Electric Vehicle Battery Market Size Will Reach USD 141 Billion by 2032
High demand for electric mobility has seen a corresponding surge in the battery market, with installations from top companies in the industry spiking during 2022. The outlook for electric vehicles is highly positive and battery manufacturers are likely to continue to benefit from these strong sales figures for the foreseeable future.
Statzon’s market intelligence database shows that the global EV battery market reached USD 34 billion in 2022, and is expected to grow to USD 141.6 billion by 2032, with a CAGR of 15.4% from 2023 to 2032. The passenger car segment is the largest contributor, with a value of USD 24.9 billion and a growth of 14.9% CAGR. Two-wheelers and commercial vehicles are also expected to experience significant growth rates of 18.2% and 16.1%, respectively. The two segments accounted for 27% of the overall EV battery market in 2022.
LFP batteries getting more popular
Lithium-ion batteries are the most popular and considered the best batteries for electric vehicles. They are also used in many portable consumer electronics because of their power-to-weight ratio, meaning that have great charge-holding capacity even at a smaller size. Lithium-ion batteries contributed USD 21.5 billion to the EV battery market in 2022, which is about 63% of the total market value.
Most BEVs and PHEVs use lithium-ion batteries, though the exact chemistry often varies from that of consumer electronics batteries.
Nickel-metal hydride batteries accounted for a 5% share of total the EV battery market and lead-acid batteries took up 31% of the market in 2022.
NMC (Nickel Manganese Aluminium) and NCA (Nickel Cobalt Aluminium) were the most used lithium-ion chemistries in electric car batteries, accounting for 75% of cathode material demand due to their long driving range advantages, according to the IEA Global EV Outlook 2022 report. However, the surge of EV adoptions in China increased the market share of LFP (Lithium Iron Phosphate) from 11% in 2020 to 25% in 2021 and further to 31% by the end of 2022. LFP is mainly used in medium and heavy-duty vehicles in China, but Tesla and BYD have started to release electric passenger cars powered by LFPs. Tesla began using LFP batteries made by CLTA for its China-made Model 3 in 2020, and by Q1 2022, over half of its production used LFP packs. BYD and other Chinese EV makers are also heavy users of LFP, with the technology accounting for 57% of total EV battery production in China in 2021.
Rising battery costs may bring EV production down.
Following a decade of consistent decline, the cost of lithium-ion battery packs experienced a 7% increase in 2022, reaching a price of USD 151/kWh. This rise in cost can be attributed to disruptions in the supply chain, which have led to a more than 20% increase in the prices of critical materials. Nickel, for example, is now 2-3 times more expensive since the war in Ukraine started. Rising battery prices could hinder affordable BEV production. BloombergNEF forecasts lithium-ion battery prices to stay at USD 152/kWh in 2023. More lithium production is expected to come in 2024 and hopefully bring the price down.
Electric vehicle battery market share of the top ten companies
Chinese battery manufacturers dominate the global supply of EV batteries, with six out of the top ten companies being Chinese. CATL leads the way with a 37.1% market share, supplying batteries to Tesla, Volkswagen, BMW, and other automakers. BYD ranks second with a 13.6% market share and three-fold growth in installations from 22.6 GWh in 2021 to 60.6 GWh in 2022. The top ten list also includes three Korean and one Japanese company, maintaining Asian dominance despite US and European efforts to boost their domestic production. The top ten EV battery companies account for 90% of global installations.
Rika Melissa
Data Journalist, Statzon
rika@statzon.com
https://statzon.com
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