Battery Materials Market Poised to Witness High Growth Owing to Rising Demand for Electric Vehicles


The battery materials market includes various materials such as cathode materials, anode materials, electrolytes, separators, and others that are used in the manufacturing of batteries. Cathode materials are primarily used in lithium-ion batteries. These materials include lithium cobalt oxide, lithium nickel-manganese-cobalt oxide, lithium manganese oxide, lithium iron phosphate, and others. Anode materials comprise graphite, lithium titanate, silicon, and more. Battery materials provide high power and energy density to batteries, thus enabling them to store higher energy. Advancements in battery technologies have increased the range of electric vehicles and energy storage options.

The global battery materials market is estimated to be valued at US$ 50.6 Bn in 2024 and is expected to exhibit a CAGR of 6.0% over the forecast period 2023 to 2030.

Key Takeaways

Key players operating in the battery materials market are Albemarle, China Molybdenum Co. Ltd., Gan feng Lithium Co., Ltd., Glencore PLC, Livent Corporation, Norlisk Nickel, Sheritt International Corporation, SQM S.A., Targray Technology International Inc., Teck Resources, Tianqi Lithium, and Vale S.A. Some of the key players are focusing on strategic collaborations to increase their production capacities of battery materials and ensure security of supply. For instance, in 2022, Albemarle partnered with Mineral Resources Limited to jointly develop a nickel-cobalt extraction plant in Western Australia.

The growing demand for electric vehicles and energy storage solutions has opened opportunities for battery materials manufacturers across geographies. Major automakers are actively working towards increasing electric vehicle production targets over the coming years. Additionally, many countries are providing subsidies on electric vehicles to reduce dependence on fossil fuels. These favorable policies are creating a conducive environment for the battery materials market.

Key players are expanding their global footprint to capitalize on opportunities in foreign markets. For example, China Molybdenum has entered into an offtake agreement with an American lithium project for supply of battery-grade lithium carbonate.Ganfeng Lithium has established production bases across China, Argentina, and Mexico to serve the increasing lithium demand. The global expansion strategies are allowing suppliers to serve diverse applications of lithium-ion battery materials worldwide.

Market Drivers
Stringent emission norms enforced by governments worldwide has resulted in automakers rapidly electrifying their fleets. As electric vehicles require lithium-ion batteries to power their mobility, it is significantly driving the demand for battery materials such as lithium, cobalt, graphite, and nickel. For instance, lithium is the primary material used in lithium-ion cathodes facilitating the high energy density of these batteries.

Market Restraints
Volatility in prices of battery raw materials is a key challenge faced by manufacturers. For example, over the past year, lithium prices have risen by over 150% due to supply constraints relative to the growing demand.Similarly, geopolitical risks surrounding battery materials sourcing can limit supply. For instance, about 70% of the world’s lithium reserves are found in South America, chiefly in Chile and Argentina. Supply disruptions from these regions impact production costs and scheduling for battery end users.


Segment Analysis

The battery materials market is dominated by the lithium-ion battery segment. Lithium-ion batteries are increasingly being adopted across applications like consumer electronics, electric vehicles, grid storage etc owing to their high energy density and longer life cycles compared to other battery technologies. Within lithium-ion batteries, the cathode materials sub-segment accounts for over 40% share primarily due to rising demand for lithium cobalt oxide and lithium iron phosphate based cathode materials from lithium-ion battery manufacturers.

Global Analysis

The Asia Pacific region accounts for the largest share in the global battery materials market currently. Countries like China, Japan and South Korea have established themselves as major battery materials producers as well as battery manufacturers serving the huge domestic demand from industries like consumer electronics and electric vehicles. Moreover, presence of key battery materials producers and low manufacturing costs make Asia Pacific an attractive market. The region's market is projected to continue its dominance during the forecast period with China expected to remain the factory of the world for batteries and battery materials. Europe and North America are expected to witness higher growth rates led by the electric vehicle revolution in these regions and efforts to develop regional supply chains of battery materials.

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