According to the new market research report "Lithium-Ion Battery Market with COVID-19 Impact Analysis, by Type (Li-NMC, LFP, LCO, LTO, LMO, NCA), Capacity, Voltage, Industry (Consumer Electronics, Automotive, Power, Industrial), & Region (North America, Europe, APAC & RoW) - Global Forecast to 2030", The global lithium-ion battery market size is projected to grow from USD 41.1 billion in 2021 to USD 116.6 billion by 2030; it is expected to grow at a CAGR of 12.3% from 2021 to 2030. The growth of the lithium-ion battery market is majorly driven by surging requirement for continuous power supply from critical infrastructures in wake of COVID-19, increasing demand for plug-in vehicles, growing need for battery-operated material-handling equipment in industries due to automation, continued development of smart devices, and growing adoption of lithium-ion batteries in renewable energy sector.
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COVID-19 impact on the lithium-ion battery market
The lithium-ion battery market was moderately impacted by the COVID-19 pandemic. In the prevailing COVID-19 situation, the expected growth of the market is expected to decline as the pandemic is restricting the supply of batteries and other components due to severe disruptions in businesses and the global economy. The current situation has impacted the supply chain of the battery industry. Key components for batteries are mainly manufactured in Asia Pacific. The COVID-19 situation has exposed the overdependency on the region for key raw materials, especially China. Battery manufacturers in the US, Germany, and Australia are highly impacted by the shutdown of operations in China and other Asia Pacific countries. It has also resulted in limited production leading to a serious decline in business inputs. The recovery depends on government assistance, as well as the level of corporate debt and how the companies and markets cope with the trimmed demand. After the recovery phase, the market is projected to grow at a moderate rate until 2030.
Market Dynamics
Driver: Increasing demand for plug-in vehicles
Lithium-ion batteries are a source of power for electric vehicles. The widespread use of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) has inevitably boosted the adoption of lithium-ion batteries, which is expected to increase further in the future. The growing adoption of EVs among consumers has helped boost the market for these energy-saving, pollution-reducing vehicles. The number of electric vehicles is constantly increasing, owing to advantages aligned with them such as less need to maintain the vehicle engine, reduced use of hazardous oil waste, and reduction in pollution caused by fuel combustion engines, along with the development of improved battery technologies. Electric vehicles are perceived as the future of the automobile industry and transportation systems; their increased adoption will eventually increase the demand for lithium-ion batteries.
Restraint: Safety issues related to storage and transportation of spent batteries
Spent batteries contain hazardous chemicals, including acids and heavy metals, such as mercury and lead. In July 2007, a fire incident caused by lithium-based batteries resulted in more than 132,000 liters of chemicals being set ablaze, causing the closure of 2 major motorways in the UK. It is mandatory to keep spent batteries in watertight containers and store them away from other flammable and combustible materials. It is also important to keep a Class D extinguisher and sand nearby as a precautionary measure in the event of a fire. As spent batteries hold residual charge, there lies a risk of unplanned discharge, which may cause harm to properties and people. All batteries, unless properly labeled, should be treated as holding charge and stored with care. Due to the aforementioned risks, the storage and transportation of spent batteries are regulated by state or national governments.
Opportunity: Declining prices of lithium-ion batteries
The price of lithium-ion batteries has been a major factor hindering adoption since their introduction in the 1990s. A lithium-ion battery consists of many components. The primary component of any lithium-ion battery is the cell, which accounts for almost 50% of its cost; electronics, assembly, and packaging account for the rest. However, recent developments and claims made by lithium-ion battery manufacturing companies and automobile companies suggest that the price of these batteries is expected to decline substantially. According to General Motors Company (US), the cost of a cell is expected to drop to USD 100 per kWh by 2021. Developments such as manufacturing on a large scale, declining price of components, and adoption of advanced technologies to boost battery capacity are some of the factors leading to a decline in price. A reduction in the price would catalyze the adoption of these batteries across various new applications.
Challenge: Disruptions in supply chain of batteries and related components caused by COVID-19
The outbreak and the spread of the COVID-19 have impacted the energy industry supply chain, particularly renewable energy technologies and battery energy storage systems. The key components used in battery energy storage systems are mainly manufactured in APAC. The pandemic has exposed the overdependence of the world on the region, especially on China, for key raw materials. Manufacturers of energy storage systems in the US, Germany, and Australia are severely impacted by the shutdown of operations in China and other countries of APAC.
APAC is projected to be the largest market for lithium-ion battery from 2021 to 2030.
APAC accounted for the largest share of the lithium-ion battery market in 2020. The leading players contributing to the growth of the market in the region are JAC Motors (China), BYD Co. Ltd. (China), BAIC Group (China), SAIC Motor Corporation Limited (China), Nissan Motor Company Ltd. (Japan), Mitsubishi Motors Corporation (Japan), and Toyota Motor Corp. (Japan), among others. Continuous developments in the consumer electronics and automotive verticals have led to an increase in the application of lithium-ion batteries as they offer various advantages, such as high power capacity, increased safety, and reduced pollution. However, the outbreak of COVID-19 has impacted the manufacturing facilities of all verticals across the world, forcing them to shut down. However, production has resumed in a few facilities in China, thereby initiating the manufacturing of some essentials.
BYD Company (China), LG Chem (South Korea), Contemporary Amperex Technology Co. Ltd. (CATL) (China), Samsung SDI (South Korea), Panasonic Corporation (Japan), BAK Group (China), GS Yuasa Corporation (GS Yuasa) (Japan), Hitachi (Japan), Clarios (Germany), and Toshiba Corporation (Japan), are some of the major players in lithium-ion battery market.
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