Battery Market by Battery Type (Lithium-ion Batteries, Lead-acid Batteries, and Others), Application (Automotive & Transportation, Consumer Electronics, Energy & Power, Telecom, and Others), and Region (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2022–2031

Global Battery Market Analysis

The Global Battery Market Size was $98.0 billion in 2021 and is predicted to grow with a CAGR of 12.1%, by generating a revenue of $298.1 billion by 2031.

Global Battery Market Synopsis

The battery market is projected to expand due to the rising demand for transportation. With the rise in demand for environmentally friendly means of transportation, the use of batteries in electric vehicles is expected to rise at a rapid pace. Another major factor positively affecting the market is the growing demand for batteries due to the increased use of electronic appliances. In addition, to lessen reliance on fuel and lessen the negative effects of air pollution, governing bodies in various nations are promoting the use of electronic vehicles (EVs) powered by Li-ion batteries. To enhance air quality and reduce vehicle carbon emissions, EVs are also being added to public transportation systems.

However, one of the major disadvantages of batteries is their high cost, particularly for electric vehicles and stationary energy storage systems. This can limit their adoption in some markets, especially in those with lower incomes or where the cost of electricity is already low. The cost of batteries can be reduced through economies of scale, but this requires significant demand for batteries. As demand for batteries continues to grow, it is likely that the cost of batteries will continue to decline.

Advancements in battery technology are another key driver of the battery market. Battery technology is continually evolving and improving, resulting in batteries that are more efficient, longer lasting, and more cost-effective. There are ongoing efforts to develop new battery chemistries that offer improved performance, safety, and cost-effectiveness. For example, solid-state batteries are a promising new technology that offer higher energy densities and improved safety compared to traditional lithium-ion batteries. Advances in battery technology are enabling batteries to charge more rapidly, reducing the amount of time it takes to charge a battery and improving the convenience of using battery-powered devices.

According to regional analysis, the Asia-Pacific battery market accounted for the highest market share in 2021. The Asia-Pacific region will see rapid growth in the battery industry due to the rise in demand for hybrid and electric vehicles and the enormous sales of motorcycles, passenger cars, and commercial vehicles.

Battery Market Overview

A battery is a device that converts chemical energy into electrical energy through a chemical reaction. Batteries are made up of one or more cells, each containing an anode, a cathode, and an electrolyte. When the battery is connected to an external circuit, a chemical reaction occurs within the cell, generating a flow of electrons between the anode and cathode, which creates an electrical current.

COVID-19 Impact on Global Battery Market

The COVID-19 pandemic has brought about a number of uncertainties that have resulted in significant economic losses as many businesses around the world came to a standstill. Supply chain disruptions, the closure of manufacturing facilities, and a global economic slowdown have ultimately decreased the demand for batteries. Many battery manufacturers and suppliers have had to temporarily shut down or slow down production due to the COVID-19 outbreak among workers or government-imposed restrictions. This has resulted in delays and shortages of key materials and components, such as lithium, cobalt, and nickel. For instance, transport networks, such as those for air and sea freight, which are essential for the import and export of raw materials and finished batteries, have also been disrupted by the pandemic. The logistics of shipping batteries and battery components have been made more difficult by travel restrictions and border closures. The pandemic has also caused price volatility for some battery components, including cobalt and lithium, as a result of supply chain disruptions and a lack of certainty regarding demand. Many battery manufacturers and suppliers have faced labor shortages due to worker illnesses, quarantine requirements, and social distancing measures. This has led to delays in production and reduced output.

Growing Demand for Electric Vehicles in Automotive Sector to Drive the Market Growth

Growing demand for electric vehicles is the primary factor propelling the battery market. (EVs). EVs are powered by batteries. Thus, as the EV market grows, so does the market for batteries. To attract consumers to buy EVs, numerous governments are providing incentives like tax credits, rebates, and subsidies. These regulations aim to lower carbon emissions and encourage the use of clean energy technologies. The performance and range of EVs are improving due to advancements in battery technology, increasing their consumer appeal. For instance, EVs can now travel farther on a single charge with the development of lithium-ion batteries.

To know more about global battery market drivers, get in touch with our analysts here.

Limited Availability of Raw Material for Battery Manufacturing to Restrain the Market Growth

The limited availability of raw materials such as lithium, cobalt, and nickel are a major challenge for the battery market. These materials are crucial for the production of batteries, and their availability is limited. As the demand for batteries increases, the supply of these raw materials may not be able to keep up, leading to supply chain disruptions and increased costs of production. Furthermore, the production of these raw materials can have negative environmental impacts, such as water and air pollution. This has led to increased scrutiny on the sourcing of these materials. Moreover, the battery market is subject to several stringent regulations, which impact both production costs and market access.

Increasing Demand for Portable Devices and Wearables to Offer Excellent Opportunities for the Battery Market

The consumer electronics industry offers lucrative opportunities to battery market players. There is an increasing need for batteries due to the widespread use of smartphones, tablets, laptops, and other devices across the globe. The demand for wearable devices such as fitness trackers, smartwatches, and medical devices is also increasing worldwide, which presents new opportunities for battery manufacturers. As the market for consumer electronics continues to grow, battery manufacturers are anticipated to continue investing in advanced technologies and expanding their production capacity to meet demand.

To know more about global battery market opportunities, get in touch with our analysts here.

Global Battery Market, by Battery Type

Based on battery type, the market has been divided into lithium-ion batteries, lead-acid batteries, and others. Among these, the lithium-ion batteries sub-segment accounted for the highest market share in 2021 and is estimated to show the fastest growth during the forecast period.

Global Battery Market Size, by Battery Type, 2021

Source: Research Dive Analysis

The lithium-ion batteries segment accounted a dominant market share in 2021. The lithium-ion batteries segment of the battery market has experienced significant growth in recent years, driven by the increasing demand for electric vehicles and renewable energy storage systems. Lithium-ion batteries are a type of rechargeable batteries that use lithium ions to store and release energy and are known for their high energy density, long cycle life, and low self-discharge rate. The consumer electronics industry has a significant impact on the battery market, with lithium-ion batteries being the most commonly used type of battery in these devices. They are used in a wide range of consumer electronics, from smartphones and laptops to wearable devices like smartwatches and fitness trackers.

Global Battery Market, by Application

Based on application, the market has been divided into automotive & transportation consumer electronics, energy & power, telecom, and others. Among these, the automotive & transportation sub-segment accounted for highest revenue share in 2021.

Global Battery Market Share, by Application, 2021

Source: Research Dive Analysis

The automotive & transportation sub-segment accounted a dominant market share in 2021. The automotive segment of the battery market refers to the use of batteries in vehicles, including traditional internal combustion engine (ICE) vehicles, hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and battery electric vehicles (BEVs). The automotive segment is one of the largest and fastest-growing segments of the battery market, driven by factors such as the increasing demand for electric vehicles and government incentives to promote the adoption of cleaner and more efficient vehicles. BYD Company Ltd., LG Energy Solution, and CATL are among the leading companies in the automotive battery market. With increasing investment in R&D to enhance battery performance, lower costs, and increase EV range, it is anticipated that the automotive segment of the battery market will continue to grow along with the demand for EVs.

Global Battery Market, Regional Insights

The battery market was investigated across North America, Europe, Asia-Pacific, and LAMEA.

Global Battery Market Size & Forecast, by Region, 2021-2031 (USD Billion)

Source: Research Dive Analysis

The Market for Battery in Asia-Pacific to be the Most Dominant

The Asia-Pacific battery market had a dominant market share in 2021. The Asia-Pacific battery market is being propelled by factors like growing urbanization, rising demand for renewable energy, and government initiatives to encourage the use of electric vehicles. The Asia-Pacific region is the largest market for electric vehicles, with China being the world's largest market for EVs. As governments in the region continue to promote the adoption of cleaner and more efficient vehicles, the demand for batteries is expected to grow significantly in the coming years. The Asia-Pacific region is home to some of the world's largest and fastest-growing renewable energy markets, including China, India, and Japan. As these countries continue to invest in renewable energy infrastructure, the demand for energy storage solutions, including batteries, is expected to increase. Governments in the Asia-Pacific region have implemented a range of initiatives to promote the adoption of renewable energy and electric vehicles, including tax incentives, subsidies, and regulations. These initiatives are expected to continue to drive the growth of the battery market in the region. As more people move into cities in the Asia-Pacific region, the demand for energy storage solutions, including batteries, is expected to increase. This is because urbanization leads to increased energy demand and the need for reliable and efficient energy storage solutions.

Competitive Scenario in the Global Battery Market

Investment and agreement are common strategies followed by major market players. For instance, in December 2020, LG Chem Ltd., which makes batteries for Tesla Inc. electric vehicles, had previously announced plans to double its production capacity at its Chinese manufacturing facility.

Source: Research Dive Analysis

Some of the leading battery market players are Contemporary Amperex Technology Co., Limited, LG Energy Solution, Advanced Power Solutions n.v., BYD Company Ltd., SAMSUNG SDI CO.,LTD., CALB, Shenzhen Grepow Battery Co., Ltd., ENVISION AESC GROUP LTD, EXIDE INDUSTRIES LIMITED, and Amara Raja Group.