Battery Materials Market By Battery Type (Lead-Acid, Lithium-Ion), By Material (Anode, Cathode), By Application (Automotive, EVs, Industrial), And Region for 2024-2031

Battery Materials Market Valuation – 2024-2031

The rising demand for energy storage solutions across a wide range of industries. As electric vehicles, renewable energy systems, and portable devices become more common, the need for high-performance minerals such as lithium, cobalt, nickel, and graphite grows rapidly. According to the analyst from Verified Market Research, the Battery Materials Market is estimated to valuation of USD 66.22 Billion in 2023 to reach a valuation of USD 118.48 Billion valued in 2031.

The market is shaped by battery chemistry innovation, which aims to improve efficiency, safety, and sustainability. As manufacturers focus on lowering costs and improving energy density, the Battery Materials Market continues to grow, playing an important role in the global energy revolution. It enables the market to grow at a CAGR of 8.32% from 2024 to 2031.

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Battery Materials Market: Definition/ Overview

Battery materials, such as cathodes, anodes, electrolytes, and separators, are essential elements used to manufacture batteries. These materials allow for energy storage and release by promoting electrochemical reactions within the battery, making them critical to its performance, capacity, and longevity.

Battery materials vary based on the type of battery. For example, lithium-ion batteries employ lithium, cobalt, nickel, and graphite, whereas lead-acid batteries use lead and sulfuric acid. Advanced batteries, such as solid-state batteries, are looking into new materials to improve safety, energy density, and efficiency.

With the rise of electric vehicles, renewable energy storage, and portable devices, the demand for high-performance battery materials has increased. Battery chemistry and material sourcing innovations are vital to enhancing energy storage technologies, lowering prices, and satisfying sustainability goals, hence battery materials are an important emphasis in the changing energy landscape.

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How do the Expansion of Electric Vehicles and the Adoption of Unprecedented Demand for Battery Materials Foster the Growth of the Battery Materials Market?

The rapid expansion of electric vehicle (EV) production and adoption is creating unprecedented demand for battery materials. As governments worldwide implement stricter emissions regulations and offer incentives for EV purchases, automakers are ramping up their electric vehicle offerings. According to the International Energy Agency (IEA), global electric car sales reached 6.6 million in 2021, more than doubling from 2020. This surge in EV production directly translates to increased demand for battery materials such as lithium, cobalt, nickel, and graphite. The IEA projects that demand for these materials could increase by up to 30 times by 2040.

The growing renewable energy sector and the need for energy storage solutions are boosting the Battery Materials Market. As countries strive to reduce their carbon footprint and increase their reliance on intermittent renewable energy sources like solar and wind, large-scale energy storage systems become crucial for grid stability. The U.S. Energy Information Administration reports that battery storage capacity in the United States grew by 35% in 2020 alone. This trend is global, with Bloomberg NEF forecasting that the global energy storage market will grow to a cumulative 1,028 gigawatts by 2030, a 15-fold increase from 2020 levels. This explosive growth in energy storage applications is driving significant demand for advanced battery materials.

How do Battery Material Shortages Affect the Growth and Adoption of Electric Vehicles and Renewable Energy Storage Systems?

The shortages lead to increased production costs and potentially higher prices for end consumers. The scarcity of critical materials like lithium, cobalt, and nickel drives up their prices, directly affecting battery costs. Lithium prices surged by over 400% in 2021. This cost inflation can slow down EV adoption rates as higher vehicle prices may deter potential buyers. Similarly, expensive energy storage systems can delay the implementation of large-scale renewable energy projects, potentially slowing the transition to cleaner energy sources.

Material shortages can cause production delays and supply chain disruptions, limiting the manufacturing capacity of EVs and energy storage systems. This supply constraint can create longer wait times for customers and hinder market growth. The lithium supply gap is expected to reach 605,000 metric tons by 2030, equivalent to 2.8 million EVs. Such shortages can force manufacturers to reduce production targets or postpone the launch of new models. In the renewable energy sector, battery shortages can delay the deployment of grid-scale storage projects, potentially impacting the stability and reliability of renewable energy integration into power grids. These supply constraints pose significant challenges to meeting the ambitious global targets for EV adoption and renewable energy implementation.

Category-Wise Acumens

How the High Investment in Lithium-ion Battery Foster the Growth of Lithium-ions Segment?

Lithium-ion batteries segment dominates in the Battery Materials Market owing to the automotive industry’s massive investment in lithium-ion technology has driven rapid advancements in battery performance and cost reduction. As major automakers committed to electrification, they poured billions into research and development, leading to substantial improvements in energy density, charging speed, and longevity of lithium-ion batteries. For instance, Bloomberg New Energy Finance reports that the average price of lithium-ion battery packs fell from $1,160 per kilowatt-hour in 2010 to $132 per kilowatt-hour in 2021, a staggering 89% decrease. This dramatic cost reduction has made EVs more affordable and competitive with traditional internal combustion engine vehicles, further accelerating their adoption and, consequently, the demand for lithium-ion batteries.

The scale of EV production has created a self-reinforcing cycle that cements lithium-ion’s market dominance. As EV sales surge – with global sales reaching 6.6 million units in 2021 according to the International Energy Agency – manufacturers benefit from economies of scale, further driving down costs and improving production efficiency. This scale also incentivizes the development of a robust supply chain and infrastructure around lithium-ion technology, including mining operations, cell manufacturing facilities, and recycling plants. The resulting ecosystem makes it increasingly challenging for alternative battery technologies to compete, as they lack the established infrastructure and scale advantages. This entrenchment of lithium-ion technology in the EV sector has spillover effects into other markets, such as consumer electronics and grid storage, further solidifying its dominant position in the overall battery market.

How the Increasing Adoption of Electric Vehicles Globally Surge the Growth of Automotive Segment?

The automotive segment is a dominant in the battery material market, driven by the rapid growth of electric vehicles (EVs) worldwide. The increasing global demand for electric vehicles is a key factor contributing to the expansion of this segment, as EVs rely heavily on advanced battery technologies. This surge in EV adoption is fueled by growing concerns over rising pollution levels and the urgent need to address climate change. Governments across the globe are responding to these environmental challenges by implementing stricter emissions regulations and promoting cleaner, more sustainable transportation solutions.

In particular, governments are introducing reforms and incentives aimed at boosting the adoption of electric vehicles, which is expected to have a significant and positive impact on the battery material market. Subsidies for EV buyers, tax incentives, and investments in EV infrastructure, such as charging stations, are all contributing to the increasing demand for batteries. As the EV market grows, so does the need for critical battery materials like lithium, cobalt, nickel, and graphite, which are essential for producing high-performance batteries.

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Country/Region-wise Acumens

How the Robust Manufacturing Ecosystem and Extensive Supply Chain Network Surge the Growth of the Battery Materials Market in Asia Pacific?

Asia Pacific substantially dominates the battery material market driven by the region’s robust manufacturing ecosystem and extensive supply chain network providing a significant competitive advantage. China, South Korea, and Japan are home to some of the world’s largest battery manufacturers, including CATL, LG Chem, and Panasonic. These three countries accounted for 87.2% of global EV battery production in 2021, with China alone responsible for 44.1%. This manufacturing prowess extends to the entire battery supply chain, from raw material processing to cell production. China processes 80% of the world’s raw lithium, 77% of cobalt, and 59% of nickel. This vertical integration allows for more efficient production and cost control, reinforcing the region’s market dominance.

Strong government support and strategic policies have been crucial in fostering the battery materials industry in Asia Pacific. Countries like China and South Korea have implemented comprehensive strategies to develop their battery and EV industries. China’s “Made in China 2025” initiative and its New Energy Vehicle (NEV) program have provided substantial subsidies and incentives for battery and EV manufacturers. These policies have resulted in China becoming the world’s largest EV market, with 3.3 million EVs sold in 2021, according to the China Association of Automobile Manufacturers. Similarly, South Korea’s “K-Battery” strategy aims to invest $35 billion in its battery industry by 2030. These government-backed initiatives have not only stimulated domestic demand but also positioned Asia Pacific companies as global leaders in battery technology and production, further cementing the region’s dominance in the Battery Materials Market.

How the Government Initiatives Propel the Growth of the Battery Materials Market in North America?

North America is anticipated to witness the fastest growth in the Battery Materials Market during the forecast period owing to the government policies and incentives in North America are significantly supporting the expansion of its battery materials supply chain through direct financial incentives that are boosting domestic production. The U.S. Inflation Reduction Act of 2022 allocates $369 billion for clean energy initiatives, including substantial tax credits for EV battery manufacturing. Battery cell production is eligible for a $35 per kilowatt-hour credit. These incentives are spurring investments, with companies like GM and LG Energy Solution announcing a $2.6 billion battery plant in Michigan.

Regulations promoting supply chain localization are reshaping the industry landscape. The IRA’s sourcing requirements, mandating that a percentage of battery materials come from North America or free trade agreement countries, are driving rapid supply chain development. This has led to a surge in domestic projects, with over 20 new battery gigafactories planned in North America by 2030. These policies aim to reduce dependence on foreign suppliers and establish a robust domestic battery materials ecosystem.

Competitive Landscape

The competitive landscape of the Battery Materials Market is characterized by rapid technological advancements, increasing demand for sustainable sourcing, and innovation in material efficiency. Companies are focusing on research and development to enhance battery performance and reduce costs while addressing environmental concerns.

Some of the prominent players operating in the Battery Materials Market include:

Asahi Kasei Corporation, POSCO, Umicore, Mitsubishi Chemical Holdings, Hitachi Chemical, Sumitomo Corporation, Toray, Kureha Corporation.

Latest Developments

• In September 2023, Tesla announced a agreement of lithium supply agreement with Piedmont Lithium Tesla secured a five-year supply agreement with Piedmont Lithium for spodumene concentrate from Piedmont’s North American Lithium project. This deal strengthens Tesla’s lithium supply chain and supports its goal of increasing battery production for electric vehicles.
• In August 2023, BASF and Tenova announced a partnership to develop and commercialize technologies for battery recycling. This collaboration aims to improve the recovery of critical metals from spent lithium-ion batteries, supporting the circular economy in the battery industry.

Report Scope

Battery Materials Market, By Category

Battery Type:

• Lead-Acid
• Lithium-Ion

Material:

• Anode
• Cathode
• Electrolyte
• Separator

Application:

• Automotive
• EVs
• Industrial
• Portable Devices

Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Research Methodology of Verified Market Research:

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Reasons to Purchase this Report

• Qualitative and quantitative analysis of the market based on segmentation involving both economic as well as non-economic factors
• Provision of market value (USD Billion) data for each segment and sub-segment
• Indicates the region and segment that is expected to witness the fastest growth as well as to dominate the market
• Analysis by geography highlighting the consumption of the product/service in the region as well as indicating the factors that are affecting the market within each region
• Competitive landscape which incorporates the market ranking of the major players, along with new service/product launches, partnerships, business expansions, and acquisitions in the past five years of companies profiled
• Extensive company profiles comprising of company overview, company insights, product benchmarking, and SWOT analysis for the major market players
• The current as well as the future market outlook of the industry with respect to recent developments which involve growth opportunities and drivers as well as challenges and restraints of both emerging as well as developed regions
• Includes in-depth analysis of the market of various perspectives through Porter’s five forces analysis
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