Electric Vehicle Battery Market Outlook: Forecast 2024-2028

The global Electric Vehicle (EV) Battery Market is poised for significant growth, with a projected increase of USD 65.23 billion at a CAGR of 20.2% from 2023 to 2028. This expansion is fueled by the increasing demand for electric vehicles (EVs), advancements in battery technologies, and a collective push for sustainability and reduced carbon emissions in the automotive industry. As EV technology evolves, the industry is witnessing major strides in battery performance, recycling, and energy efficiency.

For more details about the industry, get the PDF sample report for free

EV Battery Market Segmentation

The EV battery market can be divided into several key segments based on battery type, vehicle type, and geography.

By Type:

1. Lithium-ion Batteries: The lithium-ion battery segment dominates the EV battery market, driven by high demand from the EV sector. These batteries offer superior current density, longer shelf life, and reduced costs due to mass production. With advancements in battery chemistry, such as Lithium Nickel Cobalt Alumina (NCA) and Lithium Iron Phosphate (LFP), lithium-ion batteries are expected to continue their upward growth. This segment was valued at USD 21.63 billion in 2018 and is set for rapid expansion during the forecast period.

2. Lead-acid Batteries: Although less prominent, lead-acid batteries are still used in specific vehicle types and continue to find applications, particularly in smaller electric vehicles.

3. Others: Emerging battery technologies like solid-state batteries are also becoming key players, promising improved energy density, charging times, and durability.

By Vehicle Type:

1. Battery Electric Vehicles (BEVs): BEVs represent the largest segment, driving demand for EV batteries as automakers invest in electric-only vehicles.

2. Plug-in Hybrid Electric Vehicles (PHEVs): PHEVs combine both electric and internal combustion engine capabilities, spurring demand for hybrid battery solutions.

3. Hybrid Electric Vehicles (HEVs): HEVs, which utilize both electric power and gasoline engines, are gradually replacing older models and are a key growth driver for the market.

Regional Market Trends:

North America:

• The U.S.
• Canada

Europe:

• U.K.
• Germany
• France
• Rest of Europe

Asia-Pacific (APAC):

• China
• India

South America:

• Chile
• Brazil
• Argentina

Middle East & Africa:

• Saudi Arabia
• South Africa
• Rest of the Middle East & Africa

Market Dynamics & Growth Drivers

The global shift towards electric mobility is the primary factor propelling the EV battery market. With automakers heavily investing in Battery Electric Vehicles (BEVs) and Hybrid Electric Vehicles (HEVs), the demand for high-performance, long-range batteries has skyrocketed. Additionally, government incentives and regulations aimed at reducing carbon emissions continue to foster growth in the EV sector.

Key Drivers:

• Technological Advancements: The continuous improvement of lithium-ion batteries, the development of solid-state batteries, and innovations in Battery Management Systems (BMS) are critical in increasing the efficiency and performance of EV batteries.
• Environmental Policies: As the world shifts towards sustainable energy, governments are introducing policies that promote the use of EVs. These measures include tax incentives, subsidies, and fuel efficiency standards.
• Automaker Investments: Major automakers are ramping up investments in EV battery technology to improve battery lifespan, reduce charging times, and extend vehicle ranges.

Challenges:

• Global Power Crisis: Growing electricity demand due to increased EV adoption, especially in developing countries, presents a significant challenge. Countries like Japan, India, and parts of Europe are grappling with energy supply issues, which could impact the scalability of EV sales.
• High Initial Investments: While advancements are being made, the initial costs of developing and manufacturing EV batteries, especially solid-state batteries, remain high.

Get more details by ordering the complete report

Key Market Players

The EV battery market is highly competitive, with several leading players dominating the landscape. Among the key companies in the industry are:

• A123 Systems LLC
• Ballard Power Systems Inc.
• BYD Co. Ltd.
• CLARIOS LLC
• Crown Battery Manufacturing Co.
• Cummins Inc.
• East Penn Manufacturing Co. Inc.
• EnerSys
• Enertech International Inc.
• Envision Group
• Exide Industries Ltd.
• GS Yuasa International Ltd.
• Hitachi Ltd.
• LG Chem Ltd.
• OptimumNano Energy Co. Ltd.
• Panasonic Holdings Corp.
• Samsung SDI Co. Ltd.
• SK Innovation Co. Ltd.
• Solid Power Inc.
• Tianneng Group
• Zhejiang Narada Power Source Co. Ltd.

Recent Developments in the Market

• January 2025: LG Chem Ltd. announced a partnership with automakers to develop next-generation lithium-ion batteries with improved energy densities. This partnership aims to meet growing EV demand and reduce charging times.
• November 2024: Panasonic Holdings Corporation revealed plans to expand its EV battery manufacturing facilities in North America, positioning itself as a key player in the U.S. electric vehicle market.
• August 2024: A123 Systems LLC launched an innovative 48V lithium-ion battery system designed for use in hybrid electric vehicles (HEVs), a move expected to enhance the fuel efficiency of HEVs.
• July 2024: BYD Co. Ltd., a prominent Chinese EV manufacturer, announced the establishment of a new EV battery production plant in Brazil, signaling its commitment to expanding its global footprint.