The battery market comprises batteries in various forms including primary batteries and secondary batteries that find extensive applications in industries such as automotive, consumer electronics, healthcare, and industrial. Lithium-ion batteries dominate the market and are commonly used in electric vehicles, consumer electronics, and energy storage due to their light weight and high energy density. Lead-acid batteries continue to witness robust demand in the automotive industry for starting, lighting, and ignition applications due to their cost-effectiveness. Advances in battery technologies are enabling batteries with higher energy capacity and safety. The growing adoption of electric vehicles and increasing focus on renewable energy are fueling battery demand.

The Global Battery Market is estimated to be valued at US$ 192.47 Bn in 2024 and is expected to exhibit a CAGR of 12.% over the forecast period 2024 to 2030.

Key Takeaways

Key players operating in the battery market are DSM, CP Kelco, H & A Canada Inc., Nanjing Joyfulchem Co., Ltd., Dancheng Caixin Sugar Industry Co. Ltd., Zhengzhou Cinogel Biotech Co., Ltd., Hangzhou Gellan Solutions Biotec Co., Ltd., DuPont, Hebei Xinhe Biochemical Co. Ltd, and Nutricorn Co., Limited. The increasing sales of electric vehicles and demand for battery backups for renewable energy are driving the battery market. Manufacturers are investing in production capacity expansion to cater to the growing demand.

The rapid adoption of electric vehicles worldwide is augmenting the demand for batteries. Stringent emission norms and government initiatives to promote clean mobility are catalyzing the sales of electric passenger and commercial vehicles. Further, developing nations are also supporting electric mobility to reduce their oil import bills and curtail pollution.

Key players are strategically expanding their manufacturing facilities across major markets to establish a global footprint and cater to the growing demand. For instance, in 2023, Panasonic plans to begin construction of a new battery plant in Kansas, United States to support Tesla and other automakers. Contemporary Amperex Technology, a Chinese battery maker, is building two plants in North America.

Market drivers

One of the key drivers for the battery market is the increasing adoption of electric vehicles. Many nations are pushing electric mobility with subsidies and regulations to meet climate change goals. Automakers are aggressively launching new EV models to cater to the growing customer demand. Further, advancements in battery technologies are improving driving range and reducing battery costs, making electric vehicles more attractive. This rising EV sales wave is propelling the demand for lithium-ion batteries.

The current geopolitical situation is impacting the growth of the battery market in several ways. Political uncertainties and trade tensions between major economies are disrupting supply chains for battery materials and components. Restrictions on trade of certain metals and minerals that are crucial raw materials for batteries like lithium, cobalt etc. affect their availability. This hurts the production and deployment of batteries especially for electric vehicles. Geopolitical risks in major producing regions can cause price volatility of battery materials.

The Battery Market Demand needs to develop alternative sources and supply chains that are not dependent on select regions to insulate itself from such risks. Companies must diversifysourcing, invest in recycling to improve resource security, and foster multi-country collaborations. Localizing more parts of the value chain can help balance geopolitical vulnerabilities but also increase costs. The market will see more consolidation as large firms acquire smaller ones to gain control over raw material supply and technology. Governments around the world are supporting development of domestic battery industries through incentives and regulations to reduce import dependence.

In terms of value, the battery market in Asia Pacific region concentrates a large share currently. This is because major economies like China and Japan have a sizable electric vehicle market and presence of leading battery manufacturers. China in particular dominates the global manufacturing of lithium-ion batteries and supplies a significant portion of batteries as well as materials to other markets. However, the battery market is witnessing fastest growth in the European region. Strict emission regulations and push for electrification of transportation are driving the demand for batteries dramatically in the EU.

While the Asia Pacific region still accounts for the highest battery market revenue currently due to concentration of players, the market in Europe is expanding at the fastest pace. Factors like stringent emission norms, tax benefits for electric vehicles and focus on developing domestic battery champion companies are fueling the growth of battery deployment across transportation and stationary storage applications. Countries like Germany, France and the UK are at the forefront and battery technologies developed here can shape global standards.

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