Market intelligence firm IDTechEx has released a report titled “Li-ion Battery Market 2025-2035: Technologies, Players, Applications, Outlooks and Forecasts,” projecting that the global lithium-ion (Li-ion) battery cell market will surpass $400 billion by 2035. The report examines the long-term effects of declining battery prices on the Li-ion battery industry.
Key raw materials like lithium, nickel, cobalt, and graphite significantly influence the overall cost structure of Li-ion batteries. Fluctuations in the prices of these core components directly affect battery pricing trends. Supply and demand dynamics are also crucial; for example, Lithium Iron Phosphate (LFP) batteries are widely used due to their lower cost compared to Nickel Manganese Cobalt (NMC) chemistries. In 2022, however, LFP cathode prices rose faster than expected due to a surge in demand, particularly in China. This led to rapid expansion and eventual overcapacity in LFP cathode production by 2023 and 2024, causing prices to drop to around $5 per kilogram and increasing competition among producers.
While lower battery prices benefit consumers, they can hinder new investments and create challenges for emerging players, especially in European and North American markets. These regions are concerned about the influx of low-cost electric vehicles from China, made possible in part by affordable LFP batteries.
Despite these challenges, the medium- to long-term outlook for the Li-ion battery market remains positive. Significant growth opportunities exist across the supply chain, supported by robust policy initiatives promoting electric vehicles and renewable energy. Legislation such as the U.S. Inflation Reduction Act and emission standards in Europe are expected to sustain demand for electric vehicles outside of China. Additionally, the increasing deployment of renewable energy sources will continue to drive the adoption of energy storage systems.
Source: BusinessWire
