In 2018, the global automotive lithium-ion battery market
reached a value of $24.2 billion and is predicted to attain $74.3 billion in
2024, advancing at a 15.9% CAGR during the forecast period (2019–2024). The
market is growing due to the falling cost of battery and its components and
rising electric vehicle production and demand. A rechargeable battery which
comprises a positive and negative electrode that are contacted by a chemical
called the electrolyte is referred to as lithium-ion battery. Lithium-ion is
allowed to exchange between electrodes because they are separated by a
separator.
In terms of battery type, the automotive lithium-ion battery market is divided into lithium iron phosphate (LFP), lithium nickel
cobalt aluminum oxide (NCA), lithium titanate oxide (LTO), lithium manganese
oxide (LMO), and lithium nickel manganese cobalt (NMC). Among these, the LFP battery type contributed
the largest revenue share to the market during the historical period
(2014–2018), as these batteries are safer than other type of electric vehicles
batteries and have a higher lifespan. The NCA battery type is projected to grow
at the fastest pace during the forecast period.
The rising usage of NMC batteries in electric cars is a key
trend that is being observed in the automotive lithium-ion battery market.
While before a large number of electric vehicle manufacturers made use of LFP
batteries, in the recent years, the usage of NMC batteries has increased
significantly. This shift from LFP to NMC batteries is due to the rising
requirement for higher range in passenger cars from a single charge. In
addition to this, these batteries are lighter than LFP batteries and occupy
lesser space in the vehicle.
When vehicle type is taken into consideration, the automotive
lithium-ion battery market is categorized into commercial vehicle, two-wheeler,
and passenger car. Out of these, the passenger car category accounted for the
largest share of the market in 2018 and is expected to dominate the market
during the forecast period as well, in terms of value. This is because the
governments in major automobile selling countries, including the U.S. and
China, are focusing on producing new energy cars and increasing requirement for
fully electric passenger cars with high-range per charge feature.
The surging electric vehicle demand and production is a key
driving factor of the automotive lithium-ion battery market. As per the
International Energy Agency, the global electric car fleet exceeded 5.1 million
in 2018, rising from 2 million in the previous year. Factors such as the rising
concerns regarding the environment and fluctuating oil prices are driving the
consumers toward alternative to internal combustible engine-powered
automobiles. Furthermore, lithium-ion batteries are being considered the
standard for modern battery electric vehicles at the present time, as they have
excellent specific capacity and energy density.
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Another factor resulting in the growth of the automotive
lithium-ion battery market is the falling cost of battery and its
components. The prices of lithium-ion battery components, including battery
management system, internal wiring, pack housing, internal wing, and pack
housing, are reduced considerably and are further projected to decrease in the
coming years, thereby making lithium-batteries more suitable and affordable. In
addition to this, several automobile companies are investing heavily into pack
assembly, which is further making the battery makers to offer lower prices in
order to increase their sales.
Hence, the market is witnessing growth due to the rising
demand and production of electric vehicles and the falling prices of
lithium-ion battery and its components.
