Electric Vehicle Battery Market Size
The global Electric Vehicle Battery market was valued at USD 27.26 Billion in 2021 and is expected to reach around USD 189.18 Billion by 2029, at a CAGR of about 27.4% between 2022 and 2029.
Electric Vehicle Battery Market Overview
An electric vehicle battery (EVB) or a traction battery is commonly used to power the electric motor of a hybrid electric vehicle (HEV) or battery electric vehicle (BEV). EV batteries are typically secondary or rechargeable batteries and are commonly consist of lithium-ion. EV batteries are particularly designed for high kilowatt-hour or ampere hour capacities.
Electric vehicle batteries, unlike SLI (starter, lighting, and ignition) batteries, are deep cycle batteries designed to power for long periods of time. EV batteries are typically characterized by specific energy, a comparatively high power-to-weight ratio, and energy density. A lighter and smaller battery is desirable as it reduces the weight of the vehicle and thereby improves its performance. Compared to liquid fuels, most battery technologies today have much lower specific energies and often affect the vehicle's maximum all-electric range.
COVID-19 Impact Analysis on Electric Vehicle Battery Market
Due to the outbreak of COVID-19, the total production and sales of new cars have stopped all over the world, but the impact on electric vehicles is positive. Year 2020 witnessed increased EVs sales as compared to the total number of EVs sold in 2019. But component manufacturing was adversely impacted, and smaller Tier II and Tier III producers confronted liquidity issues.
However, since the second half of 2020, the industry has made a slow recovery, with global PHEV and BEV shipments growing with more than 40% year-on-year. As per EV-Volumes estimates, market share of EV increased to 4.2% in 2020 from 2.5% in 2019 globally. In 2020, approximately 1.4 million plug-in EVs were sold in Europe nearly 137% increase as compared to 2019 sales.
Electric Vehicle Battery Market Dynamics
Increasing demand for electric vehicles across the globe, advancements in battery technology, favorable government regulations and policies, and the introduction of new plug-in EV models are drivers of the EV battery market.
Governments around the world are now promoting the adoption of vehicles that use alternative fuel sources due to concerns about the increasing environmental impact of conventional vehicles. Electric vehicles are emissions-free vehicles and are increasingly favored as clean public transport across countries. Governments in some countries offer financial incentives such as tax exemptions and discounts, reduced parking / tolls, subsidies, and free charging to encourage the adoption of electric vehicles. Therefore, the demand for EV batteries is increasing rapidly all over the world.
Electric Vehicle Battery Market Drivers
- Launch of new plug-in models by major EV manufacturers
- Increasing demand for electric vehicles
- Improvement in battery technology
Electric Vehicle Battery Market Restraints
- Concerns over battery safety
- Procurement concerns related to raw materials
Electric Vehicle Battery Market Opportunities
- Rising electric micromobility
- Introduction of the battery-as-a-service (BaaS) model
Electric Vehicle Battery Market, Segmental Analysis
The global electric vehicle battery market is segmented based on Battery Type, Propulsion Type, Vehicle Type, Battery Capacity, Battery Form, Material Type and region.
Electric Vehicle Battery Market Analysis, By Battery Type
Lithium-Ion battery type segment to remain dominant segment in the coming years
Based on Battery Type, global electric vehicle battery market is segmented into Lead-acid, Lithium-ion, Solid-state, Nickel-metal Hydride, and Others. In 2020, Lithium-ion battery type segment dominated the global market with more than 40% market share. Lithium-ion batteries are widely used type of battery in modern electric vehicles. Compared to nickel-metal hydride and lead-acid batteries, Lithium-ion batteries have a higher energy density. Their compact size makes them a favourite in the automotive industry.
For example, Nissan's lithium-ion battery technology makes it possible to store higher density lithium ions, thereby increasing travel distance. Alternatives such as supercapacitors and advanced batteries cannot simply replace lithium-ion batteries owing to their cost, performance, size, and weight.
Electric Vehicle Battery Market Analysis, By Propulsion Type
HEV segment dominated the electric vehicle battery market in 2021
Based on Propulsion Type, global electric vehicle battery market is segmented into Fuel Cell Electric Vehicle (FCEV), Plug-in Hybrid Electric Vehicle (PHEV), Hybrid Electric Vehicle (HEV) and Battery Electric Vehicle (BEV).
Hybrid Electric Vehicle (HEV) segment dominated the market in 2021 with revenue share of more than 40%. HEV use electric drive technology to limit the dependence on charging stations and bring reduced fuel consumption. HEVs are also cost effective and thus widely preferred which contribute to their large market share. Battery Electric Vehicle (BEV) segment is projected to register fastest growth in the coming years owing growing government emphasis to implement fuel economy regulations.
Electric Vehicle Battery Market, Regional Analysis
Asia Pacific accounted for largest share in 2021 and is expected to be one of the most lucrative markets
At regional level, Asia Pacific dominated the electric vehicle battery market in 2021 as a result of increase in the use of electric vehicles in China, Japan, India, etc. With increasing power purchase parity and growing urbanization, demand for lithium-ion batteries is estimated to grow at a faster rate in the developing countries of Asia Pacific.
China is one of the major markets for electric vehicles, and the growing adoption of electric vehicles in the country is in line with clean energy policies. In addition, the Chinese government offers both financial and non-monetary incentives to encourage the adoption of electric vehicles.
In 2021, Europe was second largest regional market for electric vehicle battery. Market growth in the European region is attributed to government funds and incentives to promote adoption of electric vehicle as these are highly priced. Presence of OEMs such as AB Volvo, VDL Groep offer tremendous growth opportunities for EV battery market. Market growth in European region is led by developed countries like Germany, Norway, UK, France, Spain, Denmark and Sweden.
North America is projected to be another significant regional market for EV battery and growth in this region is led by U.S. followed by Canada. Growth in North America is expected to be driven by increasing emphasis of government on use of clean, renewable sources and growing focus of OEMs in this region to eliminate the risk of sourcing and supply chains from single region like China.
Latin America and Middle East and Africa regions
are forecasted to register moderate growth in the coming years.
Electric Vehicle Battery Market, Key Players
- Contemporary Amperex Technology Co., Ltd. (CATL)
- BYD Company Ltd.
- Samsung SDI Co., Ltd.
- LG Chem
- Toshiba Corporation
- Mitsubishi Corporation
- SK Innovation Co., Ltd
- East Penn Manufacturing Company
- Vehicle Energy Japan Inc. (Hitachi Chemical Co., Ltd.)
- Envision AESC Group Ltd.
- Exide Industries Limited
- GS Yuasa International Ltd.
- A123 Systems (subsidiary of Wanxiang Group)
Electric Vehicle Battery Market Scope
|Market Size in 2021||USD 27.26 billion|
|Market Size in 2029||USD 189.18 billion|
|CAGR (%)||27.4% from 2022 to 2029|
|Historic Period||2018 – 2020|
|Forecast Period||2022 – 2029|
|Segments Covered||Battery Type, Propulsion Type, Vehicle Type, Battery Capacity, Battery Form, Material Type|
|Regional Scope||North America, Europe, Asia Pacific, Latin America, Middle East & Africa|
|Key Companies Profiled||Contemporary Amperex Technology Co., Ltd. (CATL), BYD Company Ltd., Panasonic, Samsung SDI Co., Ltd., LG Chem, Toshiba Corporation, Mitsubishi Corporation, SK Innovation Co., Ltd, East Penn Manufacturing Company, Enersys, Vehicle Energy Japan Inc. (Hitachi Chemical Co., Ltd.), Envision AESC Group Ltd., Exide Industries Limited, GS Yuasa International Ltd., and A123 Systems (subsidiary of Wanxiang Group) and others|
Electric Vehicle Battery Market Segmentation
Electric Vehicle Battery Market, By Battery Type
- Nickel-metal Hydride
Electric Vehicle Battery Market, By Propulsion Type
- Battery Electric Vehicle (BEV)
- Hybrid Electric Vehicle (HEV)
- Plug-in Hybrid Electric Vehicle (PHEV)
- Fuel Cell Electric Vehicle (FCEV)
Electric Vehicle Battery Market, By Vehicle Type
- Passenger Cars
- Vans/Light Trucks
- Medium & Heavy Trucks
- Off-highway Vehicles
Electric Vehicle Battery Market, By Battery Capacity
- <50 kWh
- 50-110 kWh
- 111-200 kWh
- 201-300 kWh
- >300 kWh
Electric Vehicle Battery Market, By Battery Form
Electric Vehicle Battery Market, By Material Type
- Natural Graphite
Electric Vehicle Battery Market, By Region
- North America
- Rest of North America
- Rest of Europe
- Asia Pacific
- Southeast Asia
- Rest of Asia Pacific
- Latin America
- Rest of Latin America
- Middle East and Africa
- Saudi Arabia
- South Africa
- Rest of Middle East and Africa