Increasing Requirement Of Batteries In Electric Vehicles Is Boosting Battery Metals Market Growth

The global battery metals market size is anticipated to reach USD 17.8 billion by 2027, expanding at a CAGR of 2.4%, according to a new report by Grand View Research, Inc. The increasing requirement of batteries in electric vehicles and energy storage systems is boosting market growth. Battery structure consists of 5 major components; casing, electrodes, separator, electrolyte, and collector. Metals are majorly used in electrodes with different chemistries. Various metals are utilized in batteries, where lithium, cobalt, and nickel account for major share. Lithium-based batteries’ prominence is increasing owing to its rapid adoption in electric vehicles and energy storage systems.

Nickel is a major component in lithium-ion and other rechargeable batteries and its adoption is increasing at an accelerated rate, owing to its phenomenal properties and low cost. In near future, batteries are expected to form a major cost component in electric vehicles and other applications, and hence, it becomes vital for manufacturers to lower the manufacturing cost.

Cobalt, one of the largest product segment of the market is witnessing a declining demand trend owing to its high cost and growing concerns towards human rights and child labor during its mining in Democratic Republic of Congo. Factors including human and financial costs and high demand for energy density have propelled battery makers to reduce the reliance on cobalt. For instance, major manufacturers such as SK Innovation and LG Chem are in the process of developing cathodes with NMC 811 chemistry that consists of 80.0% nickel and 10.0% cobalt.

Electric vehicles (EV) is fastest growing application segment of the market. The consumption of metals in producing EV battery is increasing, as unlike conventional vehicles, EVs require large battery owing to absence of internal combustion engine. Increasing EV production is anticipated to surge demand for battery metals in near future.

Global EV stock crossed the 5.0 million mark in 2018 and the production is anticipated to further grow at a steady rate during the coming years. However, the covid-19 pandemic had a major hit on the automotive manufacturing and other sectors as well, which declined the production and consumption of batteries in 2020. The overall impact and duration of covid-19 on the world is unknown, but, considering the government initiatives in certain countries to resume manufacturing under strict protocols may uplift market growth.

Asia Pacific was the largest regional segment in 2019 and this trend is expected to continue over the forecast period. Factors such as rapid development in the EV industry propelling battery demand, China’s dominance over the supply chain, and increasing production capacities in Japan and India are propelling market growth in the region.

India’s initiatives towards the EV industry coupled with ease of manufacturing in the country are propelling foreign manufacturers to set up plants in the country. For example, in March 2020, U.S. based XNRGI opened a lithium-ion battery factory in Gurugram, India with an annual production storage capacity of 240 MWh. Also, Indian Oil Corporation Ltd. has announced its plan to build a 1 GW plant for producing EV batteries.

The market is highly competitive in nature owing to presence of major players such as Sumitomo Albemarle; SQM; Sumitomo Metals Mining Co. Ltd.; Vale; Umicore; and Glencore. Long-term agreements are observed in the market amongst automotive, battery, and refined metal manufacturers.

In order to maintain a competitive share in the market, companies are engaged in capacity expansion and acquisitions. For example, in 2020, Pacific Rim Cobalt (now, Bolt Metals Corp) secured its government approval for registration of the Cyclops Nickel-Cobalt Project license in Indonesia. The project aims towards fulfilling increasing demand for metals in batteries for long-term.

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Battery Metals Market Report Highlights

• Europe expected to witness a CAGR of 3.0% in terms of revenue across the forecast period, on account of increasing expansion of battery production capacity in the region
• Electric vehicles is fastest growing application segment, with a CAGR of 2.9% in terms of revenue during the forecast period. Growing production of EVs across the globe is propelling battery and eventually metals demand
• Starter, lighting, and igniting held a volume share of 25.0% in 2019 as automotive constitutes the major application share of batteries. The share is anticipated to reduce over the forecast period owing to rising adoption of EVs over conventional vehicles.
• In terms of revenue, nickel is expected to witness a CAGR of 3.9% in terms of revenue over the coming years, owing to its increasing demand in nickel cadmium, nickel metal hydride, and lithium-ion batteries.
• Growing demand from the EV industry has augmented battery makers to increase their production capacity. For example, in January 2020, joint venture of Suzuki, Toshiba, and Denso announced an investment of ₹3,715 crore (~USD 490 million) for production of EV batteries in India.

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