Battery Materials Market Size, Share & COVID-19 Impact Analysis, By Battery Type (Lithium-Ion, Lead Acid, Others), By Material (Lithium-Ion {Cathode [LCO, NMC, NCA, LMO, LFP]), Anode [Artificial Graphite, Natural Graphite, Others], Electrolyte, Separator, Others), (Lead Acid {Cathode, Anode, Electrolyte, Separator, Others}), By Application, and Regional Forecast, 2020-2027

The global battery materials market size was USD 47.75 billion in 2019 and is projected to reach USD 60.61 billion by 2027, exhibiting a CAGR of 5.9% during the forecast period.

About 60% of the battery is made up of a combination of materials such as manganese (cathode), potassium, and zinc (anode). Secondary batteries are rechargeable and are obtained from nickel-hydrogen, lithium-ion, and nickel-cadmium sources. Lithium-ion batteries are extensively adopted owing to their high energy density and are significantly used in automotive, industrial, and consumer electronics applications. Improved compatibility and reliability of Li-ion batteries has led to the surge in demand for cathode battery materials. The rising demand from the automotive industry for various battery types such as lithium-ion and lead-acid batteries will drive the market size.

Limited Availability of Raw Materials & Supply Chain Disruption amid COVID-19 to Hinder Growth

The COVID-19 pandemic is rapidly spreading across countries while causing a significant impact on all levels of the supply chain. The energy storage sector is facing difficulties in production, shipping delays, project growth, and research and development. A decline has been witnessed in the product sales and production rate of battery materials. Moreover, constraints in supply and logistics due to the ban on exports and imports of raw materials for batteries are causing major disruptions.

The major China-based lithium-ion (Li-ion) battery manufacturers CATL and BYD have announced production delays. The original equipment manufacturers (OEMs) who supply batteries and raw materials from China have been hit badly due to this disruption. Few OEMs in Japan, Korea, and Taiwan have continued to obtain materials from alternative suppliers, with factories able to satisfy short-term demand, while others have halted operations. Owing to the COVID-19 induced demand difficulties, the battery manufacturing industry in China is expected to face a shortfall in the capability of 25 GWh to 30 GWh in 2020.

The challenges faced by manufacturers in China include reduced orders and unfulfilled payments. Big battery producers face the risk of a decrease in sales, and larger companies are likely to realign their customer base by gaining a share of the user base of small manufacturers to produce adequate cash flow.

Logistics is another challenging factor for battery producers during the pandemic. Countries that are vital for the processing of lithium and other metals to manufacture batteries have imposed limits and regulations. A general curfew has been enforced in Chile, and there is a countrywide quarantine in Argentina, where both the countries have considerable reserves of lithium.

BATTERY MATERIALS MARKET TRENDS

Increasing Adoption of Recycled Lithium-Ion Battery Material to Favor Growth

Presently, the increasing focus on adopting recycled Li-ion battery materials is a major market trend. For instance, Fortum, a clean-energy solutions provider, recycles over 80% of Li-ion materials having revolutionized the battery value chain across several industrial and electric vehicle applications. The company’s industrial-scale and low-CO2 processes allow recovering nickel, cobalt, and manganese from the battery for reuse and in producing new batteries. The hydrometallurgical recycling method involves a chemical precipitation procedure that allows rare minerals to be recovered and transported to the battery manufacturers for reuse in new battery production. Therefore, the growing focus on the recycling process is expected to drive the market in the forthcoming years.

Increasing Focus on Management of Waste Lead Acid Batteries to Fuel Market Growth

Lead is the primary raw material for lead-acid batteries and accounts for more than 60% of the battery quality. Lead is heavy metal, and the lead-acid battery chain is at high risk of lead pollution. Poor management can cause environmental contamination and risk to human health.

The widespread use of lead-acid batteries as power supplies for vehicles has led to a steady demand due to their low cost and high availability. Consequently, the volume of waste lead-acid batteries has risen to new levels, and the emission generated by them has also increased dramatically. Since lead is harmful to the atmosphere and humans, recycling and waste disposal of lead-acid batteries has been a big concern and receives a great deal of public attention. Several developments have recently been introduced for the recovery of lead and lead-containing compounds from lead-acid waste batteries. Presently, technological advancements have led to the development of lead-acid batteries comprising over 80% recycled lead battery materials that has enabled it to be the lowest eco-friendly footprint energy storage source.  

BATTERY MATERIALS MARKET GROWTH FACTORS

Increasing Demand for Electric Vehicles to Boost Market Growth

Rapid evolution with the ongoing developments in the automotive industry is propelling the demand for electric vehicles across the globe. Favorable government norms in terms of subsidies, tax rebates, new car registration, along with the growing sensitivity of various government organizations towards a cleaner and greener environment, has surged the demand for zero-emission electric vehicles. The increasing demand for reduction in carbon emissions and the introduction of fast and advanced charging stations is likely to drive the electric vehicle sales, which in turn shall favor the product demand. In addition to this, the rising adoption of electric buses, mainly in India and China, has contributed to the growth in the commercial electric sector.

Most of the electric vehicle batteries are lithium-based and rely on a mix of manganese, cobalt, graphite, nickel, and other components. The lithium-ion battery prices have fallen steeply due to an increase in their production scale and the manufacturers having developed more cost-effective methods.

Growing Consumer Electronics Demand to Aid Market Growth

The high production of electronics products is attributed to the increasing demand for computers, TVs, mobile phones, and other devices. According to IBEF, the global consumer electronics market is worth USD 426.1 billion as of 2020. Advancement in technology, along with rapid development in the gaming industry, is likely to drive the consumer electronics market. The increasing demand for batteries in smartphones, laptops, smart electronic wearables, digital cameras, and tablets is likely to drive market growth.

Companies are investing in resources and the development of efficient and new battery technologies that are likely to surge the demand for innovative electronics in the market. With the increasing reliance on portable power chargers and mobile phones, the use of Lithium-Ion technology is expected to increase during the forecast period.

RESTRAINING FACTORS

Poor Charging Infrastructure May Hinder Market Growth

Poor charging infrastructure is likely to delay the launch of EV vehicles, which, in turn, is expected to hamper the overall industry growth. The carmakers have ruled out plans to withdraw combustion engines in India. Also, the company mentioned that unless there is a proper charging infrastructure in the place, it will be difficult to launch passenger electric vehicles in the Indian market. Renowned automakers and power companies are not investing towards charging infrastructure as it is a capital intensive and low demand for electric vehicles and in turn, hampering the overall market growth.

BATTERY MATERIALS MARKET SEGMENTATION ANALYSIS

By Battery Type Analysis

Lithium-Ion Dominated the Global Market in 2019 Due to Growing Electric Vehicles Demand

Based on the battery type, the market is segmented into lithium-ion, lead-acid, and others.

The lithium-ion segment is expected to be the dominant segment during the forecast period owing to the increasing demand for electric vehicles. It is used in portable electronic devices on account of its tint memory effect, low self-discharge, and high energy density. It has wide applications in consumer electronics, automotive, industrial, and others. Most of the automobile manufacturers are focusing on the production of electric vehicles as government organizations in several countries have taken initiatives towards a green environment and lowering carbon emission.

The growing demand for lead-acid batteries owing to their properties such as reliability, ease of purchase, tolerance to abuse, tolerance to overcharging, and ability to deliver high currents, among others propel the demand for such battery types globally.

The lead-acid segment is expected to witness significant market revenue during the forecast period. The expansion of vehicle manufacturing hubs mainly in Germany, the U.K., Brazil, the U.S., China, India, and Japan, shall drive the market growth. Lead-acid batteries are composed of cathode, anode, separator, and electrolyte. High disposable income, along with the surge in the overall passenger car sales in China and India, shall foster the overall market. Lead batteries are sustainable as they are recyclable and as per Battery Council International (BCI), 99% of all the lead batteries manufactured are recycled.

By Material Analysis

Cathode Material to Account for Major Market Share

Based on material, the lithium-ion is segmented into cathode, anode, electrolyte, separator, and others.

 The cathode segment is bifurcated into Lithium Cobalt Oxide, Lithium Iron Phosphate, Lithium Manganese Oxide, Lithium Nickel Cobalt Aluminium Oxide, and Lithium Nickel Manganese Oxide.

Anode material is further segmented into artificial graphite, natural graphite, and others. Cathode material may account for the major market share during the forecast period. The primary active components of cathode materials are cobalt, manganese, and nickel. Today, cobalt is substituted partially by nickel mostly Lithium Nickel Manganese Oxide (NMC) and Nickel Cobalt Aluminium Oxide (NCA). Cathode materials require an extremely high purity level and must be free from unwanted metal impurities, mainly sulfur, vanadium, and iron. The family of the battery includes various products catering to different user needs for high energy density or high load capacity.

Based on material, lead-acid is segmented into cathode, anode, electrolyte, separator, and others. Cathode material dominated the market in 2019 and may continue its dominance up to 2027. In a lead-acid battery, the anode is made of metallic lead, and the cathode is made of lead dioxide. Lead-acid batteries’ efficiency varies depending on the factors such as temperature and duty cycle that are typically around 75% and 85% for DC to DC cycling.

By Application Analysis

Consumer Electronics to Hold Highest Position

Based on application, the lithium-ion is segmented into consumer electronics, automotive, industrial, and others.

The increasing adoption of lithium-ion batteries in consumer electronics applications is likely to drive overall market growth. The growing demand for smart electronic devices owing to the increasing population and purchasing power parity with a change in lifestyle preference shall augment the industry demand. Also, governments across the world are focusing more on digitization, and promoting the proper utilization of electronic devices among consumers is a key attribute for market growth. The requirement and demand for battery power for wireless devices is increasing exponentially, which has created a significant market opportunity for battery developers.

Based on the application, lead-acid is segmented into automotive, industrial, and others.

Automotive applications account for a major market share during the forecast timeframe. A surge in automotive sales and production globally has led to a rise in vehicle electrification, which is driving the market. High efficiency, low cost, high performance, tolerance to overcharging, durability, and reliability are the key attributes that prompt the buyers and the automotive industries to opt for lead-acid batteries.

REGIONAL BATTERY MATERIALS MARKET ANALYSIS

North America is expected to showcase significant growth owing to the rapid adoption of electric vehicles with increasing consumer electronics sales in this region. The U.S. government is encouraging investors for renewable and electric vehicle industries, resulting in the increasing demand for battery-based energy storage systems mainly for lithium-ion batteries, which will primarily facilitate the growth in the region up to 2027.

Asia Pacific, led by India, Japan, China, and South Korea, is likely to reach USD 18.39 billion by 2027. Rapid urbanization, along with increasing consumer spending on electric vehicles, is expected to foster regional growth. Most of the Indian companies are forming strategies with overseas companies and introducing new production plant to build an EV battery plant using indigenous battery materials that will propel the global battery materials market growth in the region

The market in Europe is projected to showcase substantial growth during the forecast period. In June 2018, over one million plug-in electric passenger cars were registered in Europe, making it the second-largest car seller in the world. Additionally, the growing electronics and automotive industries in Germany may create lucrative growth opportunities in the global market for battery materials.

KEY INDUSTRY PLAYERS

Increasing Investment for Facility Expansion by Major Companies to Boost Market Share

The market is competitive with the presence of major players such as NICHIA Corporation, NEI Corporation, TCI Chemicals, Umicore, BASF SE, Asahi Kasei, and Hitachi Chemical. Most of the manufacturing companies, battery makers, and various research institutions are investing heavily in the technological advancements of these batteries which will create batteries with a long life cycle, high power density, environment friendly, high performance, and low cost. For instance, in February 2020, Dr. Hun-Gi Jung and his research team at the Center for Energy Storage Research of the Korea Institute of Science and Technology developed silicon anode materials that will increase the battery capacity and enable rapid charging up to 80% capacity in five minutes. Also, when these batteries are applied for electric vehicles, it is likely to double the driving range.

In March 2019, Asahi Kasei announced to enhance its manufacturing infrastructure for Li-ion battery (LIB) separator, which is expected to be completed by 2021. Asahi Kasei, a manufacturer of LIB separators, supplies both dry and wet process separators with its Celgard and Hipore products.

LIST OF KEY COMPANIES PROFILED IN BATTERY MATERIALS MARKET:

• NICHIA CORPORATION (Tokushima, Japan)


• NEI Corporation (Somerset, U.S.)


• TCI Chemicals (India) Pvt. Ltd. (Chennai, India)


• Targray Technology International (Quebec, Canada)


• Mitsubishi Chemical Holdings (Tokyo, Japan)


• Hitachi Chemical Co., Ltd. (Tokyo, Japan)


• TORAY INDUSTRIES, INC. (Tokyo, Japan)


• Shanghai Shanshan Tech Co., Ltd. (Shanghai, China)


• Kureha Corporation (Tokyo, Japan)


• BASF SE (Ludwigshafen, Germany)


• Asahi Kasei (Tokyo, Japan)


• Umicore Cobalt & Specialty Materials (CSM) (Brussels, Belgium)


• Other Key Players

KEY INDUSTRY DEVELOPMENTS:

• June 2020 - POSCO Chemical increased its production capacity for anode materials by completing the construction of a second anode material factory in Sejong. This is in response to demand for the secondary battery material, which persuaded the company to expand the anode production systems in the factory that has the capacity of producing 44 KT annually. The company has further increased the production capacity of the Gwangyang plant from 5 KT to 30 KT annually while opening two cathode material plants in South Korea.


• May 2019 – Glencore and Umicore entered into a partnership for cobalt hydroxide (cobalt) supply to Umicore’s battery materials value chain. This agreement aids in facilitating Umicore’s cobalt supply and expansion of the market. Also, it will provide Glencore’s long-term cobalt raw materials market access which is in line with increasing Umicore’s cathode materials sales.

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, application, and region. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

Report Scope & Segmentation