Battery Market: How is lithium-ion the dominant Type?

From charging our laptops, phones, and cars to being used across power-storage solutions, the extensive use of batteries is evident in our everyday lives. And with the increasingly significant role played by electric storage, electric vehicles (EVs) and renewable power over the next decade, the global dependence on batteries will continue rising expeditiously.

The global battery market was valued at $117457.70 million in 2021 and is expected to grow at a CAGR of 15.68% during the forecast period 2022-2028.

The growth trend is attributed to the high demand for automotive applications, including rechargeable and non-rechargeable EV batteries. The increasing integration of electronics, fuel savings, rise in government incentives for cleaner transportation, and growth in the number of new hybrid and electric automobile models from OEMs are further propelling the expansion of the studied market.

Battery & Technology | Market Advancements

An electric battery is a power source consisting of one or more electrochemical cells that store chemical energy and convert it into electrical energy with external connections. These batteries are used in laptops, cameras, mobiles, electric vehicles, etc.

The manufacturing of electric vehicles is rising over time owing to the government's incentives, such as adopting electric vehicles with AI. These initiatives are expected to lower emissions while achieving greater transportation efficiency per unit of energy. This program creates a global demand for EV batteries such as lithium-ion, thereby promoting the growth of the studied market.

Currently, lead-acid, lithium-ion and nickel-based batteries are widely used battery types across the globe, with a combined market share of approximately 95%. Among all, Lithium-ion (Li-ion) batteries will probably account for the majority of the growth in the forthcoming years. This makes Li-ion the fastest growing battery type in the technology segment, with a CAGR of 18.39%.

Li-ion batteries are already used in a wide range of applications, including portable devices. It also supplies energy for electric vehicles (EV), medical equipment, and power tools. The high use of batteries is due to the unique properties of lithium that make charging and discharging much safer compared to other materials.

Further, the increasing popularity of consumer electronics on a global scale is projected to increase the usage of Li-ion batteries. Such a rise is led by significant developments and technologically advanced product launches by market players. For instance, Toshiba Corporation expanded its SCiB product offering by launching an innovative 20Ah-HP rechargeable lithium-ion battery cell that delivers high power and energy.

Developing Geographical Demographics

Asia-Pacific is evaluated to be the fastest and the largest growing region in the battery market, with a CAGR of 7.11% during the forecast period. The region is a major customer of batteries due to the growing automobile production and rapid industrial development. China and India are the main producers in the consumer electronics sector due to their low setup & production costs and competent labor pool.

Market Player's Strategic Initiatives

As automakers like General Motors, Volkswagen, and Ford Motor make grand declarations about moving toward an electrified, emission-free future, one thing becomes evident: they would require a lot of batteries. This results in intense competition from major battery manufacturers across the region.

The key participants depend on joint ventures and mergers & acquisitions to strengthen their market presence. Some notable initiatives by companies are:

• ZincFive and Stored Energy System partnered to provide an innovative and advanced plug-and-play generator starter solution for the existing field installations and new OEM generators.
• Urban Electric Power and Alchemy Industrial announced a partnership to launch Ohm Core, a residential energy storage system based on rechargeable alkaline batteries.
• Tesla signed a new long-term battery cell agreement with CATL with the intent to secure a large battery supply in the auto sector.

Concluding Statement

The enhancing technology and increasing demand and adoption of various batteries in various electronic devices are leading the battery market. Yet, the market faces restraint by factors such as safety issues related to battery usage, volatility in raw material prices, and issues relating to battery recycling.

Although, various safety standards and other related tests have been developed to analyze battery performance and meet the safety requirements. For instance, China's GB/T 31485–2015 standard safety test helps establish strict standards for lithium-ion batteries. Such vigorous tests related to battery safety ensure no problems in the future under normal working conditions.

FAQ

Q1) How is the market segmented in terms of battery type?

Based on battery type, the market is segmented into primary and secondary batteries.

Q2) How is the bargaining power of buyers in the market?

The bargaining power is high due to the significant number of players present in the market.

Q3) What was the impact of COVID-19 on the battery market?

Given that China is home to more than half of the world’s battery manufacturing facilities, COVID-19 considerably impacted the studied market.