Battery Market Size, Share & Industry Analysis, By Type (Lithium-ion Battery {Lithium Cobalt Oxide, Lithium Iron Phosphate, Lithium Manganese Oxide, Lithium Nickel Cobalt Aluminum Oxide, and Lithium Nickel Manganese Cobalt Oxide}, Lead-acid battery {Flooded and VRLA}, Nickel Cadmium Battery, Solid State Battery {Single-Layer and Multi-Layer}, and Others), By State (Primary and Secondary), By Application (Automotive, Consumer Electronics, Energy Storage System, Industrial, Railway, and Others), and Regional Forecast, 2024-2032

The global battery market size was valued at USD 121.94 billion in 2023. The market is projected to be worth USD 143.94 billion in 2024 and reach USD 581.35 billion by 2032, exhibiting a CAGR of 19.06% during the forecast period.

Batteries are a crucial element of the global energy system today and are set to play a vital role in achieving secure clean energy transitions. In the transport sector, they are vital for the millions of electric vehicles sold each year. In the power sector, energy storage is the fastest-growing clean energy technology. The versatility of batteries allows them to be used in utility-scale projects, behind-the-meter storage for households and businesses, and decentralized solutions such as mini-grids and solar home systems. Additionally, decreasing batteries costs is rapidly enhancing the competitiveness of electric vehicles and storage applications in the power sector.

The global impact of the COVID-19 pandemic on the market is moderate, as it hampered consumption in many end-use industries' growth resulting from supply chain disruption and social distancing norms. Furthermore, China, the U.S., and India are among the significant countries in the processing and manufacturing of energy storage technology. These countries experienced various regional and national level shutdowns of industrial operations to contain the spread of this viral infection, which led to a fall in demand for the battery.

The global market felt a moderate impact from the COVID-19 pandemic, with growth in in many end-use industries' stunned by supply chain disruption and social distancing restrictions. Moreover, the U.S., India, and China, as leading nations in the energy storage technology manufacturing faced various national and regional level shutdowns of industrial operations to curb the virus spread, which results in a drop in demand for the battery.

Battery Market Trends

Rising Demand for Automotive Applications Augment Market Dynamics

The automotive industry's expansion plays a vital role in the growth of the market. Governments worldwide are implementing regulations and incentives to promote the adoption of Electric Vehicles (EVs) and sustainable transportation solutions. For instance, the U.S., China, and European nations are offering subsidies, tax credits, and other incentives to encourage the transition to EVs. These policies create a favorable environment for the automotive industry to shift toward cleaner technologies, consequently increasing the demand for lithium-ion and lead acid batteries used in hybrid vehicles and auxiliary power systems. The Inflation Reduction Act in the U.S. and similar initiatives globally which represents a landmark piece of legislation in the U.S. aimed at addressing climate change, reducing healthcare costs, and promoting clean energy.

The automotive industry's growth, particularly in geographies such as China, Europe, and North America, significantly contributes majorly for the growth of lithium ion battery market. The surge in electric vehicle production, advancements in automotive manufacturing, and the rise of hybrid models are driving the demand for battery power. Established automotive manufacturing facilities in Germany, the U.K., and the U.S. are shaping the majority market. The automotive sector's emphasis on sustainable transportation solutions and the increasing adoption of EVs are further propelling the need for reliable and cost-effective energy storage solutions, where storage power plays a crucial role.

Battery Market Growth Factors

Strong Government Support for Rollout of EVs and Incentives for Storage are Expanding Markets 

Battery storage in the power sector occurred as the fastest-growing commercially available energy technology in 2023, with deployments more than doubling year-on-year. Significant growth was observed in utility-scale projects, behind-the-meter, mini-grids, and solar home systems that enhance electricity access. Moreover, Electric Vehicle (EV) deployment surged by 40% in 2023, with 14 million electric cars representing the vast majority of batteries used in the energy sector.

Subsidies and tax incentives play a significant role in making EVs more affordable for consumers. For example, the U.S. federal government offers tax credits of up to USD 7,500 for purchasing electric vehicles, making them competitive with conventional vehicles. Similar incentives are offered in China, Norway, and Germany, where EV adoption rates are among the highest globally.

Battery storage is essential for integrating renewable energy sources into the grid and ensuring a stable energy supply. Governments are providing various incentives to promote the adoption of storage systems. For instance, the California Self-Generation Incentive Program (SGIP) offers rebates for installing energy storage systems, encouraging households and businesses to invest in battery storage.

Flourishing Renewable Energy Sources to Promote Battery Market Growth

The active use of renewable energy sources in technologies converts surplus renewable energy, such as solar and wind power, into hydrogen or synthetic methane. This process provides a method for energy storage and helps in balancing the grid, reducing greenhouse gas emissions, and facilitating the integration of renewables into the energy system.

Renewable energy sources such as wind and solar are intermittent, producing energy only when the sun is shining or the wind is blowing. Power-to-Gas (P2G) provides a solution by converting excess electricity generated during peak production periods into hydrogen, which can be stored and used later. This conversion helps in addressing the challenge of intermittency, making renewable energy more reliable and increasing its share in the energy mix.

Denmark plans to leverage its abundant wind resources to produce green hydrogen. The Green Hydrogen Hub, a project in Denmark, aims to use excess wind power to generate hydrogen, which will be stored and used in various sectors. This project enhances energy storage capabilities and supports Denmark’s ambitious renewable energy and decarbonization targets.

The use of green energy sources in technology enables the conversion of surplus energy, such as wind and solar power, into hydrogen or synthetic methane. This method offers a valuable solution for energy storage, grid balancing, reducing greenhouse gas emissions, while supporting the integration of renewables into the energy system.

Since Green energy sources such as solar and wind are intermittent, generating energy only when the wind blows or the sun shines. Power-to-Gas (P2G) technology mitigates this by converting excess electricity producing during peak production periods into hydrogen, which can be stored and utilized later. This transformation adds in managing the intermittency challenge, making it extra reliable and rising their contribution to the energy mix.

Denmark plans to deploy its ample wind resources to create green hydrogen. The project in Denmark, Green Hydrogen Hub, aims to use surplus wind power to produce hydrogen, which will be stored and utilized across different industries. This project boosts energy storage capabilities and advancing country’s ambitious renewable energy and decarbonization goals.

RESTRAINING FACTORS

Fluctuating Raw Material Prices May Hamper Market Growth

The market is heavily reliant on raw materials such as lithium, cobalt, nickel, and graphite, which are used to manufacture batteries. Fluctuating raw material prices can significantly impact the growth of the market, making it challenging for manufacturers to maintain their profit margins and supply chain stability. One of the primary concerns is the volatility of lithium prices, as lithium is a crucial component in lithium-ion batteries, which dominate the market. The price of lithium has been fluctuating widely over the years, driven by factors such as changes in global demand, supply chain disruptions, and mining costs. When lithium prices rise, it increases the cost of production for manufacturers, making it difficult for them to maintain their profit margins. Equally, when prices fall, it can lead to reduced profitability and potential losses. These fluctuations pose significant challenges to the growth of the market. Manufacturers must navigate these challenges by securing stable supplies of raw materials at competitive prices, investing in research and development to improve efficiency and reduce costs, and diversifying their supply chains to mitigate risks associated with raw material price volatility.

Battery Market Segmentation Analysis

By Type Analysis 

Lithium-ion Batteries Dominate Due to High Efficiency and Wide Applications

Based on type, the market is segmented into lithium-ion battery, lead-acid battery, nickel–cadmium battery, solid state battery, and others.

Lithium-ion batteries hold a dominant battery market share due to its high efficiency and wide availability. Li-ion batteries have a higher exceptional energy density, offering up to five times more energy storage capacity than Nickel batteries. With their impressive capabilities, they can achieve rapid charging of up to 80% capacity and operate within a wide temperature range of -50°C to 125°C, allowing for increased flexibility in design and application choices. Furthermore, li-ion batteries also excel with benefits such as extremely low self-discharge rates, a long lifespan of thousands of charge/discharge cycles, and exceptional cycling performance, making them an ideal choice for various applications.

The lead-acid battery holds the second major share of the global market as it has been widely used in vehicles, consumer electronics, and other applications. Lead-acid has a high lifespan from 3 to 5 years all the way to 12+ years, reliant on the manufacturing process.

By State Analysis

Secondary Battery is Dominating the Market Due to its Ability to Recharge and Use Multiple Times

Based on state, the market is segmented into primary and secondary.

The secondary battery is dominating the market share due to its primary advantage: the ability to be recharged and used multiple times. This makes them a more sustainable and cost-effective option compared to primary batteries, which are typically single-use and disposable. It offers users a variety of options to suit their specific needs, contributing to their dominance in various applications.

The primary segment is the second dominating market due to its widespread use and convenience. Primary batteries are designed to be used once and then discarded. They are generally cheaper than rechargeable batteries, making them an attractive option for many consumers.

By Application Analysis

Automotive Segment Dominates owing to Growing Demand for Lithium-ion Batteries in Automotive and Consumer Electronics Application

Based on application, the market is segmented into automotive, consumer electronics, energy storage system, industrial, railway, and others. The automotive segment is dominating the market due to several factors, including the increasing adoption of EVs, advancements in technology, and regulatory initiatives aimed at reducing carbon emissions. Government policies play a crucial role in this expansion as many countries are implementing stricter emissions regulations and promoting the adoption of EVs through incentives and subsidies. For instance, initiatives in India and Mexico aim to increase the share of electric vehicles in their automotive fleets significantly by 2030. These measures encourage consumer adoption and stimulate investments in production and technology development.

The demand for consumer electronics batteries is expected to grow rapidly, driven by the increasing sales of smartphones, laptops, and other portable devices. The energy density and longevity of lithium-ion batteries make them particularly suitable for these applications, further enhancing their market appeal.

REGIONAL INSIGHTS

The market has been studied geographically across five main regions: North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

Globally, Asia Pacific is dominating the market and accounts for the majority of production and consumption. The region leads in Electric Vehicles (EVs) sales, fueled by the rising population adopting EVs in China, India, and Japan. Asia Pacific’s consumer electronics sector is also a significant contributor to the demand for lithium-ion batteries. The market for consumer electronics batteries is expected to grow rapidly, driven by the increasing sales of smartphones, laptops, and other portable devices in China and South Korea. The energy density and longevity of lithium-ion batteries make them particularly suitable for these applications.

Europe is the second-leading region in the market, witnessing rapid economic growth and urbanization, driving significant energy demand. This demand, coupled with increasing environmental concerns and commitments to reduce carbon emissions, has urged investments in energy technologies. Regulatory measures and government investment in research and development, and infrastructure projects further support the lead acid battery market growth. For instance, Germany's National Innovation Program for Hydrogen and Fuel Cell Technology (NIP) provides funding for R&D projects aimed at developing innovative technologies, including batteries for hydrogen fuel cell vehicles and renewable energy systems.

North America has established a strong market for batteries. The US Department of Energy is injecting USD 2.8 billion into companies that make raw materials for batteries. The agency’s goal is to advance a mix of established and start-up firms from the demonstration stage toward large-scale commercial production. Carmakers plan to spend over USD 40 billion on factories in the U.S., according to a report from the Federal Reserve Bank of Dallas. However, companies have only recently started to build plants for the materials needed to make those batteries.

KEY INDUSTRY PLAYERS

Market Leaders are Collaborating to develop Advance Storage Technology

The global market is highly fragmented, with key players and some medium-scale regional players delivering a wide range of power technology at local and country levels across the value chain. Numerous companies are actively operating across different countries to cater to the specific customer demands.

With a highly fragmented structure, the global market consists of a prominent players alongside medium-scale regional industry participants. These players offers a wide array of power technology at country and local levels throughout the value chain to meet specific needs of customers.

In January 2024, Clarios and Altris entered into a collaboration agreement to accelerate the advancement of sustainable sodium-ion batteries technology. The partnership aims to create low-voltage sodium-ion batteries for the automotive industry, paving the way for automakers to explore innovative multi-batteries solutions that integrate lithium-ion, Absorbent Glass Mat (AGM) lead-acid batteries, and other chemistries in vehicles. Meanwhile, lead-acid batteries have emerged as a prime example of a successful circular economy approach in the industry.

List of Top Battery Companies:

• CATL (China)


• LG Energy Solution (South Korea)


• Panasonic (Japan)


• BYD (China)


• Samsung SDI (South Korea)


• SK Innovation (South Korea)


• Gotion (China)


• EVE Energy Co. LTD (China)


• Sunwoda Electronics (China)


• Exide Industries Ltd (India)

KEY INDUSTRY DEVELOPMENTS:

• July 2024: CATL, a leading batteries manufacturer, launched its new EV batteries brand for commercial applications, CATL TIANXING. The brand debuts with two products designed for light commercial vehicles: CATL TIANXING-L Superfast Charging Edition and CATL TIANXING-L Long Range Edition. These products boast impressive capabilities, including 4C superfast charging and a maximum range of 500 kilometers, respectively, making them suitable for demanding commercial applications.


• July 2024: LG Energy Solutions (LGES) and Hyundai Motor Group officially launched Indonesia's first battery cell production facility for electric vehicles, with an annual capacity of 10 GWh. This investment is part of a broader commitment by Hyundai Motor and LGES to spend up to USD 9.8 billion in Southeast Asia's largest economy, Indonesia, to develop an electric vehicle supply chain. The Indonesian government believes that this investment would enable the country to leverage its abundant resources of nickel and copper while also benefiting from the growing demand for electric vehicles.


• April 2024: CATL launched Shenxing PLUS, the world's first lithium iron phosphate lfp batteries capable of delivering a range exceeding 1,000 kilometers on a single charge while also supporting 4C superfast charging. LFP batteries, a more environmentally friendly alternative to traditional lithium-ion batteries used in many electric vehicles, offer a sustainable solution for the industry.


• March 2024: Panasonic Energy Co Ltd reached a binding agreement with Indian Oil Corporation Ltd (IOCL) to create a joint venture in India with the goal of establishing a partnership to produce cylindrical lithium-ion batteries.


• September 2023: Gotion announced an investment of USD 2 billion in its first North American factory, located in Manteno, Illinois. This major facility, set to become the largest EV batteries production investment in the state, will be established in an existing Kmart distribution center. The plant would produce 40 GWh of lithium-ion battery cells and 10 GWh of battery packs, focusing on energy storage system integration and supporting Illinois' climate change initiatives.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product process, and leading source of the battery. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

Report Scope & Segmentation