The global lithium-ion battery market size is estimated to grow from USD 44.2 billion in 2020 to USD 94.4 billion by 2025; it is expected to grow at a CAGR of 16.4%. The growth of this market is likely to be driven by the excellent features of li-ion batteries, increasing adoption of consumer electronics, and growing R&D initiatives by different organizations & battery manufacturers. Moreover, an increase in demand for plug-in vehicles, rising need for automation and battery-operated material-handling equipment in industries, propelling demand for smart devices and other industrial goods, and high requirement of lithium-ion batteries for industrial applications are other key driving factors.
Lithium-Ion Battery Market and Top Applications
Consumer Electronics – Continuous technological developments in consumer electronics have boosted the growth of the lithium-ion battery market. Li-ion batteries are in high demand for consumer electronics applications because they offer higher density, better durability, offers less recharge time, and more energy storage than other batteries. Lithium-ion batteries are a state-of-the-art power source for all modern consumer electronic devices. Being environment-friendly, lithium-ion batteries are widely accepted by electronics manufacturers.
Automotive − The automotive industry is expected to be one of the major segments for lithium-ion batteries. Battery-driven vehicles such as electric vehicles, e-bikes, and automated guided vehicles, are major consumers of lithium-ion batteries. The market for these vehicles is expected to grow due to increasing adoption and awareness of EVs, partly driven by the adoption of various environmental norms and emission regulations. This has resulted in an increase in the demand for Li-ion and Ni-Mh batteries.
Industrial – Lithium-ion batteries are used in various industrial applications. These batteries provide advantages in terms of carbon emissions and safety in underground environments. Batteries with high energy density and longer backup are required to improve the efficiency and performance of industrial equipment. Rapid infrastructural growth and support from governments and industry associations for the adoption of lithium-ion batteries are boosting the demand for construction and mining equipment, which is further leading to the growth of lithium-ion batteries in the industrial sector.
Power − The power industry is working on generating renewable energy and storing it for multiple uses. Attributes such as low cost, less space required for installation, and low self-discharge rate are some of the driving factors for the adoption of lithium-ion batteries in smart grid and renewable energy storage systems. The lithium-ion battery technology is being used in power plants to achieve maximum efficiency. These batteries are more resistive to extreme temperature situations, making them suitable for use in remote locations and for thermal management options.
Lithium-Ion Battery Market and Top Battery Types
Lithium Nickel Manganese Cobalt (Li-NMC) – Li-NMC batteries are preferred due to their low self-heating rate. Electric vehicles require high capacity and high power, which can only be provided by the NMC battery type. These batteries have a very low self-heating rate and are used in electric vehicles such as Nissan Leaf, Chevy Volt, and BMW. Like other lithium-ion battery varieties, NMC batteries can have either a high specific energy density or a high specific power. Other application areas of Li-NMC batteries are e-bikes, power tools, medical equipment, and other electric powertrains.
Lithium Iron Phosphate (LFP) – The LFP technology is used in medium-power traction applications (AGV, E-mobility) or heavy-duty applications (marine traction, industrial vehicles, etc.) due to its high power density. The long service life of the LFP battery and the possibility of deep-cycling makes it suitable for energy storage applications (stand-alone applications, off-grid systems) or stationary use in general. The LFP battery has a long life cycle, high current rating, good thermal stability, enhanced safety due to better tolerance, and better performance and competence. These attributes make it fit for use in numerous high-power applications.
Lithium Cobalt Oxide (LCO) − The Lithium Cobalt Oxide (LCO) battery is the most popular type of lithium-ion battery after the LFP battery. LCO batteries have high energy density and are favored as a power source in consumer electronics such as smartphones, tablets, laptops, and digital cameras, among others. The LCO battery is made up of a graphite carbon anode and a cobalt oxide cathode with a layered structure. However, a short life span (two to three years), low thermal stability, and limited power density make them unsuitable for most other applications.
“Market for Lithium Nickel Manganese Cobalt is expected to grow at a higher rate during the forecast period.”The energy density of NMC batteries is its primary strength. It achieves this energy density with excellent stability due to the use of an optimum ratio of nickel manganese and cobalt. It also has a good charge and discharge cycle. These features enable its application in industries such as automotive.
NMC is used in batteries of laptops, mobile phones, tablets, automotive, power tools, and electrical storage systems. It is lightweight and can better serve slimmer and lighter tablets and smartphones. This property will lead to the gradual replacement of LCO and NCA cathode materials in batteries of notebooks, mobile phones, and tablets.
NMC is also used in HEV, EV, and PHEV as it offers higher safety, along with other desired properties. These advantageous properties of NMC are expected to increase its market share in the next five years and ideally positioned it to be the best material available in this industry.
Lithium-ion battery market for power capacity range 3,000–10,000 mAH is expected to grow at the highest rate during the forecast period.”
Lithium-ion batteries’ heavy power capacity makes them useful in electric vehicles and industrial uses. The increasing market of consumer electronics and smartphones is driving the need for batteries with high power capacity that can keep the device running for long hours and, at the same time, giving an optimum experience of the device due to large screen and power back up service.
“Lithium-ion battery market for automotive is expected to hold the largest market during the forecast period.”
Increasing adoption and awareness of EVs, government initiatives, and regulations supporting the adoption of EVs around the world are the factors that are driving the growth of the lithium-ion battery market. The market for these vehicles is expected to grow in the near future, partly driven by the adoption of various environmental norms and emission regulations. This has increased the demand for Li-ion batteries.
“Lithium-ion battery market for above 36 V segment is expected to hold the largest market during the forecast period.”
The majority of the manufacturers prefer above 36V lithium-ion batteries as they support and power high-current applications, and have a long life span. Lithium-ion batteries with this voltage range are the most demanded and used as they are equipped with high capacity and unmatched capabilities. These batteries are used in electric vehicles, marine, power, military, telecom, etc. These batteries offer higher power, longer life, and robust safety compared to lead-acid batteries, which boosts their demand in the market. These batteries feature a built-in automatic battery management system (BMS), which keeps the battery running at peak performance while preventing overcharging, overheating, and maximizing cell cycle life.
APAC to dominate the lithium-ion battery industry during the forecast period
APAC dominated the global lithium-ion battery market in 2019. The market mainly comprises China and India, which have considerable potential for many application areas for lithium-ion batteries. China being a global automotive manufacturing hub, holds immense potential for the growth of the lithium-ion battery industry. An increase in the production of electric vehicles and lithium-ion batteries used in vehicles is driving the market in China.
Furthermore, China is also one of the world’s leading producers of electronic devices. This is expected to drive the market across multiple applications in China. Also, the presence of several electronic manufacturers such as Panasonic (Japan), Sony Corp. (Japan), Samsung SDI (South Korea), and LG Electronics (South Korea) in the region is one of the key factors driving the market for lithium-ion batteries.
Europe accounted for the second-largest share of the global market in 2019. Presence and active association in Europe, such as the Association of European Automotive Industrial Battery Manufacturers and PRBA is supporting the use of lithium-ion batteries in different applications in safe mode by their set standards and certification. Extensive investments in the R&D of battery production and the well-established automotive sector in Germany, high adoption of electric vehicles in developed countries, and investments by governments for increasing battery production are the key factors driving the lithium-ion battery market in this region.
Key Market Players: BYD Company (China), LG Chem (South Korea), Panasonic (Japan), Samsung SDI (South Korea), BAK Group (China), GS Yuasa Corporation (Japan), Hitachi (Japan), Johnson Controls (Ireland), Toshiba (Japan), Lithium Werks (The Netherlands), CALB (China), Saft Groupe, (France), VARTA Storage (Germany), Farasis Energy (California), and Sila Nanotechnologies (California).
