The global EV battery market size was valued at $56.4 billion in 2022 and is projected to reach $134.6 billion by 2027, growing at a CAGR of 19.9% from 2022 to 2027.
The growth of the EV battery market can be attributed to the increasing demand of electric vehicles, improvement in battery technology, supporting government policies and regulations, and launch of new plug-in EV models.
The lithium-ion battery segment is expected to be the during the forecast period
The lithium-ion battery dominates the EV battery market due to its high energy density, fast recharging capability, and high discharge power. As a result, lithium-ion batteries are the only available technology that is capable of fulfilling OEM requirements for developing electric vehicles with adequate drive range and fast charging. The cost of lithium-ion batteries is also a major factor driving its high demand since the decreasing cost of these battery types reached USD 130-140 /kWh in 2021 from around USD 800-900/kWh in the past years (Source: Multidisciplinary Digital Publishing Institute). Battery manufacturers are focusing on lithium-ion batteries and have invested in greenfield as well as capacity expansion projects to ramp-up production. For instance, CATL (China) plans to expand its production in Europe. the company plans to expand the production capacity of its Erfurt manufacturing site to 14GWh by the end of 2022 and 60GWh in 2026.
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The 50-110 kWh segment in battery capacity will be leading the EV battery market during the forecast period
The 50-110 KWh segment of the market is estimated to be the largest. Most of the batteries used in electric vehicles operate at a range from 50-110 kilowatt-hours (kWh). Generally, the battery capacity usage depends on the development of the EV fleet as well as the required battery capacity per vehicle, which is generally above 50 kWh and 12 kWh for BEVs and PHEVs, respectively. A major advantage of the 50-110 kWh battery is the fast charging at a low price and high energy efficiency. As a result, major players of the EV market have deployed 50-110 kWh of battery capacity to stay in the competition. For example, Tesla Model S, Tesla Model X, Tesla Model 3, and Chevrolet’s Bolt EV have their battery capacity range between 50-110 kWh.
Europe is expected to be the second largest market during the forecast
The governments of the European region are providing significant incentives to promote electric vehicles. As a result, the demand for electric vehicles has increased significantly. The region is home to manufacturers such as Renault, Audi, BMW, Mercedes, and others. Europe has set a very ambitious goal of reducing 80% CO2 emissions by 2030-2035 and has created a roadmap for the same. The governments of various countries in Europe are subsidizing electric vehicle infrastructure, and the focus is expected to continue to be on electric vehicles in the long run. In 2021, Europe witnessed high growth in the market with over 2.27 million EV sales, with a year-on-year growth of approximately 66% over 2020. In addition, the use of electric vans in the logistics sector of Europe is expected to bring opportunity for the EV battery industry. Many leading logistics companies in Europe have started using electric vans for shipping and delivery purposes. For example, DHL, one of the leading logistics companies in the world, is using electric vans in some parts of the European region.
Key Market Players:
The EV battery companies are CATL (China), Panasonic Holdings Corporation (Japan), LG Chem (South Korea), BYD (China), and Samsung SDI (South Korea).
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