Global Battery Demand to Quadruple by 2030
The global battery demand is expected to quadruple to 4,100 gigawatt hours (GWh) between 2023 and 2030 as the sales of Electric Vehicles (EVs) continue to rise. According to a new report by Bain & Company titled ‘Navigating the EC Battery Ecosystem,’ OEMs must refine their battery strategies in response to this anticipated growth.
Lithium-ion Batteries to Stay Dominant
Lithium-ion batteries have been and will continue to be the dominant force in the global EV battery market. Although emerging technologies such as solid-state and high-density sodium-ion batteries are in prototype and pilot manufacturing stages, their market shares are expected to stay in the single-digit range until at least 2030.
NMC and LFP Cathode Chemistries Lead the Way
Nickel manganese cobalt (NMC) and lithium-iron phosphate (LFP) chemistries currently dominate, making up more than 90% of Lithium-ion battery sales for EVs. In China, LFP will become more prevalent due to strong demand for mass-market EVs and well-established supply chains. LFP variants with better energy density, like M3P and lithium manganese iron phosphate (LFMP), are also emerging.
In the USA and EU, LFP will gain market share but remain smaller compared to China. Domestic LFP production in these regions is minimal, and the supply chains for iron and phosphorous are less mature. The cost advantage of LFP will be impacted by the costs of importing it from China. Additionally, some companies are exploring NMC variants with reduced cobalt, which could erode LFP’s cost advantage further. Geopolitical issues and import tariffs could complicate matters for western OEMs aiming for resilient supply chains.
Advancements in Lithium-ion Technology
The lithium technology stack will undergo significant changes in cathode and anode chemistries, cell form factors, and pack architecture. Innovations such as the cell-to-chassis technology, dry electrode manufacturing, and AI-powered battery management systems are on the horizon. These innovations promise to make Lithium-ion batteries cheaper and more efficient.
The Rise of Solid State and Sodium-Ion Batteries
By 2030, solid-state and sodium-ion batteries are likely to be the only new technologies to reach commercialization. Solid-state batteries offer higher energy density, better safety, faster charging, and longer life compared to NMC batteries. However, commercialization faces delays and is expected within three to four years. Sodium-ion cells provide lower costs, improved safety, and the ability to operate at lower temperatures. Although their energy density has improved, it is still lower than that of Lithium-ion batteries. Players plan to scale production by 2025, with possible commercial availability by the same year.
Growing Demand for Battery Recycling
The recycling of EV batteries is set to increase significantly with the expansion of feedstock volumes. New global regulations around collection, recycling, and the use of recycled content will further promote recycling. OEMs are exploring new business models, such as battery rentals, to maintain ownership of batteries and take responsibility for recycling.
Future innovations and a growing demand for efficient, cost-effective batteries will keep OEMs on their toes. By staying ahead of these trends, OEMs can better position themselves in an increasingly competitive market.
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