Electric Vehicle Battery Market Outlook, 2030

An electric Vehicle battery is a type of rechargeable battery which is used to power the electric motor of an electric vehicle. These batteries are designed to give power for a sustainable time period deep-cycle processes. Electric vehicle batteries show many unique characteristics over a normal conventional vehicle battery such as high power to weight ratio, specific energy density, energy sustainability, efficient output etc. The history of EV batteries can be traced back to the early 1990s when the first commercially available electric cars, such as the General Motors EV, were introduced. These early models used lead-acid batteries, which were heavy and had limited range and lifespan.

However, the development of lithium-ion (Li-ion) batteries in the early 2000s revolutionized the EV industry, offering higher energy density, longer range, and faster charging times. There are some major components affecting the growth of the electric vehicle market such as increasing demand of EVs, improving technology in batteries as well as vehicle technology, adaption rate by the consumers, raising fuel costs, convenience provided by the electric vehicle, safety measures, less pollution, energy consumptions etc. Most commonly used electric vehicle battery is Lithium-Ion battery. It has more power ratio with high energy density. Other types of battery used in electric vehicle are Lead Acid battery, Nickel Metal Hybrid battery, Sodium Ion and Solid state battery. According to the International Energy Agency (IEA), global battery demand for EVs reached over 750 GWh in 2023, a 40% increase from the previous year. This growth is primarily attributed to the rising sales of electric cars, particularly in major markets such as the United States, Europe, and China.

According to the research report 'Global Electric Vehicle Battery Market Outlook, 2030,', the Global Electric Vehicle Battery market was valued at more than USD 58.75 Billion in 2024 with the CAGR of 16.39% from 2025-2030. This market directs to an important factor called ‘Green Energy’. Electric battery vehicle is one of the most efficient and promising technology for reducing the carbon emissions by global transportation. Technical advancements happening in electric vehicle battery industry implies more demand towards electric vehicles. Government is also planning proactive initiatives in order to support the growth of the battery market.

The increasing demand for EV batteries has led to a surge in the extraction and refining of critical raw materials such as lithium, cobalt, and nickel. In 2023, battery demand accounted for 85% of total lithium demand, 70% of cobalt demand, and over 10% of nickel demand. To meet this growing demand, significant investments have been made in mining and refining operations, ensuring a stable supply of these critical materials. Innovations in battery technology and infrastructure have also played a crucial role in the growth of the EV battery market. Battery-as-a-service models and battery swapping stations have emerged as viable solutions to overcome charging infrastructure challenges, particularly in regions with limited charging facilities. These innovations have made electric vehicles more accessible and convenient for consumers, further driving the adoption of EVs.

Market Drivers

Increasing Demand for Electric Vehicles (EVs): Governments across the globe are pushing for sustainable and eco-friendly transportation to curb greenhouse gas emissions and combat climate change. Incentives such as subsidies, tax credits, and rebates encourage consumers to shift from traditional internal combustion engine (ICE) vehicles to electric alternatives. China’s EV sales account for over 50% of global EV demand, backed by government support such as subsidies and policies like the 'New Energy Vehicle' (NEV) mandate.

Technological Advancements in Battery Chemistry and Energy Density: Rapid innovations in battery technologies, such as solid-state batteries, lithium-sulfur, and advancements in energy density, are reducing costs and improving the performance of EVs. Better battery efficiency, faster charging capabilities, and longer lifespans make EVs more appealing to consumers. Companies like CATL and Panasonic are working on improving energy densities, with CATL recently developing Qilin batteries offering 1000 km range per charge.

Market Challenges

High Costs of Battery Production: Despite decreasing prices, EV batteries remain a costly component due to raw material costs, manufacturing processes, and reliance on scarce minerals like lithium, cobalt, and nickel. Additionally, price fluctuations in these materials due to geopolitical tensions and supply constraints pose challenges.

Raw Material Supply Chain Constraints: EV battery production is highly dependent on rare minerals (lithium, cobalt, and nickel), creating vulnerability in the supply chain. A significant portion of mining and refining activities are geographically concentrated, leading to monopolization and supply risks. China dominates more than 70% of the global lithium-ion battery supply chain, causing dependencies and geopolitical risks for other markets.

Market Trends

Transition Towards Solid-State Batteries: Solid-state batteries are emerging as a transformative technology that can offer higher energy density, improved safety, and faster charging compared to traditional liquid-electrolyte lithium-ion batteries. They are expected to play a pivotal role in the next generation of EVs. Companies like Toyota and QuantumScape are investing heavily in solid-state battery R&D to commercialize this technology by 2025-2030.

Battery Recycling and Second-Life Applications: As the adoption of EVs grows, so does the concern over battery waste. Recycling technologies and second-life use of EV batteries in applications like energy storage systems are becoming vital to ensure sustainability and cost efficiency. Companies like Redwood Materials (founded by Tesla co-founder JB Straubel) are pioneering recycling processes to recover up to 95% of lithium, cobalt, and nickel from old batteries.

The Tesla Roadster in 2008, which showcased the potential of Li-ion batteries for electric vehicles. Tesla's success spurred further investments and research in battery technology, leading to significant advancements in battery performance, cost reduction, and safety. The past decade has seen the emergence of several innovative battery technologies, including solid-state batteries, which promise even higher energy density and improved safety compared to traditional Li-ion batteries.

Most of our modern world is powered by Lithium batteries or batteries having similar factors but due to COVID-19 pandemic, the global Automobile industry faced a slowdown because lockdown situations in several regions which in turn restricted the production of electric vehicles. But with more people adopting social distancing norms, idea of adopting clean energy options is also spreading. That will result into greater demands and progressive growth of global electric vehicle market. Lockdown situations gave enough time regions for industries to bring more improvement and innovations into battery technology.

Electric vehicle is quieter than other conventional vehicles so that they reduce noise pollution. Another important aspect is zero carbon emissions from the vehicle. This important factor is providing reduction in environmental pollution. Using electricity as the fuel of the vehicle can save us from raised prices of petrol/diesel. Electric vehicles are safer and more stable with lower center of gravity. Bulk production of batteries results into lower price for overall electric vehicle. This can be appropriate factor for consumer. Technology for the batteries is also improving which makes it affordable for larger population. Industries are emphasizing on producing new variations and technologies related to electrical.

At present there are three types for electric vehicle based on their propulsion system which are BEV (battery electric vehicle), PHEV (Plug-in hybrid electric vehicle) and HEV (hybrid electric vehicle). In those segments, BEV has the largest market share globally followed by PHEV and HEV. BEV has almost 60% of market share covered and rest 40% is covered by PHEV and HEV with fluctuating figures.

Passenger vehicles represent the largest segment in the electric vehicle battery market, driven by the growing consumer demand for cleaner and more efficient modes of transportation. The increasing awareness of environmental issues, coupled with stringent government regulations aimed at reducing carbon emissions, has significantly boosted the adoption of electric cars and SUVs. Many countries offer various incentives such as tax rebates, subsidies, and reduced registration fees to promote the purchase of electric vehicles, making them more attractive to consumers. Additionally, advancements in battery technology have led to improvements in driving range, charging times, and overall vehicle performance, further accelerating market growth.

Automakers are investing heavily in the development and production of new electric vehicle models, which are often marketed as premium, high-tech alternatives to traditional internal combustion engine (ICE) vehicles. The commercial vehicle segment, which includes buses, trucks, and delivery vans, is also witnessing significant growth in the demand for electric vehicle batteries. This segment is primarily driven by the increasing need for sustainable and cost-effective solutions in the logistics and public transportation sectors. Companies are increasingly investing in electric delivery vehicles to reduce operational costs and improve their environmental footprint. For instance, logistics giants like Amazon and UPS are expanding their electric vehicle fleets to achieve their sustainability goals. Furthermore, governments are implementing policies and providing incentives to encourage the adoption of electric buses in public transportation systems, aiming to reduce urban air pollution and improve public health.

The Asia-Pacific (APAC) region is leading the global electric vehicle (EV) battery market due to several factors, including high demand for EVs, supportive government policies, and rapid technological advancements. The demand for EV batteries in APAC is driven by the increasing adoption of electric vehicles, particularly in countries like China, India, and South Korea. Governments in these countries have implemented policies to promote the use of clean energy vehicles, such as subsidies and tax incentives, which have significantly boosted the EV market. Additionally, the growing awareness of environmental issues and the need to reduce carbon emissions have encouraged consumers to switch to electric vehicles.

Companies like China's CATL are at the forefront of this innovation, introducing next-generation batteries with higher energy density, which allows for longer driving ranges and faster charging times. Another notable feature is the increasing use of lithium-ion batteries, which dominate the market due to their efficiency and reliability. The APAC region is also investing heavily in battery manufacturing infrastructure, with countries like China and South Korea leading the way in production capacity and technological advancements.

Major Companies present in the market

Contemporary Amperex Technology Co. Limited, LG Chem Limited, Panasonic Corporation, BYD Company Limited, Samsung SDI Co. Limited, SK Innovation Co Limited, East Penn Manufacturing Company, Clarios (US) Formally Know Johnson controls inc, GS Yuasa International Limited, Mitsubishi Corporation.

Considered in this report

• Geography: Global
• Base year: 2024
• Estimated year: 2025
• Forecast year: 2030

Aspects covered in this report

• Global electric vehicle battery market with its value and forecast along with its segments
• Region-wise electric vehicle battery market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Regions covered in the report

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

Types of batteries in the report

• Lithium-Ion battery
• Lead Acid battery
• Others (Nickel Metal Hybrid battery, Sodium Ion battery and Solid state)

By Propulsion Type in the report

• Battery Electric Vehicle
• Plug-In Hybrid Electric Vehicle
• Hybrid Electric Vehicle

Type of Vehicle in the report

• Passenger Vehicle
• Commercial Vehicle

The approach of the report

This report consists of a combined approach of primary as well as secondary research. Initially, secondary research was used to get an understanding of the market and listing out the companies that are present in the market. The secondary research consists of third party sources such as press releases, annual report of companies, analyzing the government generated reports and databases.

After gathering the data from secondary sources primary research was conducted by making telephonic interviews with the leading players about how the market is functioning and then conducted trade calls with dealers and distributors of the market. Post this we have started doing primary calls to consumers by equally segmenting consumers in regional aspects, tier aspects, age group, and gender. Once we have primary data with us we have started verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to EV battery industry, government bodies and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.

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