Electric Vehicle (EV) Battery Market Analysis by Vehicle Type (Passenger Car, Commercial Vehicle, and Two-Wheeler); by Battery Type (Lithium-Ion Battery, Nickel Metal Hydride Battery, and Lead Acid Battery); and by Propulsion Type (Battery Electric Vehicle, Hybrid Electric Vehicle, and Plug-in Hybrid Electric Vehicle) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4770 | Published Date: Mar 30, 2023
The global electric vehicle (EV) battery market size is estimated to reach USD 624.07 Billion by the end of 2035 by growing at a CAGR of 22% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of electric vehicle (EV) was USD 57.4 Billion. The growth of the market can be attributed to the rising need to save oil and gas, this factor is propelling nations all across the world to deploy electric vehicles. Around 50 TWh of electricity, or less than 0.5% of current global final electricity consumption, was used by the world's EV fleet in 2021. Moreover, in the same year, the adoption of EVs reduced oil consumption by about 0.3 Mb/d. In order to comply with the Net Zero Scenario in 2030, EVs would need to replace more than 7 Mb/d of oil.
In addition to these, factors that are believed to fuel the market growth of electric vehicle (EV) batteries include rising demand for electric vehicles which in turn is likely to boost the demand for batteries. According to the International Energy Agency, after ten years of exponential development, the number of electric cars sold worldwide reached 10 million in 2020, a rise of 43% over 2019. Moreover, in 2020, battery electric vehicles (BEVs) made up two-thirds of the stock and all new electric car registrations. Furthermore, in 2021, around 6.6 million electric cars were sold and sales of electric vehicles accounted for about 10% of all vehicle sales worldwide.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
22% |
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Base Year Market Size (2022) |
USD 57.4 Billion |
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Forecast Year Market Size (2035) |
USD 624.07 Billion |
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Regional Scope |
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Growth Drivers
Challenges
The global electric vehicle (EV) battery market is segmented and analyzed for demand and supply by vehicle type into passenger car, commercial vehicle, and two-wheeler. Out of the three types of electric vehicle, the passenger segment is estimated to gain the largest market share in the year 2035. The growth of the segment can be attributed to the rising demand for passenger electric cars. The demand for passenger electric vehicles is rising quickly; the International Energy Agency predicts that by 2022, almost 13% of all new cars sold are to be electric. Furthermore, regionally speaking, in 2020, 35 million electric passenger cars were sold in China, followed by Europe, where 1.8 million cars were sold. Moreover, the need to reduce air pollution by passenger vehicles is expected to boost the segment growth. Passenger cars contribute heavily to air pollution, therefore substituting gas-passenger cars with electric cars is likely to be a great solution and is also expected to boost the market growth. About three billion metric tonnes of carbon dioxide emissions from passenger cars were produced globally in 2020.
The global electric vehicle (EV) battery market is also segmented and analyzed for demand and supply by battery type into lithium-ion battery, nickel metal hydride battery, and lead acid battery. Amongst these three segments, the lithium-ion battery segment is expected to garner a significant share in the year 2035. The growth of segment is expected to grow on the account of rising demand for lithium-ion batteries. According to projections, the demand for lithium-ion batteries would rise by an astounding factor of eleven between 2020 and 2030, reaching more than two terawatt-hours. On the other hand, compared to lead acid batteries, lithium-Ion batteries have a higher energy density and a longer lifespan. Owing to this, lead acid batteries are being phased out of many applications, including grid and transportation, and being replaced by lithium-ion batteries.
Our in-depth analysis of the global electric vehicle (EV) battery market includes the following segments:
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By Vehicle Type |
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By Battery Type |
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By Propulsion Type |
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The market share of electric vehicle (EV) battery in Asia Pacific, amongst the market in all the other regions, is projected to be the largest with a share of about ~35% by the end of 2035. The growth of the market can be attributed majorly to the increasing demand for electric vehicle. In China last year, sales of electric and plug-in hybrid vehicles nearly doubled. In 2022, around 6 million EVs and plug-ins were sold in China. China fixed its position as the world's largest EV market; more than four million all-electric vehicles were sold in China which is five times more than those made in the United States. Moreover, the growing demand for electric batteries is also expected to boost segment growth. The current demand for lithium-ion battery in India is around 3 GWh, but that demand is anticipated to increase to nearly 20 GWh by 2026 and about 70 GWh by 2030.
The North American electric vehicle (EV) battery market is estimated to be the second largest, registering a share of about ~25% by the end of 2035. The growth of the market can be attributed majorly to the increasing investment for boosting the manufacturing of electric vehicle. In the manufacturing of electric vehicles and batteries, the United States is now prepared to draw the greatest amount of foreign investment. Since President Biden's appointment in 2021, companies have announced investments totaling around USD 210 billion in the Electric Vehicle (EV) Battery Market. In addition to this, with President Biden's approval of the Inflation Reduction Act and Bipartisan Infrastructure Acts, the federal government's commitment to this international EV race is being witnessed by the industry in the United States. The two bills enable the federal government to invest almost USD 245 billion in electric vehicles, batteries, and charging stations in America.
Further, the market in Europe, amongst the market in all the other regions, is projected to hold a significant the share by the end of 2035. The growth of the market can be attributed majorly to the rising demand for electric vehicle in the region. In the EU-27, the adoption of electric vehicles and vans increased significantly in 2021. Nearly 1,800,000 electric vehicle registrations were made for the year, up from around 1,061,000 in 2020. In only a single year, this reflects an increase in the share of all new car registrations from around 11% to nearly 18%. Besides this, the EU-27 saw the sale of nearly 38,000 electric vans in 2021, accounting for around 3% of the market and an increase of about 1.0 percentage points over 2020.
BYD Company Ltd. announced the launch of Blade Battery which help fix battery safety problems while simultaneously establishing industrywide safety requirements. In comparison to typical lithium iron phosphate block batteries, the battery pack's space utilization has enhanced by over 50% owing to its optimized battery pack construction.
Honda Motor Co., Ltd. announces the collaboration with LG Energy Solutions to launch a joint venture battery plant in Fayette County, Ohio. The new production facility will be ready by the end of 2024, by the end of 2025, the facility hopes to begin mass-producing pouch-type lithium-ion batteries with a production capacity of about 40GWh annually.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Payel Roy, Dhruv Bhatia
Ans: Increasing demand for electric vehicles, rising innovation in batteries, and growing need to save oil and gas are the major factors driving the market growth.
Ans: The market size of electric vehicle (EV) battery is anticipated to attain a CAGR of 22% over the forecast period, i.e., 2023 – 2035.
Ans: Need for the mining of rare minerals impacts environment, and dangers associated with batteries estimated to be the growth hindering factors for the market expansion.
Ans: The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Panasonic Corporation, LG Energy Solution Ltd, Contemporary Amperex Technology Co. Limited, Samsung SDI Co. Ltd, and BYD Company Ltd., SK Innovations Co. Ltd., SVOLT Energy Technology Co., Ltd., Primearth EV Energy Co., Ltd., Vehicle Energy Japan Inc., and Honda Motors Co., Ltd.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: Ans: The market is segmented by vehicle type, propulsion type, battery type, and by region.
Ans: The passenger vehicle segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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