The electric vehicle (EV) battery market is projected to surpass 415.9 billion dollars (387.666 billion euros) in the early years of the next decade, according to a report by Meticulous Research.
This forecast anticipates a Compound Annual Growth Rate (CAGR) of 33.1 per cent through 2031.
EV batteries, crucial for both purely electric and plug-in hybrid cars, are expected to experience significant growth driven by governmental policies and regulations aimed at reducing battery prices and increasing manufacturer investment.
However, the report warns that potential lithium extraction capacity shortages and the low energy density of lithium-ion batteries could impede market growth.
Despite these challenges, the report suggests that the adoption of EVs in emerging economies, along with increased investments in extraction capabilities and technology deployment, could offer substantial growth opportunities in the coming years.
By type, lithium-ion batteries are expected to dominate the global EV battery market by 2024.
However, the analysis firm underscores the importance of securing battery supply chains for the automotive industry.
Consequently, several car manufacturers have formed alliances with cell producers to ensure a stable supply chain.
In April, BMW partnered with Croatia’s Rimac Technology to develop high-voltage EV batteries.
Meanwhile Hyundai signed a memorandum of understanding with India’s Exide Energy Solutions to supply batteries for its EVs, aiming to enhance competitiveness in the world’s third-largest automotive market.
Battery manufacturers are also ramping up research and development investments to create new technologies that reduce device size cost-effectively while enhancing performance.
In October 2023, Honda and General Motors announced a joint effort to develop affordable EVs, following their 2022 agreement to challenge Tesla’s sales dominance.
The report predicts that the Asia-Pacific region will lead the global EV battery market this year, with Europe expected to overtake in the near future.
By 2030, Germany is anticipated to have the largest battery manufacturing capacity in the continent.
Eastern European countries like Hungary and Poland have also attracted significant investments from major Asian battery manufacturers, thanks to their lower land and labour costs and proximity to the German automotive industry.
