Electric Vehicle Battery Market

Global Electric Vehicle Battery Market Size (2023 to 2028)

The global electric vehicle battery market is expected to be worth 42.87 billion USD in 2023. It is expected to grow at a CAGR of 25.30% during the forecast period and reach a value of 132.39 billion USD by 2028.

The Electric Vehicle (EV) battery market is being driven by rising demand for electric vehicles, advancements in battery technology, favorable government policies and regulations, and new plug-in EV models. Governments worldwide support the use of vehicles that use alternative fuels in response to growing concerns about the environmental impact of conventional automobiles. As a result, electric vehicles (EVs) are zero-emission cars increasingly preferred for clean public transportation in several nations. In addition, several national governments provide financial incentives such as tax exemptions and refunds, subsidies, reduced parking/toll rates for EVs, and free charging to stimulate the adoption of electric vehicles. Therefore, the EV battery market is growing at a fast pace in the coming years.

MARKET DRIVERS:

Global concerns about the harmful effects of climate change and worrying pollution levels in major cities have created a great demand for electric vehicles. In addition, the support offered by various government organizations to stimulate the sale of electric vehicles is a significant driver behind their growth. This has fueled the global development of the electric vehicle battery market. Across the globe, the electric vehicle market is expanding at a breakneck pace. In addition, several major manufacturers, including Toyota, Tata Motors, Mercedes-Benz, and Hyundai, are developing electric vehicle models to strengthen their positions in the industry. As a result, electric car development is projected to accelerate shortly, thanks to significant manufacturers' interest in the field. Other factors that influence automakers' decision to enter the EV industry include:

Leading automakers/OEMs cooperate with key EV battery providers to take advantage of the fast-increasing EV market. Concerns about the harmful effects of climate change and worrying levels of pollution in major cities have fueled a growing demand for electric vehicles. In addition, the increased demand for fuel-efficient automobiles has been driven by rising gasoline and diesel prices. The increase in fuel prices is attributable to the depletion of fossil fuel supplies and an increasing trend among businesses to maximize profits from these reserves. These causes have combined with increasing the demand for sophisticated fuel-efficient technology, resulting in a spike in demand for transport vehicles driven by electricity.

Moreover, Automobile manufacturers are concentrating on developing sophisticated electric vehicle battery systems, which are predicted to emit fewer pollutants at cheaper costs than heavier and larger engines. Another advantage of this battery is its compactness and cost-effectiveness. As a result, future technological advancements in the electric car battery system give a variety of opportunities for market leaders.

MARKET RESTRAINTS:

Although the demand for EV batteries is high worldwide, these may also comprise several drawbacks. Because they are put through various tests before being utilized, most electric car batteries are deemed safe. However, multiple incidents, such as the recall of 68,000 Chevy EV Bolts due to five battery-related fires, have raised worries about the battery's safety. In addition, Combustible materials such as lithium, manganese, and polymers are used in electric vehicle batteries. However, lithium becomes particularly reactive when exposed to water. Therefore, there are concerns about the performance and safety of these batteries in excessively dry or moist environments, restricting potential sales. On the other hand, stringent lead pollution regulations in electric vehicle batteries may hamper the global EV battery market expansion. Furthermore, the electric vehicle battery market is expected to be constrained by high import taxes on EV batteries and price volatility in raw materials.

Impact of COVID-19 on the Electric Vehicle Battery Market:

Many countries decided to impose a complete lockdown for more than two months due to the pandemic, which hampered the production of electric vehicles and battery components. As a result, electric vehicle sales first took a hit as manufacturing sites worldwide were shut down. On the other hand, most automakers resumed vehicle production with limited capacity and the appropriate safeguards in place. The average number of electric vehicles sold in 2020 was higher than the total number sold in 2019. On the other hand, component production suffered a setback, and tiny Tier II and Tier III manufacturers faced cash flow problems.

REPORT COVERAGE:

This research report on the global electric vehicle battery market has been segmented and sub-segmented into the following categories.

Electric Vehicle Battery Market - By Propulsion Type:

• Hybrid Electric Vehicle
• Battery Electric Vehicle
• Plug-in Hybrid Electric Vehicle

Based on propulsion type, battery electric vehicle tends to hold the largest global electric vehicle battery market and is anticipated to continue its trend during the forecast period. Battery electric vehicle takes power from the battery packs. Thus, it does not have an internal combustion engine. It has increasing demand due to its fuel economy regulations. On the other hand, plug-in hybrid electric vehicles have the highest CAGR in the upcoming years.

Electric Vehicle Battery Market - By Battery Type:

• Lithium-ion battery
• Nickel metal hydride battery
• Lead-acid battery

The most prevalent battery type utilized in modern electric vehicles is lithium-ion. When compared to lead-acid or nickel-metal hydride batteries, these batteries have a higher energy density. In addition, they are preferred in the automobile industry because of their small size. For example, Nissan's lithium-ion battery technology allows for a higher density of lithium ions to be stored, allowing for a longer travel distance. However, improved batteries and supercapacitors cannot simply replace lithium-ion batteries because of their performance, cost, weight, and size. Therefore, lithium-ion batteries tend to have the most prominent share of the electric vehicle battery market.

Electric Vehicle Battery Market - By Vehicle Type:

• Commercial vehicle
• Passenger car
• Two-wheeler

Based on application, passenger cars have the most significant global electric vehicle market share due to increasing government initiatives to encourage electric vehicles to prevent air pollution. Moreover, the demand for commercial vehicles is also growing since this helps reduce greenhouse gas emissions. Over the predicted period, such efforts would spur the adoption of electric vehicles and electric vehicle battery sales.

Electric Vehicle Battery Market - By Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

Europe is anticipated to hold the maximum share of the global electric vehicle battery market owing to the increasing growth of the EV battery business in Germany.

Asia Pacific is anticipated to grow with the highest CAGR in the global electric vehicle battery market due to the increasing preference for electric vehicles, reduced labor costs, and low maintenance costs in China and India. The increasing expansion of sales of electric automobiles in the U.S led the North American region to hold the significant global electric vehicle battery market share.

KEY MARKET PLAYERS:

The companies covered in the report include CATL, Panasonic, LG Chem, BYD COMPANY LIMITED, Samsung SDI, SK INNOVATION CO. LTD., VEHICLE ENERGY JAPAN CO. LTD., TOSHIBA CORPORATION, MITSUBISHI CORPORATION, ENVISION AESC, ENERGY

RECENT HAPPENINGS IN THE MARKET:

• During an online briefing last month, CATL, the world's largest producer of electric vehicle batteries, outlined its ambitious intention to lead the industry away from lithium-ion batteries by fully introducing a sodium-ion replacement in 2023.
• Samsung SDI declared that it had completed the construction of the EV battery plant in Hungary. It further mentioned that it would start producing high-power and high-efficiency batteries made with the help of state-of-the-art technology.