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Electric Vehicle (EV) Battery Market Size, Share & Industry Analysis, By Battery Type (Lithium-ion, Lead Acid, Nickel Metal Hydride, and Others), By Vehicle Type (Battery Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Hybrid Electric Vehicles), and Regional Forecasts, 2024-2032

Last Updated: July 08, 2024 | Format: PDF | Report ID: FBI101700



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The global electric vehicle (EV) battery market size was valued at USD 59.06 billion in 2023 and is projected to grow from USD 67.78 billion in 2024 to USD 111.20 billion by 2032, exhibiting a CAGR of 6.4% during the forecast period.

As the demand for Electric Vehicles (EVs) across the globe is increasing, so is the demand for electric vehicle batteries. Government focus on rapid electrification to reduce the dependence on imports of fossil fuels and to fight climate change are some of the major factors influencing the adoption of electric vehicles worldwide. Additionally, environmental concerns among the populace worldwide are influencing the adoption of green mobility, further driving the adoption of e-vehicles, which is anticipated to accelerate global electric vehicle battery market growth during the forecast period.

A wide range of batteries are used in electric vehicles, depending on their function and type. Batteries used in electric vehicles include lithium-ion, lead acid, nickel-metal hydride, and other batteries. Emphasis of the leading automakers on rolling out new vehicles with long-range and high battery capacities for the early development and adoption of their EVs is anticipated to surge the demand for EV batteries worldwide.

Despite the downfall of the automotive industry during the COVID-19 pandemic, the demand for e-vehicles continued to increase due to supportive regulatory frameworks provided by governments worldwide. Even before the pandemic, many countries were strengthening key policies such as CO2 emission standards and zero-emission vehicle (ZEV) mandates. Till 2021, over 20 countries announced bans on the sales of conventional cars or mandated all new sales to be BEVs. Therefore, increasing e-vehicle sales during the COVID-19 pandemic fueled the global market growth.

Electric Vehicle (EV) Battery Market Trends

Rising Mega-Trend for Electrification to Drive Market Growth

Rapid electrification is one of the ongoing trends in the market. The government's focus on establishing a strong network of EV charging stations and the EV ecosystem to drive the adoption of emission-free mobility is anticipated to influence the global EV battery market growth. In addition, OEMs' emphasis on embracing electrification more widely is also influencing the global market.

For instance, 18 of the 20 largest automakers (in terms of vehicles sold in 2023), which together will account for around 90% of the new car sales worldwide in 2023, have concrete plans to boost production of the current electric line-up and increase the number of available models. The exponential increase in Battery Electric Vehicles (BEVs), which are equipped with large lithium-ion batteries, and Plug-in Hybrid Vehicles (PHEVs) operating on the road will necessitate the implementation of high-power charging infrastructure in the next decade. These factors will influence the adoption of EVs and, in turn, the battery demand in the major markets.

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Electric Vehicle (EV) Battery Market Growth Factors

Declining Electric Vehicle Battery Cost to Augment Growth

The cost of electric vehicle batteries has been declining over the past decade. For instance, as per the Global Change Data Lab, the cost of lithium-ion batteries has dropped by nearly 97% in the past 30 years. Lithium-ion battery is one of the most highly utilized batteries in electric vehicles; therefore, the declining cost of these batteries is anticipated to influence the adoption of EVs, creating lucrative revenue growth opportunities for the market growth in the coming years. The declining cost of lithium-ion batteries, which are a predominant technology in EVs, is a significant driver for market growth. Economies of scale, improvements in manufacturing processes, and increased competition among battery manufacturers contribute to the downward trend in battery prices. Lower battery costs make electric vehicles more affordable for consumers, thereby expanding the market for EVs and driving the demand for batteries.


Potential Raw Material Shortages May Hamper Market Growth

China delivers three-quarters of all lithium-ion batteries, 70% of production capacity for cathodes, and 85% for anodes. In addition, Europe is responsible for over one-quarter of global assembly, but it has a tiny supply chain apart from cobalt processing at 20%. Moreover, the South Korean and Japanese economies have considerable shares of the supply chain downstream of raw material processing, particularly in the highly technical production of cathode and anode material.

The rapid increase in EV sales during the pandemic tested the resilience of battery supply chains. Closed battery manufacturing facilities during COVID-19 and political disputes between economies that are part of the battery supply chain are anticipated to create a shortage of raw materials, further restraining market growth.

Electric Vehicle (EV) Battery Market Segmentation Analysis

By Battery Type Analysis

Growing Lightweight Lithium-ion Batteries to Drive Segment Growth

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

The lithium-ion segment held the largest market share in 2023 and is expected to continue its dominance in the near future. Increasing demand for electric vehicle batteries with lightweight and high energy density for efficient operation is likely to drive the lithium-ion segment growth during the forecast period. Moreover, currently, all pure electric vehicles and the majority of hybrid electric vehicles utilize lithium-ion batteries as the main power unit. Furthermore, manufacturers' focus on conducting research and using various chemistries of lithium-ion to improve the energy density of the electric vehicle battery is likely to generate lucrative revenue growth opportunities in the coming years.

The lead-acid segment held the second-largest market share in 2023. All electric vehicles utilize lead-acid batteries as auxiliary power units to power secondary functions such as headlights, steering wheels, and others. Therefore, increasing EV sales are also driving the adoption of auxiliary power units, further influencing segment growth. However, energy storage solution providers such as Tesla are developing lightweight lithium-ion batteries to use as auxiliary power units. This may hamper the segment growth in the coming years.

The nickel metal hydride segment held a considerable market share in 2023. Various hybrid vehicle manufacturers, such as Toyota, Honda, and others, prefer nickel metal hydride batteries. Therefore, increasing demand for hybrid vehicles among the populace in emerging economies is likely to drive the segment growth during the forecast period.

The others segment includes sodium-ion batteries that are currently under development and are expected to enter mass production post-2025. Sodium-ion batteries are a low-cost alternative to lithium-ion batteries. Therefore, the expected surge in demand for batteries made from sodium-ion chemistry is anticipated to influence segment growth in the coming years.

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By Vehicle Type Analysis

Rising Electric Vehicle Sales to Drive Segment Growth

Based on vehicle type, the market is segmented into Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), and Hybrid Electric Vehicles (HEVs).

The BEVs segment held the largest market share in 2023 and is anticipated to continue its dominance with the highest CAGR during the forecast period. Increasing demand for zero-emission vehicles across Europe and other emerging economies to fight climate change and reduce fossil fuel dependency is anticipated to drive segment growth over the forecast period. In addition, the growing popularity of BEVs among developing economies for their low operating costs is also expected to influence segment growth in the near future.

The PHEVs segment held the second-largest market share in 2023. PHEVs can be charged from an external power source. Additionally, they also consist of an IC engine to power the vehicle. Therefore, PHEVs fill the gap between HEV and BEV, further providing a significant travel range and battery capacity along with fossil fuel-powered IC engines as an additional power source to drive the vehicle during low charging conditions. Therefore, the increasing popularity of PHEVs among the populace is driving segment growth.

The HEVs segment held a considerable market share in 2023. Increasing demand for hybrid vehicles in economies with a lack of charging infrastructure is anticipated to propel the segment’s growth. Moreover, automakers such as Toyota, Honda, and others that are focused on developing new-generation hybrid vehicles are likely to create lucrative revenue growth opportunities in the coming years.


Asia Pacific Electric Vehicle (EV) Battery Market Size, 2023 (USD Billion)

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Asia Pacific dominated the global EV battery market share, valued at USD 28.44 billion in 2023 and is expected to retain its position throughout the forecast period. Surging EV sales in China is one of the major drivers of market growth in the region. For instance, according to the International Energy Agency (IEA), in 2023, China witnessed the highest sales of electric vehicles worldwide, reaching 8.4 million units of sales. Therefore, increasing demand for electric vehicle batteries in China to cater to the surging sales is likely to drive market growth in the region. Moreover, China is one of the major parts of the global electric vehicle battery supply chain; therefore, increasing localized manufacturing of battery raw materials, parts, and components in China and other economies across APAC, such as India, Japan, and South Korea, is likely to accelerate the market growth.

Europe held the second-largest market share in 2023. An increasing number of emission control norms and stringent regulations to fight climate change is expected to boost the adoption of electric vehicles in the region, further driving the demand for batteries. For instance, in 2023, Europe witnessed the second-highest number of sales after China. According to the IEA, Europe witnessed 2.6 million units of sales in 2023. Moreover, a favorable regulatory scenario coupled with the offered subsidies, incentives, and tax benefits for the adoption of EVs across European economies is likely to accelerate market growth in the region.

North America held a considerable market share in 2023. Increasing demand for BEVs in the U.S. is driving market growth. The U.S. government is highly focused on reducing its dependency on China for the supply chain. Therefore, rising government investment to accelerate localized component manufacturing and strengthen the EV supply chain is likely to propel market growth in the region.

List of Key Companies in Electric Vehicle (EV) Battery Market

Automakers Focus on Strategic Partnership with EV Battery Makers to Drive the Competition

The market is significantly consolidated and is led by some of the global players operating in the industry. Well-established players, such as Panasonic, BYD, CATL, and LG Energy Solutions, held the largest market share compared to others. To ensure a steady supply of batteries, almost all the leading automakers are focused on establishing strategic partnerships with battery manufacturers, which increases market competition. 

With its Focus on Ramping up its Capacity, Panasonic Group is One of the Leading Players in the Market 

Panasonic is one of the leading automotive battery and electronic product manufacturers based in Japan. The company provides electric vehicle batteries to leading automakers such as Tesla and Toyota. Additionally, it offers a wide range of batteries, including lead acid, lithium ion, nickel metal hydride, nickel cadmium, and others for various applications. The company is significantly investing in setting up manufacturing plants for batteries to ramp up lithium-ion battery production.



  • In January 2024, Panasonic Holdings Corp. announced that it plans to roll out the newest iteration of its electric vehicle battery cells with improved capacity as early as this calendar year. A revamped version of its 2170 cells will begin production at its manufacturing plant in Nevada sometime during 2024 or 2025.

  •  In February 2024, Panasonic Energy signed a seven-year offtake agreement with Nouveau Monde Graphite Inc. (NMG) for the supply of natural graphite. The battery company has also expressed its intent to invest in NMG, starting with an initial investment of $25 million. The partnership is seen as a key development in Panasonic Energy's expansion of its EV battery production in North America.

  • In July 2022, Panasonic selected Kansas City, in the U.S., for the location of its long-awaited U.S. vehicle battery plant. The company plans to invest up to USD 4 billion in its new manufacturing facility. Panasonic stated that the factory would produce a “critical” supply of lithium-ion batteries for automakers as the auto industry undergoes electrification.

  • In July 2022, Samsung SDI announced an investment of USD 11 billion in cylindrical battery lines in Malaysia. This would be the second battery production facility equipped with modern technology for an innovative line of EV batteries. The construction of a new battery manufacturing facility is a strategic decision to address the growing demand for EV batteries.

  • In September 2022, BYD launched its new blade batteries for commercial electric vehicles with a new e-Bus Platform plan to initially debut in Europe. BYD’s Blade Batteries offer a safer and more durable sale pack for its Commercial and Passenger EVs. The company aims to expand its influence in domestic and, especially, foreign markets.


The research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, products, and leading applications of the products. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

An Infographic Representation of Electric Vehicle Battery Market

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Report Scope & Segmentation



Study Period


Base Year


Estimated Year


Forecast Period


Historical Period


Growth Rate

CAGR of 6.4% over 2024 to 2032


Value (USD Billion) & Volume (Thousands of Units)


By Battery Type

  • Lithium-ion

  • Lead Acid

  • Nickel Metal Hydride

  • Others

By Vehicle Type

  • Battery Electric Vehicles (BEVs)

  • Plug-in Hybrid Electric Vehicles (PHEVs)

  • Hybrid Electric Vehicles (HEVs)

By Geography

  • North America (By Battery Type, By Vehicle Type, and By Country)

    • U.S. (By Battery Type and By Vehicle Type)

    • Canada (By Battery Type and By Vehicle Type)

    • Mexico (By Battery Type and By Vehicle Type)

  • Europe (By Battery Type, By Vehicle Type and By Country)

    • U.K. (By Battery Type and By Vehicle Type)

    • France (By Battery Type and By Vehicle Type)

    • Germany (By Battery Type and By Vehicle Type)

    • Rest of the Europe (By Battery Type and By Vehicle Type)

  • Asia Pacific (By Battery Type, By Vehicle Type and By Country)

    • China (By Battery Type and By Vehicle Type)

    • India (By Battery Type and By Vehicle Type)

    • Rest of APAC (By Battery Type and By Vehicle Type)

  • Rest of the World (By Battery Type and By Vehicle Type)

Frequently Asked Questions

Fortune Business Insights says that the market was valued at USD 59.06 billion in 2023 and is projected to reach USD 111.20 billion by 2032.

The market is expected to register a CAGR of 6.4% during the forecast period (2024-2032).

Surging global electric vehicle sales is expected to drive the market growth.

Asia Pacific led the global market in 2023.

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