Published on: December 10, 2019
A lithium-ion battery is a rechargeable battery variant that has three primary functional components — positive and negative electrodes and an electrolyte. The growing demand for energy-efficient batteries has made it imperative for vendors to focus on R&D initiatives to improve energy density, operating temperature, durability, charging time, and cost of lithium-ion battery technology. Lithium-ion batteries are widely used in hybrid electric vehicles (HEVs), electric vehicles (EVs), portable electronic devices, and other military and aerospace applications. Lithium-ion batteries are known to have low self-discharge, high energy density, and relatively long life as compared to other battery technologies available in the market.
We have categorized the global lithium-ion battery market as a part of the overall renewable electricity market, which covers companies engaged in the generation and distribution of electricity using renewable sources such as biomass, geothermal energy, solar energy, hydropower, and wind power. According to our analysis, the global lithium-ion battery market is expected to grow at a CAGR of 11.34% until 2021, which is attributable to factors such as the growing demand for Energy Storage Systems (ESS) for renewable energy. Also, the polluting effects of lead-acid batteries and the subsequent need for clean energy storage technologies will drive the growth of the market. Some of the key trends in the market include legislative support for battery recycling, a decline in lithium-ion battery price, and the evolution of next-generation lithium-ion batteries.
The global lithium-ion battery market can be segmented into the following:
According to our analysis, consumer electronics is the most dominant application segment in the global lithium-ion battery market, as it will account for a revenue share of 52.4% in 2021. Also, we have identified the Americas as the fastest-growing geography as it will grow at a CAGR of 15.1% until 2021. The growth of the lithium-ion battery market in the Americas is attributable to factors such as the increase in renewable power generation and the surge in the adoption of EVs and HEVs.
Various underlying factors might drive or impede the growth of the global lithium-ion battery market during the forecast period. We have identified the following growth drivers for the market:
As the penetration of renewable energy sources grows, the amount of power that utilities have to manage as well as the uncertainties involved due to their intermittent nature, have also increased. Thus, such factors have compelled utilities to adopt sophisticated Energy Storage Systems (ESS) to manage and reduce the stress on the power grid. Also, from the end-user's perspective, ESS can lower electricity costs by safely storing the electricity bought at low off-peak prices. Consumers who charge their batteries during off-peak hours may also sell the power to utilities or other consumers during peak hours. Thus, all these factors will accelerate the demand for lithium-ion batteries as they are compact, lightweight, and provide low self-discharge rates with high efficiency. Also, lithium-ion batteries are ideal for grid energy storage and renewable energy grid integration applications.
Factors such as the growth in the automotive and warehousing sectors worldwide and an increase in demand for battery energy storage applications in Southeast Asia to supplement renewables have contributed to the surge in demand for lead-acid batteries. However, the production of lead-acid batteries involves the use of large quantities of lead, a portion of which is often released along with the discharged fumes. Also, improper disposal of lead-acid batteries can contaminate the soil, surface water supplies, and groundwater. Thus, all these factors are encouraging end-users to gravitate toward lithium-ion batteries, which will accelerate the growth of the global lithium-ion battery market.
In recent years, a significant decline in the prices of smart wearable devices has contributed to a surge in the adoption rate of these devices in both developed and developing countries. According to our analysis, in 2016, the smart wearables segment of the global battery market was valued at $48.5 million and is expected to grow at a CAGR of 28.9% to reach $172.7 million by 2021. As smart wearables use lithium-ion batteries as the power source, the global lithium-ion battery market is expected to grow in tandem with the increasing adoption of smart wearables.
Meanwhile, the vendors operating in the global lithium-ion battery market face numerous challenges in increasing their sales and improving profitability. The following are some of those challenges:
Conventional batteries such as lead-acid batteries and lithium-ion batteries require a long recharging period, hold less energy with each charge, and have to be replaced every 2-3 years. To overcome such difficulties, more of these end-users are opting for fuel cell systems. Fuel cells yield electricity by utilizing the power generated from electrochemical reactions and use external sources of chemical energy such as oxygen and hydrogen to produce energy. Thus, this shift toward fuel cell technology to power automobiles such as EVs has led to a decline in demand for lithium-ion batteries, which can potentially impede the growth of the global lithium-ion battery market.
The lithium-ion battery market is facing a shortage of lithium due to the surging demand from the EV battery manufacturing sector. According to the International Energy Agency (IEA), EV stocks increased from a few hundred in 2005 to more than one million in 2015. Such factors have contributed to a surge in demand for lithium as most EVs are powered by lithium-ion batteries. The shortage and rise in prices of lithium chloride, lithium carbonate, and lithium hydroxide will translate into an increase in the prices of lithium-ion battery-operated devices and impede the growth of the global lithium-ion battery market as well.
Due to their chemistry, lithium-ion batteries are prone to overheating issues, which can lead to them exploding. These batteries use lithium as the anode due to its high electrochemical potential. Consequently, when lithium ions move toward the electrode, they produce a significant amount of energy. Lithium is an excellent choice for producing high-capacity batteries due to its low atomic weight, which reduces the mass of lithium-ion batteries. However, the same property makes it a highly reactive substance and causes thermal runaway. Lithium-ion batteries have also become a major concern for the airline companies following a series of incidents in which Boeing 787 aircraft installed with these battery variants caught fire. Such incidents have made it imperative for airlines to ban passengers from carrying lithium-ion batteries, which will have an adverse effect on the growth of the global lithium-ion battery market.
Our reports encompass a holistic analysis, market size and forecast, trends, growth drivers, and challenges, as well as vendor analysis. In our global lithium-ion battery market report, we have provided a detailed analysis of around 25 vendors, including several prominent players such as Toshiba Corporation, SAMSUNG SDI, Panasonic, LG Chem, and A123 Systems.
The following are some of the key developments mentioned in our global lithium-ion battery market report:
Backed with competitive intelligence and benchmarking, our global lithium-ion battery market research report is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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