Electric Vehicle (EV) Battery Market

Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2027)

$3,000.00

Quality Assured

We standby our reports on quality we promise.

Confidentiality Assured

All interactions and sensitive information remain confidential.

Custom Research Service

Undertaking exclusive research tailored for your business.

Electric Vehicles Align with Sustainable Mobility Revolution

Electric energy utilization for powering different modes of transportation has evolved drastically over the past decade. Commercialization of electric vehicles (EVs) has gained significant momentum in recent years. A paradigm shift in the mobility and energy solutions has made it clear that the automotive industry is at the cusp of a mobility revolution. Globally, automakers have experienced the demand growth of electric vehicles with the growing end user acceptance. Growth prospects of electric vehicle battery market will be stemming from the promising electric vehicle trend.

A Steady and Balanced Shift from Conventionally Powered Vehicles Towards Electric Vehicles Stimulates EV Battery Market Growth

Rising pollution levels combined with radically changing climatic conditions are creating pressure on manufacturers towards developing more effective and sustainable transportation solutions. Gasoline- and diesel-powered vehicles are losing their appeal and are pinned down for harmful emissions and high cost of ownership.

On the other hand, alternative fuel powered vehicles that release negligible pollutants and have low maintenance are emerging swiftly. As a result, fossil fuel powered vehicles are encountering competition from electric vehicles, especially in the developed nations with favourable EV policies and infrastructures in place.

As per the Energy Information Administration (EIA), the second largest energy consumer in the U.S. is transportation sector. About 80-90% of the energy consumed by the transportation sector comes from gasoline. Globally, transportation sector represents a significant share of the total greenhouse gases (GHGs).

Lack of shift from the internal combustion engine (ICE) vehicles shall contribute towards tremendous growth in carbon emissions, emanating from the transportation sector. This is highly expected to be driven by emerging economies like China and India. Electrification is expected to reduce emissions, minimize oil dependency and has a potential to curb oil prices and control oil price volatility.

In California, the transportation sector constitutes closely 35% of GHG emissions. With the urge to meet air quality standards due to mounting health concerns and greenhouse gas emissions (GHG), California deployed the Zero Emission Vehicle (ZEV) program. The program is a measure of the California Air Resources Board’s (CARB) advanced clean car package under different coordinated standards. This program regulates the smog-causing pollutants and GHG emissions released by internal combustion engine (ICE) vehicles. ZEV created a market floor, which is observing a demand surge, with other states likely to follow suit.

In the recent past, transition towards sterner emission norms in countries like China, India, and Japan, in addition to some European countries, has urged automakers to emphasize explicitly towards achieving better fuel efficacy with low carbon footprint. This is likely to propel the demand for vehicle electrification in the foreseeable future, which in turn would fuel electric vehicle sales.

Tesla, GM, Lucid, BMW, Nissan, among other key players are leading the path for vehicle electrification, while rest of the players are likely to follow the suit. Major automakers have started to launch newer EV models to capitalise on the demand uptick for EV batteries.

Major commitments from automakers like Volvo include the planned end of ICE vehicles starting 2019 and investing in EV. Additionally, VW Group has been scheduling plans to offer over 70 EV options by 2025, Ford increasing its EV investments from US$ 4.5 Bn to US$ 11 Bn.

Electrification Paving the Path for Opportunistic Growth

With strong charging infrastructure network in Europe, China and the U.S., the market witnesses strong demand growth. EV demand grew almost 40% and 80% depicting upward trajectory in the U.S. and European countries respectively, during 2017-2018. This is likely to project strong potential of EV battery.

It is less surprising that the vehicle sales plummeted significantly during the first half of 2020. During the first half, the overall vehicle sales declined by nearly 35% in Germany compared to 2019 and during the strict lockdown of April, the sales historically slumped by 61%. Nonetheless, electric cars segment has bucked the trend and outperformed despite the plummeting vehicle sales, given the present economical and heath scenario. Similar trends were observed in other European countries too that aided the market growth by nearly 25-28%.

Rapid development in commercial vehicle electrification has been rejuvenating the market growth. Public transportation and logistics vehicles are the backbone of the urban sector. European countries along with Australian and some of the ASEAN countries observed higher demand for public transit system. Electrification of the public transit system shall unlock doors to new opportunities for market growth.

Existing transportation facilities are likely to be inadequate in the coming years. This, in turn, is likely to pose a new opportunity for the OEMs and market expansion. With emission norms getting stricter, most of the OEMs have aligned their product portfolios to EVs and are supporting vehicle electrification through many initiatives and EV infrastructure support system.

The Dominoes are Falling Due to Supply Chain Disruption

Robust penetration of electrified vehicles in the market is likely to confront with different challenges. Among several other challenges, the regulatory policies, incentive schemes and charging infrastructure network shall be critical for regional market proliferation. Additionally, some of the structural factors play an impeccable role in reviving the vehicle sales. For instance, weakened consumer confidence level, lesser households replacing their vehicles under normal scenario and decline in average routine commutation due to the pandemic has overall caused turmoil.

Comparatively, vehicle with same specification and driving pattern, the oil consumption is progressively lesser, while the cost is progressively higher, whilst transitioning from ICE to EVs. The anticipated high EV battery cost of near US$ 400 per kWh over ICE vehicles is impacting the electrification demand. In order to compete with the ICE vehicles, the battery cost and the energy density of batteries need to be at par, for e.g. US$ 300 per kWh.

The coronavirus outbreak affected overall industrial development. As a result, the rapid expansion days continue to remain paused temporarily, primarily due to sporadic lockdown in different pockets of the world.

COVID-19 led to a massive disruption in the supply chain. Component suppliers are facing a ban on international transportation and logistics. Battery makers and electronic component suppliers have faced a setback. As a result, increasing overheads and decreasing operating profits, levied financial pressure on the manufacturers.

The demand in several countries is gradually surging owing to the long stint of pent-up demand, coupled with seasonal demand fluctuations. The fear of rising viral infection is expected to bolster a tendency to switch from public transport to personal vehicle, thereby supporting the market growth in the coming years.
Lithium-Ion Battery Type in Passenger Vehicles to Lead EV Battery Demand in Global Market

Technological developments have contributed towards better efficacy of the automobiles leading to the deployment of hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV). EVs in the global market, is contributed by these three types of electrified vehicles. The demand witnessed by PHEV and HEV was soberly higher until advanced lithium ion and similar battery technology were incorporated in BEVs.

Higher adoption rate of cobalt based EV batteries in passenger vehicles is anticipated to drive the Chinese market. The country is known to contribute nearly 60% share to the valuation of EV battery market, which can be attributed to the transition of Chinese suppliers from lithium towards cobalt based cathodes.

Demand for EVs across China & European Countries to Boost EV Battery Sales

By the year 2040, nearly half of the car sales are likely to be powered by electric powertrains, with approximately 45% market share contributed by Europe and 40% by China. EV sales grew substantially by 60%, through 2017-18; however, the sales followed a relatively slower growth by 9% in 2019. Slowdown of global EV sales in 2019 impacted EV industry growth due to cyclical demand fluctuation in automotive industry, supplemented by costlier and lesser energy-dense battery technologies.

Currently, European countries like Norway, Iceland, the Netherlands and Sweden are leading the race, followed by Finland and China, further followed by the U.S. and other key countries. Despite vehicle electrification is peaking in the European nations, EVs and EV batteries arenot manufactured in the same region. Due to cheap labour overheads Asian countries are stealing away the benefits of the same. As a result, a majority of the production hubs are currently concentrated in the Chinese regions. This has augmented the development of giga-factories in the Asian region. Moreover, economical EV models are bolstering the demand for EV battery in the Asian region, supplemented by government subsidies and incentives towards EV purchases.

Tech Giants Targeting Technological Synergy Through Corroboration

Phenomenal improvement has been achieved in the analysis, design and development of EV batteries through substantial R&D investments. The market is seemingly fragmented with major key players prioritizing alliances. Nonetheless the market is likely to expand during the forecast tenure with probable new entrants and existent players practising vertical integration.

Manufacturers are focussing towards developing cost-effective and sustainable solutions. Joint ventures and M&A will remain preferred strategies. Key manufacturers have collaborated with technology companies and battery makers to design more sophisticated models of EV battery.

Tech-giants are joining hands with other companies, universities and researchers to innovate high-density EV batteries. Upcoming supply contracts and new product developments are likely to keep the market upbeat. BYD Company Limited, Panasonic Corporation, Johnson Controls International PLC, SAMSUNG SDI Co., Contemporary Amperex Technology Co. Ltd., LG Chem, Ltd., and A123 Systems, are some of the key playersthat are steering the market.

I am interested

Electric Vehicle (EV) Battery Market

I would also like to request for

11 + 9 =

contact