The Battery Materials Market will grow significantly owing to rising demand for lithium-ion batteries

The battery materials market comprises materials such as cathode materials, anode materials, electrolytes, and separators that are used in the manufacturing of batteries. Cathode materials play a vital role in determining the energy capacity of batteries. Some of the commonly used cathode materials are lithium cobalt oxide, lithium nickel manganese cobalt oxide, lithium iron phosphate, and lithium nickel cobalt aluminum oxide. Anode materials conventionally consist of graphite or lithium titanate oxides that provide host structures for lithium ion insertion/extraction during the charge/discharge process of batteries.

The global battery materials market is estimated to be valued at US$ 50.6 billion in 2024 and is expected to exhibit a CAGR of 6.0% over the forecast period of 2023 to 2030.

Growth in the market is driven by rising demand for lithium-ion batteries from the consumer electronics, automotive, and energy storage industries. Lithium-ion batteries offer higher energy density, superior functionality, and lower maintenance costs over traditional battery technologies.

Key Takeaways
Key players operating in the battery materials market are Albemarle, China Molybdenum Co. Ltd., Gan feng Lithium Co., Ltd., Glencore PLC, Livent Corporation, Norlisk Nickel, Sheritt International Corporation, SQM S.A., Targray Technology International Inc., Teck Resources, Tianqi Lithium, and Vale S.A.

The demand for battery materials is growing steadily owing to rapidly increasing sales of electric vehicles worldwide as governments encourage electrification of transportation for improved sustainability. Production of EV batteries requires large quantities of cathode and anode materials such as lithium, nickel, cobalt, and graphite.

Technological advances are helping reduce costs and improve performance of lithium-ion batteries. Emergence of new cathode chemistries and development of high-nickel and nickel-rich NMC alternatives to lithium cobalt oxide are allowing batteries to store more energy while lasting longer on each charge. Additives and new production methods are also enhancing battery safety and lifespan.

Market Trends
Growing adoption of lithium-ion battery technologies in applications such as consumer electronics and electric vehicles is a major trend driving the battery materials market. Manufacturers are expanding production capacities of cathode and anode materials to match the robust demand from the lithium-ion battery sector.

Sustainability concerns around cobalt mining have led to increased R&D into alternative cathode materials with lower cobalt content or no cobalt. New lithium-ion battery chemistries utilizing manganese, silicon, lithium iron phosphate are gaining ground and alleviating reliance on scarce resources.

Market Opportunities
Rising demand for energy storage solutions based on large-scale lithium-ion batteries is opening up opportunities for materials companies. Battery energy storage plays a vital role in the expansion of renewable energy by solving intermittency issues.

Focus on developing domestic supply chains for critical battery materials in economies like the US, Europe and China due to geo-political risks is conducive to market growth. Governments are supporting local players with incentives to manufacture EV battery materials and components locally.

The COVID-19 pandemic has significantly impacted the battery materials market. Supply chain disruptions due to lockdowns imposed severe restrictions on transportation which affected the supply of key raw materials like lithium, cobalt, graphite and nickel. This led to a decline in production of batteries used in various applications including consumer electronics and EVs. However, with the resumption of transportation and lifting of lockdowns, the supply chain is recovering. There is also rising demand for lithium-ion batteries from the healthcare sector for vaccines storage. This is likely to drive market growth in the coming years.

Government incentives and subsidies for EVs in major economies are also boosting demand. Countries like China, Germany, France, Netherlands, Norway, Sweden, UK, and others have announced plans to phase out petrol/diesel cars by 2030. This will accelerate adoption of EVs and push up consumption of battery materials. Investments are flowing into mining and refining projects to secure raw material supplies and meet the projected increase in demand for lithium, cobalt, and graphite especially. Although supply constraints may persist in the short term due to disrupted mining activities during lockdowns, long term demand outlook remains positive given the momentum in EV adoption globally post pandemic.

Geographically, Asia Pacific accounts for the major share of global battery materials market in terms of value, with China being the largest consumer as well as producer. With massive investments and government support for local battery production and EV manufacturing, China dominates both demand and supply of battery materials globally. Europe is another major regional market, led by Germany due to its large and growing automotive industry and positive policy environment for EVs. The fastest growing regional market for battery materials is expected to be North America, driven by the US where initiatives like renewable energy mandates and EV subsidies are accelerating battery usage. Production capacity expansions are also likely to increase in the US and Canada to meet rising local battery manufacturing requirements.

The outbreak has impacted India's battery materials market due to supply chain issues affecting imports of key raw materials required in battery manufacturing. Demand from major consuming sectors like consumer electronics, EVs showed decline initially but has started recovering since mid-2020. The government's push for local EV battery production under the ‘Make in India’ initiative and FAME 2 scheme have kept growth outlook promising in the long run. Domestic mining projects are progressing to bolster security of supply for critical minerals like lithium and cobalt to support the country's nascent EV and energy storage sectors. Manufacturing zones focused on batteries and electric vehicles are being set up across states to establish India as an export hub and meet rising domestic needs.

The global battery materials market has demonstrated resilience despite challenges posed by COVID-19 related disruptions. With governments accelerating actions to address climate change and curb pollution, the longer term demand prospects powered by electric mobility transition remain optimistic. The industry is making coordinated efforts to secure raw material supplies through stake acquisitions, mining projects and trade agreements while boosting recycling abilities in tandem with circular economy goals. Once supply chain bottlenecks are addressed completely, above trend growth rates are expected to continue over the coming decade driven by EV uptake globally with China, Europe and North America leading the way while India emerges as a major battery production and export hub supported by its large market, policy stimulus and mineral reserves.