Electric Vehicle (EV) Battery Market Size, Share & Trends Analysis Report By Battery Type (Lithium-Ion, Lead-Acid), By Propulsion Type (BEV, PHEV), By Vehicle Type (Two-Wheeler, Passenger Cars), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global electric vehicle (EV) battery market size was estimated at USD 44.69 billion in 2022 and is expected to grow a compound annual growth rate (CAGR) of 21.1% from 2023 to 2030. The growing emphasis of leading automakers on rolling out electric vehicles and rising battery demand for EVs are major factors behind the growth of the market. According to the International Energy Agency's (IEA) Global EV Outlook, 2023 report, the surge in demand for automotive lithium-ion batteries is primarily attributed to the growth in electric passenger car sales, resulting in an estimated 65% increase in demand, from approximately 330 GWh in 2021 to 550 GWh in 2022.

In addition, supportive government policies, growing consumer interest, and various strategies by automakers to speed up the electrification of new trucks, buses, and cars are contributing to the market growth. The growing developments in EV battery swapping technology and the introduction of swappable battery packs for EVs by several battery manufacturers are further fueling the industry's growth. For instance, in October 2021, Gogoro Inc. introduced its innovative battery-swapping system in China, the world's largest market for two-wheeler vehicles. The company teamed up with two of China's prominent vehicle manufacturers, Dachangjiang (DCJ) and Yadea, to launch Huan Huan, a battery-swapping brand, starting with Hangzhou and expanding to more cities in China in the future.

Furthermore, strategic collaborations between battery manufacturers, e-mobility providers, and energy suppliers are also expected to drive product sales in the forecast period. Leading suppliers in the market are utilizing the most advanced technologies to improve the durability and lifespan of batteries during usage. These suppliers are employing strategic measures and employing advanced techniques to attain their net-zero emissions goals while simultaneously enhancing the efficiency of batteries. These efforts lead to batteries with extended lifespans, reduced electronic waste, and a reduced environmental impact related to their production and utilization.

The increasing automotive production, mainly in China, Germany, Japan, Mexico, South Korea, and India, among other nations, is also a significant factor driving the market growth. The increasing government spending on developing EV charging infrastructure in numerous countries also contributes to the market’s growth. The growing inclination of consumers toward personal conveyance is further boosting the demand for EV batteries. However, volatility in raw materials prices, such as lithium-ion and lead acid, can potentially affect battery production costs and restrain market growth.

COVID-19 Insights

The global economy and the growth of the EV battery market have been negatively affected by the COVID-19 pandemic. Various nations encountered significant difficulties, including economic downturns and disruptions in supply chains, as a consequence of the pandemic. To curb the virus's transmission, governments across the globe implemented full-scale lockdowns, which, in turn, led to industry shutdowns and subsequent disruptions in supply chains. The lockdowns also resulted in a need for more labor and materials on a global scale, causing delays in the production and distribution of batteries. However, as the world recovers from the adverse impacts of the pandemic, the demand in the automotive sector is anticipated to increase. This increased demand will arise from increased demand for EVs, which will, thus, boost the demand for electric vehicle batteries.

Battery Type Insights

The lithium-ion battery segment led the market and accounted for more than 66.0% share of the global revenue in 2022. The segment is also anticipated to grow at the highest CAGR during the forecast period. The numerous benefits of lithium-ion batteries have led to their widespread adoption in electric vehicles. They offer significant advantages over lead-acid batteries, including being up to 60% lighter in weight and having a higher energy density, allowing for smaller and more space-saving battery packs. Lithium-ion batteries are also highly efficient and can be fully charged within just one to three hours, making them the preferred choice of electric vehicle manufacturers. As a result, there has been a rapid increase in the adoption of lithium-ion batteries in electric vehicles.

The others (solid-state battery, nickel-metal hydride, sodium-ion battery) segment is anticipated to grow at a significant CAGR during the forecast period. The increasing focus of several automobile manufacturers on developing EVs with solid-state battery technology is expected to boost segment growth. For instance, in February 2023, Nissan Motor Corp., an automobile manufacturer, announced that it is planning to bring its first electric car with a solid-state battery in 2028. The company is making progress in the development of solid-state batteries and is expected to have pilot production of these batteries by 2025. The engineering of the initial technology is anticipated to be completed by 2026, and the first mass-produced electric vehicle with this technology is expected to be available by 2028.

Propulsion Type Insights

The battery electric vehicle (BEV) segment dominated the market and accounted for more than 71.0% share of the global revenue in 2022. The segment is also anticipated to grow at the highest CAGR during the forecast period. BEVs are fully electric vehicles with rechargeable battery packs and no gasoline engine. The growing popularity of removable and rechargeable EV batteries can be attributed to the supportive government policies aimed at achieving net-zero emissions in the near future and the increasing consumer interest in BEVs. These batteries can be reused numerous times, thereby reducing waste and prolonging their lifespan, which is essential in achieving a zero-carbon footprint.

The plug-in hybrid electric vehicle (PHEV) segment is anticipated to grow at a significant CAGR over the projection period. PHEVs include a combination of batteries and another fuel source, such as diesel or gasoline, to power an internal combustion engine or other propulsion system along with an electric motor. While passenger cars constitute many plug-in hybrid electric vehicles, they are also available in various commercial and utility types, such as buses, vans, motorbikes, trucks, trains, and military vehicles. The current PHEV industry features several light-duty models, with the medium-duty models gradually making their way into the global market.

Vehicle Type Insights

The passenger cars segment accounted for over 40.0% share of the market in 2022. The growing sales of electric passenger cars such as sedans, hatchbacks, SUVs, and others (XUV, station wagon, and minivan) are propelling the segment's growth. According to IEA, the electric passenger car market is witnessing exponential growth as sales surpassed 10 million in 2022. The sales of electric cars are expected to remain robust through 2023. The first quarter of this year saw over 2.3 million electric cars sold, representing a growth of around 25% compared to the same period in 2022.

The two-wheelers segment is anticipated to grow at the highest CAGR over the forecast period. Currently, two-wheelers are one of the most electrified market segments; in developing economies and emerging markets, they outnumber cars. For instance, with its large two-wheeler market, India is among the leading countries promoting electric two-wheelers, supported by both national and local governments. On the other hand, the commercial light-duty vehicle segment is anticipated to grow at the second-highest CAGR during the forecast period. The commercial light-duty vehicle stock is also witnessing increasing electrification. Globally, the sales of electric light commercial vehicles (LCV) increased by over 90% in 2022 to over 310,000 vehicles.

Regional Insights

The Asia Pacific region dominated the market and accounted for more than a 51.0% share of the global revenue in 2022 and is expected to grow at the highest CAGR during the forecast period. Countries in the Asia Pacific region, especially China, India, and South Korea, have been witnessing a rising product demand over the past few years, in line with the growing preference for electric vehicles. Battery concentration is highly concentrated in China owing to the low maintenance and labor costs, ultimately boosting the market’s growth in the region. Furthermore, the presence of product manufacturers, such as Contemporary Amperex Technology Co., Ltd. (CATL); LG Energy Solution; BYD Company Ltd.; Panasonic Corp.; and Samsung SDI Co., Ltd.; supports the market growth.

Europe and North America have also been witnessing an accelerating EV battery demand due to the increasing sales of electric cars in these regions. Some prominent electric vehicle manufacturers, including Ford Motor Company, Bayerische Motoren Werke AG, and TeslaMotor Inc., are based in the U.S. and Germany. Therefore, the U.S. and Germany have taken the lead in producing and selling electric vehicle batteries. Moreover, electric car development is intensifying competition among market companies to deliver improved and more cost-effective solutions. The intense market competition bodes well for market growth.

Key Companies & Market Share Insights

The market players are continuously working toward new product development, upgradation of their existing product portfolio, and business expansion strategies. For instance, in April 2023, Hyundai Motor Group and SK Innovation Co.’s battery manufacturing division, SK on Co., Ltd., revealed their plans to form a joint venture for producing EV battery cells in the U.S. It is anticipated that the new facility would start the production of battery cells in the latter half of 2025, boasting an annual production capacity of 35 GWh. This capacity would be enough to support the manufacturing of 300,000 electric vehicles.

Key market players are engaging in strategic partnerships, which are harnessing the market’s growth. For instance, in October 2022, Contemporary Amperex Technology Co., Limited, in partnership with SAIC, a Chinese automobile manufacturer, and two oil companies, Sinopec and China National Petroleum (CNPC), formed a joint venture aimed at advancing electric vehicles featuring replaceable batteries. Some prominent players in the global electric vehicle (EV) battery market include:

• Contemporary Amperex Technology Co., Ltd. (CATL)

• LG Energy Solution

• BYD Company Ltd.

• Panasonic Corp.

• Samsung SDI Co., Ltd.

• SK Innovation Co., Ltd.

• Toshiba Corporation

• EnerSys, Inc.

• Hitachi, Ltd.

• Mitsubishi Corp.

Electric Vehicle (EV) Battery Market Report Scope

Global Electric Vehicle (EV) Battery Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the electric vehicle (EV) battery market report based on battery type, propulsion type, vehicle type, and region:

• Battery Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Lithium-Ion Battery

  • Lead-Acid Battery

  • Others (Solid-state Battery, Nickel-Metal Hydride, Sodium-ion Battery)

• Propulsion Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Battery Electric Vehicle (BEV)

  • Plug-In Hybrid Electric Vehicle (PHEV)

• Vehicle Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Two-Wheeler

  • Passenger Cars

  • Buses

  • Commercial Light Duty Vehicles

    • Three-Wheeler

    • Four-Wheeler

  • Others (Trucks, Trailers)

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

    • South Korea

  • Latin America

    • Brazil

    • Mexico

  • MEA

    • Kingdom of Saudi Arabia

    • UAE

    • South Africa