Advanced Battery Materials are Key to Meeting the Future Growth Potential of Li-ion Batteries
This study quantifies the consumption of key lithium-ion (Li-ion) battery materials and focuses on gauging the impact that key market developments, like the advancements in battery chemistries, the rapid increase in electric vehicle (EV) sales, an ever-tightening regulatory scenario, and a shift in consumer preferences towards EVs, etc., are expected to have on the demand for individual materials between 2020 and 2027.
The study (an update of the publisher’s study on Li-ion battery materials, published in 2020) quantifies the consumption of key material types, namely cathode materials, anode materials, electrolytes, separators, binders, and adhesives & sealants. On the basis of applications, the study analyses the demand for battery materials from applications such as EVs, industrial and energy storage systems (ESS), consumer electronics, and others (medical & healthcare devices and portable tools).
The study quantifies the consumption of each of these material types on the basis of a robust methodology comprising an analysis of total Li-ion battery production, EV production volumes, uptake of the considered materials, and supply of those materials.
After having registered a lackluster growth in 2019, the global EV sales registered a sharp surge (+35% y-o-y) in 2020. The global EV sales (BEVs and PHEVs) nearly quadrupled between 2016 and 2020. The global EV sales volume was estimated at nearly 3.1 Mn units for 2020. This is despite the raging pandemic, ensuing containment measures, and supply disruptions, and in sharp contrast with the internal combustion engine (ICE) vehicle sales that plummeted by 14% in 2020.
As the demand gathers momentum and as more and more large global-scale battery facilities come online, production costs and average price are expected to register further declines, thereby inching closer to the coveted tipping point, where the gap between ICE vehicles and EVs disappears.
On the flip-side, while the global EV sales have been registering a robust growth, especially for the last 3 to 5 years, the bulk of the sales volume has been concentrated in the United States, China, and Western Europe. However, EVs currently available in countries such as India and Brazil are priced significantly higher than conventional mass-market ICE vehicles.
Furthermore, the lack of a well-developed network of charging infrastructure in these regions is likely to continue to compound the impediments associated with the mass adoption of EVs, at least over the short term.
The continued push towards longer-range vehicles (and hence higher energy density batteries) entails a shift towards technologies based on higher nickel content cathode chemistry, partial replacement of graphite with silicon composites in anodes, the incorporation of functional additives in electrolytes, and increasing demand for thinner, high thermal resistance separators.
While battery manufacturers are focusing on increasing capacity and reducing costs, a disruption in the supply of any of these crucial chemicals results in sky-rocketing prices and availability concerns, thereby disrupting the entire value chain. This is exacerbated by other diverse concerns ranging from ethical sourcing (artisanal or small-scale subsistence mining, child labor) to political instability in countries such as the Democratic Republic of Congo (DRC)-the single largest supplier of cobalt.
Accordingly, incumbents across the value chain, especially in Europe, are increasingly mandating the ethical sourcing of raw materials, reducing the use of critical materials, and developing processes and infrastructure for the recycling and end-of-life management for Li-ion batteries.
The publisher's analysis indicates that the global battery materials market is slated to register a robust double-digit growth of about 15.6% in terms of revenue between 2020 and 2027.
