Over the past decade, lithium batteries have gained popularity due to their superior performance in household and industrial applications. The high energy density and excellent electrical energy storage capabilities of these batteries are the main factors in their success. The high energy density of lithium batteries means that they can store more energy in a smaller volume and with less material consumption, which makes them a popular choice for small, wearable and portable products.
Major players in the global lithium battery market
The lithium battery industry market value is about $54.4 billion in 2023. As the demand for lithium batteries increases, experts predict that the market will grow steadily at a compound annual growth rate of about 20.3% from 2024 to 2030. The automotive industry is the main customer of lithium batteries and has the greatest development potential. Thanks to the improvement of lithium battery performance and the reduction of cost, the registration of electric vehicles (EVs) around the world is expected to grow exponentially.
The United States leads the market in this market, with increasing sales of electric vehicles driven by favorable regulations and a large number of private operators. By 2030, it is expected that 64% of light vehicles in the United States will be powered by lithium batteries. Among the major lithium battery manufacturing companies, Albemarle Corporation (ALB) generates the highest profits and has a market capitalization of $18.1 billion. Other major players, such as South Korea's LG Energy Solutions, Japanese industrial giant Toshiba Corporation, and Arcadium Lithium PLC, are global leaders in lithium battery development.
China's position in the global lithium battery market
Meanwhile, Chinese battery manufacturers occupy a pivotal position in the global lithium battery market. With more than a decade of head start, China not only leads the world in operating and planned battery production capacity, but is also the world's largest electric vehicle market. Although the end of state subsidies and economic pressures in early 2023 have temporarily curbed electric vehicle production, battery manufacturers remain confident in the long-term development of the market, announcing 247 gigawatt-hours (GWh) of new battery capacity in the first quarter of 2023 alone.
EVE Energy is expected to take on nearly half of this new capacity, and is expected to become China's second-largest battery manufacturer after CATL in 2030, with capacity increasing by nearly 500% from 2023. The positions of major players such as BYD, CALB Group and SVOLT Energy Technology will remain unchanged during the forecast period. In addition, companies such as Sunwoda Electronic, Chuneng New Energy and Funing Technology will each have a total battery production of more than 100GWh in China by 2030. Rapid changes in China's battery manufacturing industry mean that new leading companies may emerge in 2030.
Advances in lithium battery technology and new lithium batteries
Advances in lithium battery technology have led to more efficient and powerful products. New lithium batteries are emerging every month, and lithium iron phosphate (LFP) batteries currently dominate the market. China is the leading manufacturer of LFP batteries, producing 95% of the LFP batteries installed in almost all light-duty vehicles (LDVs). At the same time, the supply chain for sodium-ion batteries without lithium is also being established, with more than 100 gigawatt-hours (GWh) of manufacturing capacity mainly operating or announced in China. With its dominant position in LFP battery chemistry, China's Contemporary Amperex Technology Co., Ltd. (CATL) produces most of the truck batteries. The durability and lower cost of LFP batteries make them a preferred alternative to traditional lithium-ion batteries.
Solid-state lithium batteries (ASSLBs) are also becoming increasingly popular due to their higher safety. Most manufacturers use sulfide electrolytes with high ionic conductivity to achieve efficient operating capabilities. However, the significant electronic conductivity of sulfide electrolytes (around 10^-8 S cm^-1) promotes the direct deposition of lithium dendrites in electrolyte particles, leading to severe self-discharge issues.
Researchers recently introduced a grain boundary electronic insulation (GBEI) strategy to prevent electrons from transporting through grain boundaries (GBs). This approach enables Li-Li symmetric cells to exhibit a cycle life 30 times longer than that of pristine sulfide electrolytes and reduces the self-discharge rate of full cells to one-third of the original. Li-LiCoO2 ASSBs retain a high capacity of 80% after 650 cycles and maintain stable cycling performance for more than 2,600 cycles at a current density of 0.5 mA cm-2.
Future innovations are expected to shape the future of lithium batteries, with the integration of new materials playing a vital role in increasing energy density and reducing raw material costs, thereby reducing the cost of cells and battery packs. Among them, new electrolyte chemistries are the most important. These formulations are essential for the development of negative and positive active materials for next-generation lithium batteries.
In the field of battery chemistry, lithium nickel manganese cobalt (NMC) battery chemistry has become the market leader due to its superior energy capacity, especially in terms of driving range, making it more attractive compared to lower-cost and safer lithium iron phosphate (LFP) batteries. Although energy density is a key factor in battery selection, the use of LFP technology in China is free of patent fees until 2022, which also affects the market acceptance of LFP technology.
NMC batteries will have a global market share of just over half in 2023, and a market share of nearly 70% in Europe, and is expected to increase to 77.2% by 2030. In contrast, LFP batteries will only have a market share of 5.2% in Europe in 2023 and are expected to further decline to 0.5% by the end of the forecast period. In the US market, LFP batteries are expected to have a market share of 20% by 2030, while NMC batteries will account for 50.2% and NMC-aluminum variants will account for 15.3%.
Despite Europe and the United States' limited reserves of critical mineral resources, the growth of NMC battery market share is still significant. The mining of cobalt and nickel resources used in NMC batteries is highly concentrated in the Democratic Republic of Congo and Indonesia. Currently, most of the materials are processed into battery-grade compounds and battery positive electrodes in China. Although the United States and the European Union have enacted relevant bills to ensure the security of supply and recycling of strategic minerals, it will be a long process to establish a complete supply chain from mines to recycling facilities.
