Electric vehicles (EV) and transportation will represent the largest market for Li-ion. By 2033, battery electric cars will constitute over 90 percent of Li-ion demand, by GWh, by 2030. This will be driven by the increasing adoption of electric vehicles with more stringent emissions targets and goals and as EVs begin to reach cost parity with conventional ICE vehicles.
However, significant market opportunities will still exist in consumer electronics, electronic devices, and stationary energy storage systems. Given the rapid pace of growth, significant investment has been placed on increasing production capacities for Li-ion batteries. While a significant number of announcements and plans are in place for the development of battery supply chains in Europe and North America, China currently dominates. IDTechEx estimate that 70 percent of Li-ion cells were produced in China in 2021, and though this share will shift to Europe and USA over the next five years, China is still expected to hold over 50 percent of manufacturing capacity by 2028. A large domestic market for both electric vehicles and stationary storage, and a strategic outlook on the importance of the battery market, have helped foster this strong position.
Growth in the Li-ion industry has occurred despite considerable headwinds over the past year due to high prices and volatility for some key raw materials. Lithium and nickel, in particular, saw substantial price increases over 2021 and 2022, impacting cell and battery prices.
This has created a driver for the adoption of lower cost battery technologies such as lithium iron phosphate, which has seen a resurgence in China and is gaining popularity in Europe and America among automakers, as well as in the stationary storage sector.
However, a shift to LFP would further consolidate China’s leading position with the vast majority of LFP cathode and batteries produced in China. Options, including high-manganese cathodes, high voltage LNMO, and silicon based anodes, are being explored and commercialised in efforts to not only improve performance but reduce costs and supply chain risks.
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