According to a recent report by Yole Developpement, the market for lithium-ion battery packs for both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) is set to grow exponentially in the coming years. By 2028, the market is projected to reach an impressive $180 billion, with a Compound Annual Growth Rate (CAGR) of 16.9% from 2022-2028.
The battery cell supply chain is largely led by Asian players, with China accounting for 57% of the market share, followed by South Korea at 25% and Japan at 7%. This dominance is due in part to the strong presence of electric vehicle (EV) manufacturers in these countries, who are driving demand for lithium-ion battery packs as they strive to meet carbon emissions targets and take advantage of government incentives for the production of zero-emission vehicles.
The growing demand for lithium-ion battery packs is set to be significant, with the total annual demand projected to surge from approximately 430 GWh in 2022 to roughly 1,500 GWh by 2028, representing a more than threefold increase in demand. This increase in demand is anticipated to be driven primarily by BEV applications, which are expected to require a battery capacity of 1,370 GWh, constituting 90% of the total market in terms of GWh by 2028.
Overall, the outlook for the market of lithium-ion battery packs for BEVs and PHEVs is extremely positive. The market is projected to grow at an impressive rate over the next few years, with significant contributions from the major players in the Asian supply chain. The increasing demand for BEVs, coupled with government incentives and a growing awareness of the need to reduce carbon emissions, is expected to continue fueling the growth of this dynamic market.
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