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Electric Vehicles Battery Market Size

ID: MRFR//3383-CR | 188 Pages | Author: Swapnil Palwe| May 2023

A wide range of market factors influence the dynamics of the electric vehicle (EV) battery market. Focus on environmental sustainability is one key factor driving the market. Riding the wave of awareness about climate change, and with governments encouraging alternative cleaner forms of transportation, electric vehicles have been in demand. This has helped accelerate development of the market for electric vehicle batteries. This trend has been further accelerated by government regulations and policies aimed at reducing carbon emissions. These have caused automakers to invest in electric vehicle technologies, while also stimulating consumer interest in eco-conscious transportation solutions.
Moreover, the government incentives and subsidies promoting electric vehicle adoption further increase affordability of electric vehicles making them even more popular in future. Having the balance right between technological progress and cost-efficiency is a major consideration for manufacturers behind continued growth in the electric vehicle battery market.
Electric vehicle battery market factors include innovation and technological advances. In the areas of battery energy density, charging speed and overall performance are also intense research and development. Manufacturers hope to push lithium-ion battery technology, currently the market leader.
Electric vehicle battery market dynamics supply chain and material availability are important factors. Electric vehicles are on the rise and with them, demand for raw materials like lithium, cobalt and nickel. Stable and sustainable sources of these materials are key to keeping up with growing battery demand. Concerns on the environmental impact of battery production as well as scarcity of resources prompt market players to look for alternative materials and invest in recycling technology.
What shape the electric vehicle battery market are consumer choices and mainstream acceptance. With consumers becoming increasingly environmentally conscious and preferring energy-saving options, the need for electric vehicles and high performance batteries is growing. Driving range, charging requirements and the overall ownership experience are among factors that influence consumer choices. Driving consumer acceptance and market growth require effective marketing strategies, education about the benefits of electric vehicles, and a focus on creating a positive ownership experience.
Charging infrastructure is a major factor affecting the electric vehicle battery market. Widespread adoption of electric vehicles related to the availability and accessibility charging stations. As for range anxiety, aside from battery swapping systems and other expensive-to make methods as possible solutions to the problem, governments are also investing resources in expanding charging networks while some private enterprises are picking up this banner.

Covered Aspects:

Report Attribute/Metric Details
Market Size Value In 2022 USD 14.2 Billion
Market Size Value In 2023 USD 18.97 Billion
Growth Rate 33.60% (2023-2032)

Electric Vehicle Battery Market Overview

The Electric Vehicle Battery market industry is projected to grow from USD 18.97 Billion in 2023 to USD 192.55 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 33.60% during the forecast period (2024 - 2032). EV Battery Market Size was valued at USD 14.2 billion in 2022. Increased demand for electric automobiles, an uptick in new electric vehicle sales, and rising public awareness of environmentally friendly vehicles are the key market drivers enhancing the market growth.

Electric Vehicle Battery Market Overview

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Electric Vehicle Battery Market Trends

  • Increasing demand for electric vehicles and government initiatives are driving the market growth

Market CAGR for electrical vehicle battery is being driven by factors such as increasing demand for electrical vehicles, increasing fuel prices, etc. As environmental concerns about conventional cars continue to mount, governments all over the world are supporting the use of alternative fuel vehicles. EVs, or electric vehicles, are zero-emission vehicles that are gaining popularity for environmentally beneficial public transit globally. Several national governments offer financial incentives to encourage the use of EVS, including tax exemptions and refunds, subsidies, reduced parking/toll charges for EVS, and free charging.

Additionally, automobile manufacturers are concentrating on producing sophisticated electric vehicle technologies including smaller engines and batteries that are anticipated to have reduced emissions at comparably lower costs. Lithium-nickel-manganese-cobalt-oxide (NMC) is currently the material of choice for batteries used in electric vehicles. Additionally, the Tesla Model X, S, and 3 electric cars in the United States use lithium-nickel-cobalt-aluminum oxide (NCA). For instance, in March 2020, BYD Motors Inc. introduced the revolutionary blade battery for electric vehicles, which optimises the battery pack structure by above 50% when compared to the conventional lithium iron phosphate batteries. Additionally, battery safety is greatly improved. Businesses are developing business models that enable consumers to change or exchange EV batteries once they have been depleted, such as battery swapping and battery-as-a-service (BaaS). This reduces the time required for battery recharging, increasing customer satisfaction and removing one of the key deterrents for consumers from choosing EVS.

EVS's expensive manufacturing costs have been a major obstacle to their broad adoption. Rising demand for EVs is a result of the anticipated fall in battery prices and decreased R&D expenses, which will likely lower the overall cost of purchasing electric hatchbacks, crossovers, or SUVs to levels comparable to ICE vehicles. Due to the expensive rechargeable lithium-ion batteries needed for EVs, their cost is much higher than that of ICE vehicles

For instance, Level 3 EV charging can charge an EV in around 30 minutes to one hour and ultra-fast charging can also provide charging in 15-30 minutes, their long-term use damages the EV batteries. Their prolonged use wears down the EV batteries. Because of this, battery swapping emerged as a substitute for fast charging stations, and demand for it has increased over the past few years. This is driving the Electric Vehicle Battery market revenue.

Electric Vehicle Battery Market Segment Insights

Electric Vehicle Battery Type Insights

The Electric Vehicle Battery Market segmentation, based on battery type includes Lithium-Ion Battery, Nickel Hybrid Battery and Lead-Acid Battery. The largest revenue share was accounted for by lithium-ion battery. These battery’s superior energy density and lightweight construction are the main factors boosting adoption. Additionally, because lithium-ion batteries are safer than alternatives, there is an increase in demand for them in electric vehicles. Over the projection period, rapid charging sessions will also support market expansion.

Electric Vehicle Battery Vehicle Technology Insights

The Electric Vehicle Battery Market segmentation, based on Vehicle Technology includes Plug-In Hybrid Vehicle Electric Vehicles, Battery Electric Vehicles, and Hybrid Electric Vehicles. The battery electric vehicles segment accounted for the biggest market share in 2022, and it is predicted that it would maintain its dominance with the highest CAGR during the projected period. Over the projection period, a decrease in reliance on fossil fuels is expected to boost category expansion.

Electric Vehicle Battery End Market Insights

The Electric Vehicle Battery Market segmentation, based on End Market includes Aftermarkets and OEMS. Under the end market segment, the OEMS category saw the highest demand. This can be attributed to the EV industry's growing global production. Due to the increasing demand for replacement parts and components, the aftermarket sector is anticipated to grow more quickly in the near future.

Figure 1: EV Battery Market, by End market, 2022 & 2032 (USD billion)

EV Battery Market, by End market, 2022 & 2032

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Electric Vehicle Battery Regional Insights

By Region, the study provides the market insights into Asia-Pacific, Europe, North America and Rest of the World. The Asia-Pacific EV Battery market area will dominate this market, owing to an increase in the number of persons who use electric vehicle. In addition, over the projected period, the government's emphasis on the conversion of two- and three-wheelers into electric vehicles is anticipated to fuel demand market will boost market growth in this region.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: EV Battery Market Share By Region 2022 (%)

Electric Vehicle Battery Market Share by Region

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe Electric Vehicle Battery market accounts for the second-largest market share due to the adoption of electric vehicles, fueling the demand for batteries. This is due to the region's escalating number of pollution control norms and strict rules to combat climate change. Further, the German Electric Vehicle Battery market held the largest market share, and the UK Electric Vehicle Battery market was the fastest growing market in the European region

The North America Electric Vehicle Battery Market held a sizable portion of the market in 2022 belonged to North America. Market expansion is being driven by rising U.S. demand for BEVS. Growing government spending to speed up domestic component production and fortify the EV supply chain would therefore probably fuel market expansion in the area. Moreover, US Electric Vehicle Battery market held the largest market share, and the Canada Electric Vehicle Battery market was the fastest growing market in the region.

Electric Vehicle Battery Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Electric Vehicle Battery market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, Electric Vehicle Battery industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Electric Vehicle Battery industry to benefit clients and increase the market sector. In recent years, the Electric Vehicle Battery industry has offered some of the most significant electric vehicle batteries. Major players in the Electric Vehicle Battery market, including Automotive Energy Supply Corporation (Japan), Panasonic Corporation (Japan), BYD Company Limited (China) and others, are attempting to increase market demand by investing in research and development operations.

Panasonic Holdings Corp. creates, produces, and sells electrical goods. The Automotive segment focuses on in-vehicle electronics and infotainment, including next-generation cockpit systems, navigation systems, camera modules, onboard charging systems, and compressors that are integrated into inverters. This market for liquid crystal displays, motors, main batteries, rechargeable batteries, electromechanical and control equipment. According to a report from August 2022, Oklahoma was a top contender for the firm, a supplier to Tesla, to develop a new electric vehicle battery market production in the US. This would be in addition to the Kansas-based factory. Each would have roughly the same capacity.

In battery facilities design and engineering, their team consists of battery experts with distinguished operation and technical careers at the most prestigious battery manufacturers, such as Panasonic, BYD, LG, etc. on all types of battery formats, particularly batteries for EVs — hybrid, plug-in hybrid, and electric vehicles: They have highly competent battery design and battery plant engineering expertise in batteries for different uses, such as power tools, computers, cell phones, robotics, smart grids, etc. In 2022–2023, A state-of-the-art elemental pure lithium metal smelter and lithium alloy facility are the subject of a conceptual feasibility study by TRU Group with the goal to produce lithium metal and alloy of battery quality, the TRU Group's design of the lithium metal smelter will make use of the most modern and enhanced furnaces and processes.

Key Companies in the Electric Vehicle Battery market include

  • Automotive Energy Supply Corporation (Japan)

  • Panasonic Corporation (Japan)

  • BYD Company Limited (China)

  • Quallion (US)

  • LG Chem Ltd (South Korea)

  • Boston-Power (US)

  • Johnson Controls International (US)

  • Narada Power Source (China)

  • GS Yuasa Corporation (Japan)

  • Crown Battery Corporation (US)

  • Tianneng Power International(China)

  • and Hitachi Chemical Company (Japan)

Electric Vehicle Battery Industry Developments

July 2022 Panasonic decided to build its long-awaited U.S. vehicle battery plant in Kansas City in the U.S. In its new manufacturing plant, the business intends to invest up to USD 4 billion. As the auto industry transitions to electrification, Panasonic claimed that the factory would supply automakers with a "critical" amount of lithium-ion batteries.

September 2022 BYD unveiled its new e-Bus Platform and new blade batteries for commercial electric vehicles at the same time. The new e-Bus Platform will make its debut in Europe first. For its Commercial and Passenger EVs, BYD offers Blade Batteries, which are safer and more robust. The corporation wants to increase both domestically and, more importantly, internationally.

November 2021 Panasonic introduced its brand-new Tesla-specific 4680 battery cell. The new battery, according to the manufacturer, offers five times more energy and six times more power. The new battery cell also has the potential to be more affordable, efficient, and long-range in tiny battery packs.

Electric Vehicle Battery Market Segmentation

Electric Vehicle Battery Market Type Outlook

  • Lithium-Ion Battery

  • Nickel Hybrid Battery

  • Lead-Acid Battery

Electric Vehicle Battery Market Vehicle Technology Outlook

  • Plug-In Hybrid Vehicle Electric Vehicles

  • Battery Electric Vehicles

  • Hybrid Electric Vehicles

Electric Vehicle Battery Market End Outlook

  • Aftermarkets

  • OEMS

EV Battery Market Regional Outlook

  • North America

    • US

    • Canada

  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Rest of Europe

  • Asia-Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Australia

    • Rest of Asia-Pacific

  • Rest of the World

    • Middle East

    • Africa

    • Latin America

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