The global demand for lithium-ion batteries is poised for an unprecedented surge in the next decade. By 2030, the requirement is projected to skyrocket from about 700 GWh in 2022 to approximately 4.7 TWh. This explosive growth, primarily driven by the mobility sector, especially electric vehicles (EVs), is a reflection of a significant shift in consumer preferences and regulatory landscapes.
Key Drivers of Demand
The Growing Market and Industry Response
The market for Battery Energy Storage Systems (BESS) is also expected to grow at a compound annual growth rate (CAGR) of 30%, indicating a broad-based demand across various applications.
China is set to lead this demand, expected to account for 45% of the total Li-ion battery demand by 2025, diminishing slightly to 40% by 2030. However, the highest growth rates are anticipated in the EU and the US, fueled by regulatory changes and a trend towards localizing supply chains. This massive demand necessitates the construction of 120 to 150 new battery factories globally by 2030.
Economic Implications
This surge in Li-ion battery demand will have significant economic ramifications. The revenue along the entire value chain is projected to increase fivefold, from around $85 billion in 2022 to over $400 billion in 2030. Active materials and cell manufacturing sectors may witness the largest revenue pools.
The Role of Recycling
While mining remains a primary source for battery materials, recycling emerges as a vital alternative. Although the recycling segment might be relatively small by 2030, it is expected to grow substantially in the following decade as more batteries reach their end-of-life.
The future of Li-ion batteries looks bright and industrious, shaped by a confluence of regulatory shifts, consumer preferences, and industry commitments. This growth trajectory not only represents a significant opportunity for the battery industry but also underscores the shifting paradigms in global energy consumption and environmental consciousness.
