Battery Material Market

Rising demand for Li-ion batteries is driving the market growth

Market CAGR for battery materials is driven by the rising demand for Li-ion batteries. The growing emphasis on using recycled Li-ion battery materials is a significant market trend. For instance, Fortum, a producer of clean energy solutions, recycles more than 80% of Li-ion materials thanks to its revolutionary work in transforming the battery value chain for numerous industrial and electric vehicle applications. Nickel, cobalt, and manganese may be recovered from the battery for reuse in the manufacture of new batteries thanks to the company's industrial-scale and low-CO2 procedures.

The hydrometallurgical recycling method uses a chemical precipitation process to extract rare materials and transfer them to battery producers for reuse to create new batteries. Therefore, it is predicted that the increasing emphasis on the recycling process will drive the market in the coming years.

The demand for electric vehicles is accelerating due to the automotive industry's continual improvements and rapid development. The demand for zero-emission electric vehicles has increased due to favorable government regulations on subsidies, tax rebates, and new car registration, as well as the growing concern of various government organizations toward a cleaner and greener environment. Sales of electric vehicles are projected to be driven by the rising demand for carbon emission reductions and the development of quick, high-tech charging stations, which will help the demand for the product.

In addition, the commercial electric sector has expanded due to the growing use of electric buses, particularly in China and India. Most electric vehicle batteries are lithium-based and comprise a combination of nickel, manganese, cobalt, graphite, and other elements. Due to increased manufacturing volume and more efficient production processes created by the manufacturers, lithium-ion battery prices have significantly decreased. Thus, driving the battery materials market revenue.September 2022- Advanced Battery Concepts developed an energy-releasing battery system to ensure responsible battery use. Its products are designed with re-manufacturability in mind so that the highest rates of proper recycling can be achieved.

Emerging markets, particularly in Asia and Africa, are experiencing rapid urbanization, which is driving the Global Battery Materials Market Industry. As urban populations grow, the demand for energy-efficient solutions, including batteries for consumer electronics and electric public transport, is escalating. This demographic shift is likely to create new opportunities for battery manufacturers and material suppliers. The increasing purchasing power in these regions may lead to higher consumption of battery-powered devices, further propelling market growth. The overall market is poised for expansion, with projections indicating a significant increase in value over the next decade.

The increasing adoption of electric vehicles (EVs) is a primary driver of the Global Battery Materials Market Industry. As governments worldwide implement stricter emissions regulations and provide incentives for EV purchases, the demand for high-performance batteries is surging. In 2024, the market is projected to reach 36.7 USD Billion, reflecting the growing need for lithium-ion batteries, which are essential for EVs. This trend is expected to continue, with the market anticipated to expand significantly as EV sales are forecasted to grow exponentially in the coming years, further propelling the demand for battery materials.

Government policies play a crucial role in shaping the Global Battery Materials Market Industry. Many countries are implementing regulations aimed at promoting sustainable energy solutions, including incentives for battery production and recycling. For example, initiatives to support local sourcing of battery materials are becoming more prevalent, which could enhance supply chain resilience. These regulatory frameworks not only encourage investment in battery technologies but also stimulate demand for raw materials such as lithium, cobalt, and nickel. Consequently, the market is expected to grow at a CAGR of 7.62% from 2025 to 2035, driven by these supportive policies.

The shift towards renewable energy sources is significantly influencing the Global Battery Materials Market Industry. As solar and wind energy become more prevalent, the need for efficient energy storage solutions is increasing. Batteries are essential for storing energy generated from renewable sources, ensuring a stable supply during periods of low generation. This trend is expected to drive demand for advanced battery materials, as energy storage systems become integral to grid management. The anticipated growth in this sector is likely to contribute to the overall market expansion, aligning with the projected increase in market value to 82.2 USD Billion by 2035.

Innovations in battery chemistry are transforming the Global Battery Materials Market Industry. Research and development efforts are focused on enhancing battery performance, safety, and longevity. For instance, the emergence of solid-state batteries promises higher energy densities and faster charging times compared to traditional lithium-ion batteries. These advancements could lead to a more efficient use of materials, thereby influencing market dynamics. As these technologies mature, they are likely to attract substantial investments, contributing to the projected market growth from 36.7 USD Billion in 2024 to an estimated 82.2 USD Billion by 2035.

By region, the study provides market insights into North America, Europe, Asia-Pacific and Rest of the World. The North American battery materials area will dominate this market. This is primarily due to the population's steadily expanding demand for modern consumer goods and electric automobiles. As of December 2021, there were approximately 2.3 million electric vehicles in the country, with the bulk being based in California and the Northeast.

The North American market for battery materials has expanded quickly due to a combination of factors, including severe government laws surrounding automobile emissions, high consumer disposable income, and strong consumer awareness of sustainability and environmental protection.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: BATTERY MATERIALS MARKET SHARE BY REGION 2022 (%)                               

Source: Primary Research, Secondary Research, Market Research Future Database and Analyst Review

Europe battery materials market accounts for the second-largest market share. By the end of 2021, around 5.6 million plug-in electric automobiles and light trucks were operating in Europe.  Additionally, Germany's expanding electronics and automotive sectors may open up significant new growth prospects for the  market for battery materials. Further, the German battery materials market held the largest market share, and the UK battery materials market was the fastest-growing market in the European region.

The Asia-Pacific Battery Materials Market is expected to grow at the fastest CAGR from 2023 to 2032. The majority of Indian businesses are making alliances with foreign businesses and establishing new manufacturing facilities to construct EV battery factories utilizing locally produced battery materials, which will fuel the expansion of the  battery materials market in the area. With over 231 thousand units sold, two-wheelers were the most popular type of electric vehicle sold in India during the fiscal year 2022, according to Auto Punditz.

Moreover, China’s battery materials market held the largest market share, and the Indian battery materials market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing largely in research and development to expand their product lines, which will help the battery materials market, grow even more. Market participants are also undertaking various strategic activities to expand their  footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To grow and endure in an increasingly competitive and challenging market environment, the battery materials industry must offer cost-effective items.

One of the most important business strategies manufacturers use in the  battery materials industry to assist customers and expand the market sector is local manufacturing to reduce operational costs. In recent years, the battery materials industry has offered some of the most significant advantages to medicine. Major players in the battery materials market, including DowDuPont (US), Mitsubishi Chemical Corporation (Japan), BASF SE (Germany), 3M (US), and others, are investing in research and development operations to improve market demand.

POSCO Chemical Co Ltd manufactures coal chemistry and carbon products. Its primary businesses include, among others, refractory manufacturing and sales, furnace construction and maintenance, lime business, environmental business, comprehensive chemicals, carbon materials, and secondary battery anode materials. In June 2020, POSCO Chemical boosted its anode material production capacity by completing the construction of a second anode material factory in Sejong. This is in response to increased demand for secondary battery material, which prompted the company to extend the anode production systems at the factory, which has a capacity of 44 KT per year.

Volkswagen is a major automobile manufacturer in the world. Volkswagen passenger cars, Audi, Bentley, Lamborghini, Porsche, SEAT, and Skoda, are among the automotive brands. MAN, Navistar, Scania, and Volkswagen are among the commercial vehicle manufacturers. The financial services division of the corporation offers dealer finance to support floor plans, consumer financing for vehicle purchases, leasing, banking, and other financial services. In September 2022, Volkswagen launched a $2.9 billion battery parts joint venture with Belgian materials business Umicore, making it the latest European carmaker to bring battery supplies closer to home as the automotive industry shifts to electric vehicles.

While raw materials such as lithium, cobalt, nickel, and manganese will continue to be sourced ly, cathode manufacture for batteries will take place in Europe as part of the joint venture, most likely at Umicore's Poland plant.