Electric Vehicle Battery Market Size, Share, Growth, Trends, Production, Consumption, Revenue and Forecast 2021 to 2027

Published Date : Apr 2020 | No. of Pages : 200 Pages | Category : Automation and Transport

The global electric vehicle battery market size was valued at US$ 30 billion in 2020 and is projected to reach at US$ 92 billion by 2027, growing at a CAGR of 19.8% from 2021 to 2027.

Increasing demand of electric vehicles, improvement in battery technology, supporting government policies and regulations, and launch of new plug-in EV models are factors responsible to drive the EV battery market.

Today, with the increasing concerns raised over the environmental impact of conventional vehicles, governments around the world are encouraging the adoption of vehicles using alternative sources of fuel. EVs are zero-emission vehicles and are gaining preference for clean public transport across countries. Several national governments offer financial incentives, such as tax exemptions and rebates, subsidies, reduced parking/toll fees for EVs, and free charging, to encourage the adoption of EVs. Thus, globally the requirement of EV battery is gaining fast pace.

The emergence of Lithium-ion technology has fueled the growth rate for batteries over the last two decades. While initial hybrid vehicles used Nickel Metal Hydride (NiMH) batteries, Li-ion batteries have been the primary solutions for automakers to power plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs). High-energy density, charge retention capacity, and low maintenance are some of the benefits that have accelerated the growth of Li-ion as a battery technology. Automobile manufacturers introducing BEVs and PHEVs in the EV battery market are further enhancing the technology and are anticipated to offer Li-ion powered solutions as a primary power source in their vehicles.

A battery is used as a secondary power source in automobiles. An electric vehicle battery is a secondary (rechargeable) battery. It uses chemical energy stored in rechargeable battery packs for power and therefore does not require any combustion engine for propulsion. An electric vehicle battery or traction battery powers the propulsion of battery electric vehicles.

Increasing global concerns regarding the negative effect of climate change along with alarming pollution levels recorded in the major cities have created a significant demand for electric vehicles. A major factor behind the growth of electric vehicles is the support provided by the various governmental agencies to encourage the sale of these vehicles. This factor has driven the growth of the electric vehicle battery market globally.

The growth of the electric vehicle battery market is driven by rise in the demand for zero-emission vehicles, decrease in the cost of the electric vehicle battery system, and increase in the global awareness regarding climate change.

However, stringent lead pollution norms in electric vehicle battery may hinder the market growth. In addition, high import taxes on EV batteries and instability in raw material prices are expected to limit the electric vehicle battery market growth. Furthermore, evolution of Lithium-ion technology in EV battery and growth in public charging infrastructure offer lucrative opportunities for the market.

Top Impacting Factors

The soaring demand for zero-emission vehicles, advancing evolution of Lithium-ion technology, and rising government regulations on emission control systems are the significant factors that affect the growth of the global electric vehicle battery market. These factors are anticipated to either drive or hamper the market growth.

Enhanced Demand for Zero-Emission Vehicles

Widespread global concerns regarding the negative effect of climate change along with alarming pollution levels recorded in major cities have created a significant demand for electric vehicles. The rise in petrol and diesel prices has added to the demand for fuel-efficient vehicles. This rise in fuel prices is due to depletion of fossil fuel reserves and growth in tendency of companies to gain maximum profit from these oil reserves. All these factors have cumulatively shot up the need for advanced fuel-efficient technologies, leading to a surge in demand for electrically powered vehicles for travel.

Production of Lower Cost Batteries

Automobile companies focus on the production of advanced electric vehicle battery systems that are expected to have lower emission at relatively lower costs as compared to heavier and larger engines. Compactness and cost-effectiveness are other useful features of this battery Thus, development of technological advancement in the electric vehicle battery system presents various opportunities for leading players in the future.

The passenger cars segment is expected to be the largest vehicle type market

The passenger cars segment is expected to lead the EV battery market in Asia Pacific due to the high adoption rate of EVs in China. The region alone considered using 61% of all cobalt used globally in EV batteries in 2019, a rise of almost 50% in 2018 (Source: USGS National Minerals Information Center). This growth can be attributed to the shift of Chinese cell suppliers from lithium to cobalt bearing NCM cathodes.

Panasonic, one of the major suppliers of batteries to OEMs like Tesla and Toyota, has deployed more lithium batteries in 2019 than all of its competitors globally. CATL quadrupled its lithium batteries deployment year-over-year to 4,800 tons in 2019. In 2020, CATL also successfully tested its liquid cooling battery energy storage system (BESS) based on lithium iron phosphate (LFP) and cleared all the safety tests.

The lithium-ion segment in battery type will be leading the EV battery market during the forecast period

Lithium-ion batteries are the most common battery type used in modern electric vehicles. These batteries have higher energy density compared to lead-acid or nickel-metal hydride batteries. Their compact size makes them preferable in the automotive industry. For example, Nissan's lithium-ion battery technology allows a higher density of lithium ions to be stored, increasing travel distance. Alternatives such as advanced batteries and supercapacitors cannot easily replace lithium-ion batteries due to their performance, cost, weight, and size.

The European EV battery market is projected to be the fastest by 2027

Europe is estimated to account for a share of 32% of the global EV battery market, by volume, in 2021 and is projected to grow at a CAGR of 35.7% during the forecast period. The growth of the EV battery market in the region is largely dependent on government incentives and funds as electric vehicles are currently very expensive.

Countries such as Germany, France, Spain, UK, Italy, Norway, Sweden, and Denmark are considered under Europe for market analysis. The presence of OEMs such as VDL Groep (Netherlands) and AB Volvo (Sweden) offers opportunities for the growth of the EV battery market in the region. The increasingly stringent regulations related to environmental issues are propelling market players to test and develop advanced vehicles, which will further boost the market for advanced battery technologies. For example, Brexit deal creates an opportunity for Nissan to expand the business operations at its Sunderland plant. In return, the Japanese OEMs is even investing in the UK and other European countries. Nissan is interested to build additional battery production capacity in Sunderland. In September 2020, Mercedes-Benz, a subsidiary of Daimler AG, introduced its new all-electric eCitaro G, optionally equipped with innovative solid-state batteries. In December 2019, Volvo Trucks, a subsidiary of AB Volvo, developed heavy-duty electric concept trucks for construction operations and regional distribution.

France is expected to be the fastest-growing market for EV batteries in the region. The initiatives undertaken by the French government to promote electric commercial vehicles and electrification of public transport fleets are driving the country’s EV battery market. The government in Germany is also focusing on increasing the use of electric vehicles.

Major battery manufactures have been expanding their networks in the European region that has allowed significant growth of EVs and batteries. For instance, in 2017, Samsung SDI has invested about USD 1.3 billion to expand its factory in Hungary. This allowed Samsung to start production in 2018 on the Hungary plant, which produced batteries for 50,000 EVs

Key Players

The key players profiled in the report include Panasonic, AESC, BYD, Mitsubishi, LG Chem, Samsung, Wanxiang, Beijing Pride Power, Tianneng, and SB LiMotive.

Electric Vehicle Battery Market Key Segments:

By Propulsion Type

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

By Battery Type

  • Lead Acid Battery
  • Nickel Metal Hydride Battery
  • Lithium ion Battery

By Vehicle Type

  • Passenger Car
  • Commercial Vehicle
  • Two-Wheeler

By Region

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Rest of Europe
  • Asia-Pacific
    • China
    • Japan
    • India
    • Australia
    • Singapore
    • Rest of Asia-Pacific
  • LAMEA
    • Latin America
    • Middle East
    • Africa

Key Benefits for Electric Vehicle Battery Market:

  • This study comprises an analytical depiction of the global electric vehicle battery market with current trends and future estimations to depict the imminent investment pockets.
  • The overall market potential is determined to understand the lucrative trends to gain a stronger foothold in the electric vehicle battery industry.
  • The report includes information related to key drivers, restraints, and opportunities with a detailed impact analysis.
  • The current market is quantitatively analyzed from 2020 to 2027 to highlight the financial competency of the global electric vehicle battery market.
  • Porter’s Five Forces analysis illustrates the potency of the buyers and suppliers in this global market.

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