The global battery market is expected to reach $329.84 billion by 2030, up from $134.6 billion in 2024. A compound annual growth rate of 16.4 percent is projected from 2025 to 2030. The increasing adoption of electric vehicles stands out as a key factor driving market growth. The global battery market increased by 25 percent in 2024, reaching 17 million units, driven by electric car sales. With the expectation of a sharp increase in demand for electric vehicles by 2035, increasing demand for batteries remains a hot topic. In this regard, annual battery demand exceeded 1 terawatt-hour (TWh) in 2024, reaching a record figure.
The rise of electric vehicles has increased the demand for improved lithium batteries. In 2024, the demand for improved lithium batteries has increased due to their significant advantages over standard lithium-ion batteries, their more cost-effective production, and their significantly higher storage capacity. Sulfur is more environmentally friendly than cobalt, nickel, and other raw materials used to make lithium-ion batteries. The global battery market is projected to reach $329.84 billion by 2030, up from $134.6 billion in 2024, growing at a compound annual growth rate of 16.4 percent from 2025 to 2030. The increasing adoption of electric vehicles stands out as a key factor driving market growth.
-The Asia Pacific battery market dominated the global market, accounting for over 54 percent of the revenue in 2024.
-The growth of the Chinese battery market is attributed to a combination of government support, industrial policy, and technological innovation. - Industrial batteries, depending on the application, held a 35 percent share in 2024.
- Automotive batteries reached 31 percent in 2024.
- Lithium-ion batteries are expected to hold a significant market share of over 45 percent in 2025. The battery market:
- Market size in 2024: $134.6 billion
- Estimated market size in 2030: $329.84 billion
As countries continue their investments in this regard, they are taking steps to pioneer the research and development of lithium-sulfur batteries. At the end of 2024, a company in the US announced a $1 billion investment. This will be the world's first lithium-sulfur battery facility of its kind. When the facility is operating at full capacity, it will be able to produce up to 10 gigawatt-hours of batteries, including lithium-sulfur battery cells. Meanwhile, the average battery price for an electric car is considered a key threshold for cost-competitiveness with conventional models, with cheaper battery materials acting as a significant driver. Rapid developments in the battery industry continue, and after years of investment, global battery production capacity is expected to triple within the next five years. These trends indicate that the battery sector is entering a new phase of development. Markets used to be regional and small, but are now global and vast, with a range of technological approaches driving standardization.
Looking ahead, economies of scale, partnerships across the supply chain, production efficiency, and the ability to bring innovations quickly to market will be crucial for competitiveness. This will likely lead to further consolidation across the industry, while also being reshaped by country-led efforts to geographically diversify battery supply chains. Currently, China produces more than three-quarters of batteries sold globally. By 2024, average prices will fall by 30 percent faster than elsewhere in the world, while batteries in China will become 20-30 percent cheaper than in Europe and North America, respectively. Falling battery prices are a key reason why many electric vehicles in China are now cheaper than their conventional counterparts. With over 70 percent of all electric vehicle batteries produced in China, these steps by manufacturers centralizing expertise and driving innovation in the battery sector are driving growth. Scaling production faster and more efficiently, and most importantly, achieving higher production yields, are driving success. Supply chain integration, resulting from single-company acquisitions and close collaboration between leading companies, is driving faster innovation and lower production costs, supported by access to below-market prices for critical minerals. The Chinese automotive ecosystem encompasses all stages of the supply chain, from the production of batteries and other components to the final production of batteries and electric vehicles.
While Chinese manufacturers prioritize lithium-iron phosphate, a cheaper battery, they now account for nearly half of the global electric vehicle market after more than tripling their share in the last five years thanks to years of research and development. Today, they offer competitive prices that are approximately 30 percent cheaper than their main competitors, lithium nickel cobalt manganese oxide batteries. This suggests that China will remain by far the largest battery producer in the Chinese battery market, which includes approximately 100 manufacturers, in the medium term. Despite China's current market dominance, battery production expansion is also progressing rapidly elsewhere.
Korea and Japan are strong in the battery sector, and despite both countries' limited domestic battery production, they host established manufacturers with significant overseas investments. Korean manufacturers are projected to meet more than one-fifth of global electric vehicle battery demand by 2024, while Japanese manufacturers account for approximately 7 percent. Meanwhile, in the US, battery production capacity is set to double, with investments that will see approximately 40 percent of existing capacity operated or developed by established battery manufacturers in close collaboration with automakers. Southeast Asia and Morocco are emerging as potential production hubs for batteries and their components, attracting significant Chinese investment that could accelerate technology and innovation transfer. In Indonesia, home to half of the world's mined nickel, the first battery production and graphite anode plants began production in 2024. Meanwhile, Morocco boasts the largest reserves of phosphate, an essential mineral for batteries, an established auto manufacturing industry, and free trade agreements with the European Union and the United States. These factors have contributed to more than $15 billion in investment in battery and component production by 2022.
Despite ongoing innovation in the battery industry, the degree of concentration in battery supply chains has raised security concerns among governments in recent years. Diversifying battery production and supply chains takes time, and any country interested in expanding production will need time and investment to support local production, develop expertise, and reduce production cost differentials compared to China. While such efforts require sufficient and sustainable battery demand, electric vehicle sales, which currently account for 85 percent of the battery market, will be the only driving force behind sufficient volume generation. Strategically deploying automation, digitalization, and innovation will also play a key role in achieving sufficient production efficiency to compete with Chinese production and facilitate supply diversification. Collaborating with battery manufacturers through joint ventures or technology licensing agreements can reduce the time and investment required for nearshore battery production and develop local supply chains. Therefore, closer collaboration with other battery markets and resource-rich countries such as South America and Africa, Australia, and Indonesia may be necessary.
