Battery Market

Data from October 2023

The market introduction of lithium-ion batteries began in the 1990s in portable consumer electronic (3C) applications. Until 2015, these batteries, which are relatively small but are used in large quantities, represent the largest application market. Only after that, the demand for hybrid or all-electric vehicles (xEV) surpass that of 3C applications. Together with the strong growth of e-mobility in recent years, cell demand thus grew very strongly. From 2017, the demand for cells for stationary storage systems (ESS) also increased. These batteries, which are installed both in private households and in larger industrial plants, can, for example, temporarily store the highly fluctuating electricity from renewable energies.

The tool window displays the demand for batteries.

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The total demand for battery cells is increasing and has reached growth rates of between 30 and 40 percent in recent years. While demand for LIBs was still below 30 GWh in 2010, it had already risen to 250 GWh by 2020. Due to the currently continuing rapid growth of the e-mobility industry, cell demand increased further to over 700 GWh by 2022. Until 2030, cell demand may exceed 3.5 TWh per year. In 2022, over 70% of battery cells were installed in the mobility sector (vehicles have a much larger battery installed compared to 3C applications).

With increasing demand and thus emerging scales of production, the average cell costs became more and more favorable. Whereas before 2015 these were still over 300 USD/kWh, by 2021 costs had fallen to around 130 USD/kWh. Raw materials now make up the largest share of cell costs. Due to the different cell chemistries that can be used (see tool window »Materials«), the costs of the individual batteries differ depending on the mechanical and chemical structure, but also on the field of application. As a result of the strong dependence on battery and raw material costs, the cost reduction will be significantly lower in the next few years. By 2030, however, the value may fall below 90 USD/kWh. In 2022, the market volume of batteries produced was approximately USD 100 billion.

xEV

The market launch of the Toyota Prius in 1997 can be seen as the basis of modern electromobility. The model was the first mass-produced vehicle powered by a hybrid engine concept. In addition to hybrid vehicles, there are so-called plug-in hybrids with a larger battery that can be charged at the socket. There are also fully electric vehicles. Fuel cell vehicles are not yet available in large numbers. All these vehicle types have batteries of different sizes. Until 2010 there were about 50 electrified passenger car models. Today there are about 800 models on the market.

In addition to passenger cars, commercial vehicles represent another possible application in road transport. In 2015 and 2016, these actually generated greater battery demand than the passenger car sector. This was primarily due to the e-buses introduced in China. In the coming years, the electrification of trucks will also play a greater role.

By 2030, batteries in xEV applications can generate over 80 percent of total battery demand. By 2030, cell demand in the mobility sector alone could reach 2.8 TWh. The size of the average in-stalled battery has been constantly increasing over the last few years. In the past, a lot of LMO was used as cathode material, but today mainly NMC and NCA are used, with an increasing share of LFP cathode material as well. The selection is based on the sector's differentiated requirements depending on the application (see tool window »Materials«). While a long range and thus high energy density are relevant for some passenger cars, other vehicles are designed for a lower overall price. Batteries for commercial vehicles are also designed to be very cost-oriented. In addition, there is often a higher requirement for service life here.

3C

Depending on the definition, consumer electronics include various consumer electronics (smart phones, notebooks, tablets, etc.), but also partly power tools (cordless screwdrivers, garden tools, etc.). Applications have been established globally in this category for quite some time. Growth is less strong compared to the mobility sector. Nevertheless, demand is rising steadily. While approx. 20 GWh of battery cells (with a market share of over 90 percent) were required for 3C applications in 2010, this will rise to 60 GWh by 2020. This value will increase to approx. 120 GWh by 2030 (but only under 5 percent market share).

At the beginning, batteries with LCO chemistry were mainly used. In the meantime, NCM is mainly used as cathode material. Prices play a subordinate role. The most important KPI is energy density.

ESS

With the expansion of renewable energies, the intermediate storage of energy is becoming increasingly important. The ESS can be used for a variety of purposes. On the one hand, stationary storage systems can be used to cushion peak loads, and on the other hand, they can release stored solar energy when it gets dark (both in private households and on an industrial scale). Another application is to enable a basic or stable energy supply in the event of poor grid expansion.

The most important factor for stationary storage is a favorable price. Long service lives and high safety requirements are also relevant for the design. For this reason, lithium iron phosphate cells are primarily used.