The global electric vehicle battery market size is poised to grow by USD 44.24 billion during 2020-2024, progressing at a CAGR of almost 22% throughout the forecast period, according to the latest report by Technavio. The report offers an up-to-date analysis regarding the current market scenario, latest trends and drivers, and the overall market environment. The report also provides the market impact and new opportunities created due to the COVID-19 pandemic.
The advances in EV battery and associated technologies will be one of the major drivers in the global electric vehicle battery market. Several automotive companies are focusing on developing batteries with improved specifications by engaging in collaborative partnerships with other manufacturers. Next-generation batteries are safer compared to lithium-ion batteries, have high charging rates, and low battery leakage risks. Furthermore, several initiatives are being implemented for improving battery quality. For instance, in April 2018, the Indian Space Research Organization (ISRO) announced that it was open to sharing the technology used in its space-grade lithium-ion battery with private players in the automotive industry. As a response to this, ISRO received interest from over 100 companies, of which 14 were selected in December 2018. Such rising initiatives to improve the efficiency of electric vehicles will boost the EV battery market growth during the forecast period.
Decline in EV Lithium-ion Battery cost will be a Key Market Trend
Lithium-ion batteries account for a major portion of the overall cost of EVs and are comparatively costlier than lead-acid batteries or NiMH batteries. However, the manufacturing cost of lithium-ion batteries has been declining significantly. The cost of battery packs has decreased substantially in the past few years as the production scale and manufacturing efficiency have improved. The cost of lithium-ion batteries fell by 78.65% during 2010-2017. This decline is the result of the increased adoption of battery technology by the automotive industry as well as the development of cost-effective production methods by vendors. Since lithium-ion batteries form a major part of the manufacturing cost of EVs, the declining prices are lowering the total cost of ownership of EVs. Moreover, the prices of lithium-ion batteries are expected to decrease further in the coming years as the production capacity continues to rise owing to the strong demand for EVs.