wind power for grid stability and energy storage.
Top Drivers
  • Electric Vehicle Boom: Surging demand for EVs fueling the need for powerful lithium-ion batteries.
  • Government Support and Incentives: Policies and subsidies promoting clean energy technologies and EV adoption in the lithium-ion battery market.
  • Declining Battery Costs: Continuous reduction in the cost of producing lithium-ion batteries, making them more accessible.
Top Challenges
  • Supply Chain Constraints: Securing a reliable supply of lithium and other critical battery materials.
  • Technological Competition: Potential displacement of lithium-ion technology by emerging battery chemistries.
  • Environmental and Social Impact: Addressing the environmental footprint of lithium mining and ensuring ethical sourcing practices.

Astute Analytica’s Demand, Production and Supply Outlook of Lithium-Ion Battery Market

The demand for lithium-ion batteries has hit an all-time high, mainly in automotive applications. 550 GWh is the amount of battery that will be needed in 2022. This surge can also be seen in the United States, which grew about 80% over and above the sales of electric cars. In the expectation of demand to exceed supply over this time period, there was a significant 180% increase in lithium production since 2017. Lithium nickel manganese cobalt oxide (NMC) remains as the large majority with roughly 36%, coming next lithium iron phosphate (LFP) following with around 27% in the lithium-ion battery market. China’s CATL has developed a Na-ion battery that is estimated to cost 30% less than an LFP battery. Currently, China accounts for about 79% of global EV lithium-ion battery production. European countries are expected to expand their production significantly through Germany leading them to surpass North America and become the second largest producer by 2025.

There are many projections that show supply exceeding demand as far as we can see. With just a growth rate of only one year at around 45%, this could be very good news especially for companies trying to jump into this space. Looking ahead, North America and Europe plan on challenging Asia Pacific dominance with their own manufacturing within the next few years. By 2030, it is expected that there will be over two million metric tons produced annually across the globe.

Potential Growth, Battery Chemistries in Lithium-Ion Battery Market

Demand for batteries used in traction, mainly in the automotive and transport sector, is expected to see outstanding growth with a CAGR of 22.3% from 2022 to 2032. The sector’s dominance will be emphatic with an expected market share of 93%. Top-down initiatives globally are propelling this expansion – India plans a massive increase in manufacturing capacity to hit 145 GWh by 2030 which could secure the fifth position globally, and the US Inflation Reduction Act of 2022 has already sparked nine gigafactory announcements heralding significant battery production increases across the nation.

NMC (nickel manganese cobalt) chemistries currently dominate global lithium-ion battery market with over 36% of market share projected for next year. Surprisingly, NMC batteries’ growing adoption in Europe and North America comes as local reserves for key minerals needed for their making are limited – implying that industry supply chains may be vulnerable to disruption. Securing upstream resources is likely to become paramount. This could involve finding new mineral deposits, developing innovative extraction techniques, optimizing resource recovery efforts and enabling substitution where possible.

Industry Trends and Adoption in Lithium-Ion Battery Market

  • The lithium-ion battery industry is moving beyond the “early adopter” phase, with wider acceptance and integration of this technology.
  • Customers are increasingly shifting toward multi-shift and 24/7 operations, seeking the efficiency gains offered by lithium-ion solutions. Lithium-ion technology provides several advantages, including faster charging times, longer runtimes, and more efficient operation, further solidifying its position in the market.
  • Additionally, lithium-ion battery recycling processes are continuously improving, with advancements in efficiency and the establishment of additional recycling centers.

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Astute Analytica Identified Investment Risks in Lithium-ion Battery Market

While the lithium-ion battery industry offers significant growth potential, investors must carefully consider several inherent risks:

  • Safety and Liability: Lithium-ion batteries are prone to fire, especially in large-scale applications like electric vehicles. Firefighters struggle to contain these fires because they are tough to manage, and insurers face challenges covering them. These risks make funding difficult, getting insurance hard, and create a bad public image.
  • Supply Chain Fragility: If there is an imbalance between supply and demand for lithium it could be a huge risk. Shortages of cathode and anode materials that are necessary for recharging could hinder the lithium-ion battery industry’s ability to meet its needs.
  • Price Volatility and Market Dynamics: When prices fluctuate it is risky for investment decisions and financial planning purposes. This disadvantage happens often within the lithium market. Sodium-ion batteries can also disrupt this lithium-ion battery market as well as bring competition.
  • ESG Concerns: The environmental impact of producing lithium batteries is immense along with social impacts like water usage or CO2 emissions. Human rights violations may happen during mining operations as well which would damage the company’s reputation if not fixed quickly.
  • Geopolitical Risks: Political instability poses risk factors due to select countries that produce or refine lithium outsource from unstable places. The danger comes when nations want production from safer places.
  • Technological Disruption and Obsolescence: New technology advancements can quickly replace any current advancement including breakthroughs in other chemistries or storage solutions will diminish the value of lithium-related investments.
  • Manufacturing and Quality Control: What design or manufacturing flaws lead batteries to fail? Bad quality control measures have been linked to this flaw leading costs go up on production possibly lowering profitability.
  • Environmental Impact and Recycling: Mining for lithium has impact as does recycling lithium-ion batteries. There is a performance degradation over time and sensitivity to environmental factors could hurt the industry long-term.

Global Lithium-ion Battery Market Key Players

  • BYD Company
  • LG Chem
  • Panasonic Corporation
  • Samsung SDI
  • BAK Group
  • Hitachi Corporation
  • Johnson Controls
  • Toshiba Corporation
  • Raja Groups
  • Tata Chemicals
  • TDK Electronics AG
  • Sony Corporation
  • Murata Manufacturing Co., Ltd.
  • Amperex Technology Limited
  • LITEC Co., Ltd.
  • GS Yuasa International Ltd.
  • Automotive Energy Supply Corporation
  • Other Major Players

Key Segmentation:

By Type:

  • Lithium Nickel Magnesium Cobalt (LI-NMC)
  • Lithium Ferro Phosphate (LFP)
  • Lithium Cobalt Oxide (LCO)
  • Lithium Titanate Oxide (LTO)
  • Lithium Manganese Oxide (LMO)
  • Lithium Nickel Cobalt Aluminum Oxide (NCA)

By Power Capacity:

  • 0-300 mAH
  • 3,000-10,000 mAH
  • 10,000-60,000 mAH
  • More than 60,000 mAH

By Application:

  • Consumer Electronics OEMs
    • Smartphones
    • Laptops
    • UPS Systems
    • Smart Cameras
    • Smart Watches
    • Smart Glasses
    • Smart Textiles
    • Others
  • Automotive OEMs
    • Hybrid Electric Vehicles (HEVs)
    • Battery Electric Vehicles (BEVs)
    • Others (Service Stations/Dealers)
  • Energy Storage
    • Commercial
    • Industrial
    • Residential
    • Utilities
  • Industrial OEMs
    • Military
    • Industrial Equipment
    • Medical
    • Marine
    • Telecommunication
    • Mining
    • Forklifts
    • Others
  • Other OEMs
  • Aftermarket

By Form/Design:

  • Pouch
  • Cylindrical
  • Elliptical
  • Prismatic
  • Custom Design

By Region:

  • North America
  • Europe
  • Asia Pacific
  • Middle East & Africa (MEA)
  • South America

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About Astute Analytica

Astute Analytica is a global analytics and advisory company which has built a solid reputation in a short period, thanks to the tangible outcomes we have delivered to our clients. We pride ourselves in generating unparalleled, in depth and uncannily accurate estimates and projections for our very demanding clients spread across different verticals. We have a long list of satisfied and repeat clients from a wide spectrum including technology, healthcare, chemicals, semiconductors, FMCG, and many more. These happy customers come to us from all across the Globe. They are able to make well calibrated decisions and leverage highly lucrative opportunities while surmounting the fierce challenges all because we analyze for them the complex business environment, segment wise existing and emerging possibilities, technology formations, growth estimates, and even the strategic choices available. In short, a complete package. All this is possible because we have a highly qualified, competent, and experienced team of professionals comprising of business analysts, economists, consultants, and technology experts. In our list of priorities, you-our patron-come at the top. You can be sure of best cost-effective, value-added package from us, should you decide to engage with us.

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