Electric Vehicle Battery Market by Type (Li-ion, Ni-MH, SLA, Ultracapacitors, Solid-state Batteries), Battery Capacity (<50 kWh, 51-100 kWh, 101-300 kWh, >300 kWh), Bonding Type (Wire, Laser), Battery Form, Application, End User, and Geography - Global Forecast to 2031

The Electric Vehicle Battery Market was valued at $42.2 billion in 2023. This market is expected to reach $415.9 billion by 2031 from an estimated $56.2 billion in 2024, at a CAGR of 33.1% during the forecast period from 2024 to 2031.

Electric Vehicle [EV] Battery Market Size & Forecast

The growth of the electric vehicle (EV) battery market is primarily driven by supportive government policies and regulations for EV batteries, decreasing battery prices, and increasing investment by leading automotive OEMs. Moreover, the rising adoption of electric mobility in emerging economies, growing investments in expanding lithium-ion battery capacity, and the rising deployment of battery-as-a-service are expected to generate growth opportunities for the players operating in this market.

Electric Vehicle Battery Market Growth Drivers

Increasing Investment by Leading Automotive OEMs

Leading automotive OEMs are significantly boosting their investments in EVs in response to stricter emissions regulations and ambitious carbon footprint reduction targets set by governments globally. To meet these regulations, automakers are heavily investing in EV technology. Additionally, advancements in battery technology, including improved energy density and faster charging times, are enhancing the viability and appeal of EVs. Consequently, automakers are increasing their R&D efforts to maintain a competitive edge in this evolving market.

Some of the recent developments in this space are as follows:

• In March 2022, Stellantis N.V. (Netherlands) entered into an agreement with LG Energy Solution Ltd. (South Korea) to invest CAD 5 billion (USD 4.1 billion) in a joint venture aimed at establishing the first large-scale lithium-ion battery production plant in Canada. The joint venture will focus on producing advanced lithium-ion battery cells and modules to fulfill a substantial portion of Stellantis’ vehicle production needs in North America.
• LG Energy Solution Ltd. (South Korea) has announced plans to invest approximately KRW 7.2 trillion (USD 5.5 billion) in constructing a battery manufacturing complex in Queen Creek, Arizona. The complex will include two facilities: one dedicated to cylindrical batteries for EVs and another for lithium iron phosphate (LFP) pouch-type batteries for energy storage systems (ESS).

Such developments are expected to support the EV battery market.

Electric Vehicle Battery Market Growth Opportunities

Growing Investments in Developing Lithium-Ion Battery Capacity

The surge in investments to expand lithium-ion battery capacity for EVs represents a significant opportunity shaping the automotive sector. Lithium-ion batteries offer high energy density, allowing them to store substantial energy in a compact and lightweight package, which is essential for maximizing the driving range of EVs. Their lightweight nature enhances the overall efficiency and performance of EVs. Additionally, these batteries are engineered to endure numerous charge and discharge cycles, contributing to the longevity of EVs. Several companies are also actively investing in the development of advanced lithium-ion battery technologies. For instance, in February 2024, EnerSys (U.S.) chose Greenville, South Carolina, as the site for a lithium-ion cell gigafactory aimed at advancing battery production in the U.S. Additionally, in May 2022, Stellantis N.V. (Netherlands) and Samsung SDI Co., Ltd. (South Korea) announced a USD 2.5 billion investment in a joint venture to establish a lithium-ion battery production plant in the U.S. These advancements are significantly boosting lithium-ion battery capacity and driving increased demand for EV batteries in the market.

Electric Vehicle [EV] Battery Market Analysis: Key Findings

The Lithium-ion Battery Segment to Dominate the Electric Vehicle Battery Market in 2024

Based on type, the EV battery market is segmented into lithium-ion batteries, sealed lead acid batteries, nickel-metal hydride batteries, ultracapacitors, solid-state batteries, and other battery types. In 2024, the lithium-ion battery segment is expected to account for the largest share of over 64.0% of the EV battery market. The segment’s large share is attributed to increasing investments in expanding lithium-ion battery production capacity, rising R&D expenditures, ongoing advancements in battery technology, and supportive government policies and regulations. Additionally, major industry players are forming strategic alliances to bolster market growth. For example, in November 2023, BASF SE (Germany) signed an agreement with SK On (South Korea) to explore collaboration opportunities in the global lithium-ion battery market, focusing on North America and Asia-Pacific. This partnership aims to leverage combined business and product development strengths to create leading battery materials for lithium-ion batteries. Moreover, this segment is anticipated to register the highest CAGR during the forecast period.

The 51kWh to 100kWh Segment to Dominate the Electric Vehicle Battery Market in 2024

Based on battery capacity, the EV battery market is segmented into less than 50kWh, 51kWh to 100kWh, 101kWh to 300kWh, and more than 300kWh. In 2024, the 51kWh to 100kWh segment is expected to account for the largest share of over 52.0% of the EV battery market. The segment’s large share is attributed to rising investments by leading automotive OEMs in developing long-range and more powerful EVs and the growing adoption of 51kWh to 100kWh battery capacities in passenger vehicles.

However, the 101kWh to 300kWh segment is poised to record the highest CAGR during the forecast period. The increasing adoption of high-capacity batteries in electric buses and trucks, coupled with the growing demand for high-speed or high-power charging infrastructure to minimize downtime, is expected to drive the growth of this segment.

The Wire Bonding Segment to Dominate the Electric Vehicle Battery Market in 2024

Based on bonding type, the EV battery market is segmented into wire bonding and laser bonding. In 2024, the wire bonding segment is expected to account for the larger share of over 84.5% of the EV battery market. The segment’s large share is attributed to the increasing demand for wire bonding in battery pack assembly and the rising need for precise and reliable wire bonding technology. Additionally, the advantages provided by wire bonding—such as efficient power transfer, effective thermal management, reliability, cost-effectiveness, and enhanced performance—further contribute to the growth of this segment.

However, the laser bonding segment is expected to register the highest CAGR during the forecast period. The increasing need for laser bonding in battery cell-to-cell connections and the rising need for laser bonding to ensure the quality and reliability of EV components are expected to support the growth of this segment.

The Prismatic Segment to Dominate the Electric Vehicle Battery Market in 2024

Based on battery form, the EV battery market is segmented into prismatic, pouch, and cylindrical. In 2024, the prismatic segment is expected to account for the largest share of over 45.0% of the EV battery market. The segment’s large share is attributed to innovations in prismatic cell design and materials, the increasing demand for advanced prismatic cell technologies, and the growing need for efficient and reliable battery solutions. Additionally, prismatic cells offer superior layering options compared to other cell types, making them particularly well-suited for critical applications such as EV batteries. Moreover, this segment is estimated to record the highest CAGR during the forecast period.

The Electric Cars Segment to Dominate the Electric Vehicle Battery Market in 2024

Based on application, the EV battery market is segmented into electric cars, light commercial vehicles, heavy commercial vehicles, e-scooters & motorcycles, and e-bikes. In 2024, the electric cars segment is expected to account for the largest share of over 46.5% of the EV battery market. The segment’s large share is attributed to the increasing demand for cleaner and more sustainable transportation options, supportive government policies and incentives for electric car adoption, the growing prevalence of electric cars in urban areas, and a growing focus on electric mobility in developing countries.

However, the light commercial vehicles segment is anticipated to register the highest CAGR during the forecast period. The increasing adoption of light commercial vehicles in the corporate sector and growing awareness of the role of EVs in reducing emissions are expected to support the growth of this segment. Additionally, retail MNCs and transport fleet operators are progressively shifting to electric light commercial vehicles due to improved battery capacities, a broader range of appealing new models, reduced fleet emissions, and the expansion of charging station networks.

The Electric Vehicle OEMs Segment to Dominate the Electric Vehicle Battery Market in 2024

Based on end user, the EV battery market is segmented into EV OEM and battery swapping stations. In 2024, the EV OEM segment is expected to account for the larger share of over 85.0% of the EV battery market. The segment’s large share is attributed to the growing global adoption of EVs, increasing collaborations with technology firms and battery manufacturers, and rising investments by automotive OEMs in expanding EV battery manufacturing capabilities.

However, the battery swapping stations segment is projected to register the highest CAGR during the forecast period. This segment's benefits, such as lower initial costs, extended vehicle range, speed and convenience, and enhanced battery life, contribute to its growth.

Geographic Analysis

Asia-Pacific to Dominate the Electric Vehicle Battery Market

Based on geography, the EV battery market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, Asia-Pacific is expected to account for the largest share of over 68.0% of the EV battery market. The presence of leading EV battery players is anticipated to contribute significantly to the high revenue share of this region. Additionally, growing investments in expanding lithium-ion battery capacity, the increasing adoption of electric mobility in emerging economies, and supportive government policies and regulations for EV batteries are driving demand in the region. Furthermore, leading key players are collaborating to support market growth. For example, in April 2024, Hyundai Motor Company (South Korea) and Kia Corporation (South Korea) signed a memorandum of understanding (MOU) with Exide Energy Solutions Ltd. (India) to advance EV battery localization in India.

Moreover, Asia-Pacific is poised to register the highest CAGR of 34.5% during the forecast period. The rapid growth of APAC's infrastructure, particularly in China, South Korea, Japan, and India, coupled with the rapid expansion of regional economies, growing demand for EVs, and the increasing development of charging infrastructure, all contribute to the growth of this regional market. Furthermore, significant investments by market players in EV battery development further drive this growth.

Electric Vehicle [EV] Battery Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last three to four years. Some of the key players operating in the EV battery market are SK Innovations Co. Ltd. ( South Korea), LG Chem, Ltd (South Korea), Farasis Energy (GanZhou) Co., Ltd. (China), SVOLT Energy Technology Co., Ltd. (China), BYD Company Limited (China), Samsung SDI Co., Ltd. (South Korea), GS Yuasa International Ltd. (Japan), Vehicle Energy Japan Inc. (Japan), Northvolt AB (Sweden), Panasonic Corporation (Japan), Contemporary Amperex Technology Co. Limited (CATL) (China), A123 Systems, LLC (China), Exide Industries Ltd. (India), Primearth EV Energy Co., Ltd. (Japan), E-One Moli Energy Corp. (Taiwan), StoreDot Ltd. (Israel), NOHMs Technologies, Inc. (U.S.), Lithium Werks B.V. (Netherlands), Faradion Limited (U.K.), and QuantumScape Corporation (U.S.).

Electric Vehicle Battery Industry Overview: Latest Developments from Key Industry Players

• In June 2024, Schneider Electric SE (France) and AVEVA (U.K.) partnered with N-CORE Systemes (France) to enhance efficiency in EV battery production.

• In December 2023, Panasonic Energy Co., Ltd. (India) partnered with Sila Nanotechnologies, Inc. (U.S.) to procure next-generation silicon anode materials for EV batteries.

Electric Vehicle [EV] Battery Market Research Summary

Key questions answered in the electric vehicle battery market report: