2022-26 Global demand for lithium-ion batteries for electric vehicles increased by 27.48% compound annual

The trend of global energy transition and favorable government policies have significantly driven the growth
in demand for electric vehicles.
According to a report released by Technavio, an international market research institution, it is expected that from 2022 to 2026, the market share of lithium-ion batteries for electric vehicles will increase by $38.
96 billion, with a compound annual growth rate of 27.
48%.

Drivers

One of the key factors driving the growth of the automotive lithium-ion battery market is favorable government policies
.
Governments are working with automakers to address growing concerns
related to environmental safety and clean energy mix.
For example, several countries, such as France and the United Kingdom, have announced that they will ban the sale of diesel cars in their countries, which will help drive sales
of electric vehicles.

In addition, the government is providing incentives and tax credits to promote the use of electric vehicles, which will increase the demand
for automotive lithium-ion batteries.
Changing climate and atmospheric conditions due to rapid urbanization and population growth have prompted the European Commission (EC) to implement stringent fuel efficiency and emissions standards to address these issues
.
This has encouraged European governments and public operators to switch to electric vehicles
.
The rising adoption of electric vehicles will lead to an increase
in the use of lithium-ion batteries in automobiles.

The increase in global automotive lithium-ion battery production capacity is another factor
supporting the growth of automotive lithium-ion battery market share.
Global EV registrations increased by 41%
in 2020 compared to 2019.
Automotive battery production is dominated by China and other countries, accounting for 70% of the global automotive battery production capacity
.

In addition, the price of car batteries has decreased
in recent years.
Automotive battery manufacturers are increasingly focusing on offering batteries at lower prices to increase purchases
.
These manufacturers are increasing their production capacity
for automotive batteries by building new manufacturing facilities.
Automotive lithium-ion battery manufacturers are partnering with leading automakers to increase lithium-ion battery production capacity
.
Such automotive lithium-ion battery capacity expansion plans by market manufacturers will have a favorable impact
on the growth of the global automotive lithium-ion battery market.

Limiting factors

However, on the other hand, the development of high energy density batteries such as lithium-sulfur batteries will be a major challenge
for the automotive lithium-ion battery market during the forecast period.
With the rapid growth of the global population, the global demand for clean energy has increased
significantly.
Due to limited capacity and energy density, traditional automotive lithium-ion batteries have a limited
role to play in meeting these needs.

Other energy storage systems such as lithium-sulfur (Li-S) batteries offer higher energy density
than lithium-ion batteries.
Compared to the cathode materials used in lithium-ion batteries, sulfur has a higher theoretical capacity
.
However, the commercialization of lithium-sulfur batteries has developed slowly
.
They are not widely used in electric vehicles
.
The limitations of lithium-ion batteries in the field of energy storage have prompted researchers to investigate possible uses of lithium-sulfur batteries in electric vehicles, as they can theoretically maintain six times the charging capacity
of lithium-ion batteries.
Another advantage of Li-S batteries is that they are cost-effective compared to lithium-ion batteries because sulfur is a more abundant material
than cobalt.

Asia pacific

Over the forecast period, 45% of the market growth will come from Asia Pacific
.
China and Japan are the major markets
for automotive lithium-ion batteries in the Asia-Pacific region.
The market growth in this region will be faster than that in other regions
.
The huge demand for electric vehicles, along with the boom in manufacturing and industry in China, will boost the growth of the automotive lithium-ion battery market in Asia Pacific during the forecast period
.

In 2020, the COVID-19 pandemic negatively impacted the regional automotive lithium-ion battery market
.
Governments such as China, Japan, South Korea, and India have implemented COVID-19-related restrictions to curb the spread of
the disease.
In the second half of 2020, government-initiated vaccinations in the region led to a decline
in the number of COVID-19 cases.
This led to the lifting of COVID-19-related restrictions and the resumption of manufacturing operations
for regional automotive lithium-ion battery manufacturers.
In addition, in 2021, the regional automotive industry recovered
from the negative impact of the pandemic as regional sales of electric vehicles increased.

The lithium-ion battery market share growth in the battery electric vehicle (BEV) segment will be significant
during the forecast period.
The demand for BEVs has increased
in recent years due to factors such as technological advancements and government subsidies.
BEVs are increasing their market share globally as they are the most viable way
to clean and efficient transportation systems.
BEVs have less impact on climate than internal combustion engine vehicles, which leads to an increase
in demand for BEVs.
Thus, the growing global demand for BEVs will drive the growth
of this segment during the forecast period.