Powering the Future: A Look at the Evolution of Lithium-ion Batteries

February 21 19:58 2023
Powering the Future: A Look at the Evolution of Lithium-ion Batteries
Lithium-ion Batteries
The global lithium-ion battery market size is projected to reach USD 135.1 billion by 2031, at a CAGR of 13.1% during the forecast period.

The lithium-ion battery is one of the most important batteries in the current economic system. It is estimated to account for most of the share in the battery market, especially with major phone and electric vehicle applications. This battery has a dominant position in the market because it offers high energy density and other exceptional specifications. Due to this fact, it has been estimated that lithium-ion batteries currently hold a significant market position and will not go anywhere for the next 5 to 10 years.

The global lithium-ion battery market size is projected to reach USD 135.1 billion by 2031, at a CAGR of 13.1% during the forecast period.

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There are several companies and start-ups that are working on the development of new and innovative batteries. But most of these innovative battery technologies are either partially commercialized or still in the research & development stage. Moreover, due to technical problems, i.e., some of the specifications are not suitable, we do not see these batteries in the market very often. A few innovative battery technologies are theoretically best but not practical, and thus, require detailed research and development. Even if these are batteries with new technology commercialized in the market, they have very few applications. We do not see such batteries in larger applications such as phones or electric vehicles. Several battery technologies are currently in the R&D phase, but none can compete with lithium-ion batteries. Despite some drawbacks in lithium-based batteries, they will be the future battery technology or may account for a large chunk of the share, at least for a significant amount of coming years.

Apart from just reliable technical specifications for lithium-ion batteries, industries have solid logistics infrastructure from mining, transportation, production, battery manufacturing, machine development, etc. This further helps in understanding that if we have to commercialize any other battery technology, and that too for more significant applications, then battery manufacturing companies have to build solid logistics infrastructure similar to the lithium-ion battery. Here when we say significant application, we mean smartphones and electric vehicles. This is because, apart from other applications, most of the battery demand comes from smartphones and electric vehicles. Also, machines are better equipped to develop batteries that can be easily implemented in such applications. Hence, if any battery with newer technology has to show its dominance in the battery market, it has to offer batteries for these applications.

Further, based on the recent statistics from USGS, the worldwide production of lithium has increased to 100,000 tons in 2021 compared with 82,500 tons in 2020. This is because of the result of strong demand from the end application. To meet the growing demand for lithium batteries, an attempt has been made to explore more reserves. Recently, vast lithium deposits have been discovered in Mexico, worth around USD 602 billion. Similarly, earlier this year, China found lithium reserves in the Himalayas, which account for about 1 million tons of lithium oxide resources.

Lithium Production and Reserves

Source: USGS (January 2022)

The charts depict that the production and reserves of lithium-ion are expected to meet the demand for lithium-ion batteries for at least 5-10 years for various applications. If some other battery technology has to dominate the battery market, its production capacity and raw material must be of this scale.

We at MarketsandMarkets have developed a 360° understanding of the battery and its related technology. It includes studies on various battery technologies, including lithium-ion batteries, recycling, battery management, and details of the electrode. Below are a few of the associated studies:

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