Emergence of Next-Gen Batteries
New battery chemistries, such as sodium-ion and solid-state lithium batteries, could rule the European battery industry by 2040. The UK’s Faraday Institute (FI) attributes this to their lower-cost input materials and the sustainability of new chemistry types.
Market Share Projections
Under a ‘next-generation breakthrough’ scenario, these new battery technologies could emerge in 2027 and secure about a 50% market share by 2040. The lithium-iron-phosphate (LFP) batteries’ market share could grow to about 21% from the current 3%. Conversely, the market share of nickel-cobalt-manganese-oxide (NCM) could drop to a quarter from 84% today.
European Battery Market Growth
The FI forecasts a rapid growth in the European battery market, regardless of the chemistry. They predict that capacity will increase to about 1.4TWh by 2040 from nearly 400GWh in 2025.
Challenges for Next-Gen Technologies
Next-generation technologies could displace current lithium-based technologies. However, they require substantial research, investment, and scale-up to reach mass-market deployment.
Gradual Transition Scenario
In a ‘gradual transition’ scenario, carmakers adopt new technologies more slowly. This leads to a higher market share for proven battery chemistries such as LFP and NCM. The FI expects NCM market share to fall to 38% by 2040, giving way to increased usage of LFP cathodes, which grow to about 32% of the total EU market. Next-generation batteries make up a smaller volume overall, only reaching about 14% of the market.
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