With the increasing concerns raised over the environmental impact of conventional vehicles, governments worldwide are encouraging the adoption of vehicles using alternative sources of fuel, which has triggered the electric vehicles (EVs) market, eventually proving to be a massive windfall for Lithium production.
The recent report from MarketsAndMarkets states that EVs gain preference for clean public transport across countries. In addition, financial incentives given by governments of several countries encourage the adoption of EVs, thereby fuelling the requirements for EV batteries.
This lead to exponential growth for EVs across geographies catalysed by major automobile manufacturers entering the EV space. Several major vehicle manufacturers, including Toyota, Tata Motors, Mercedes-Benz, and Hyundai, are working on EV models to expand their position in the automotive industry. With major automakers taking an interest in the EV space, developments in electric vehicles are expected to increase in the near future.
MarketsAndMarkets' report said the global EV battery market is projected to grow at a CAGR of 25.3% from $ 27.3 billion in 2021 to $ 67.2 billion by 2025. Increasing demand of EVs, improvement in battery technology, supporting government policies and regulations, and launch of new plug-in EV models are factors responsible to drive the EV battery market, the report pointed out.
Lithium-ion batteries are the most common battery type used in modern electric vehicles. These batteries have higher energy density compared to lead-acid or nickel-metal hydride batteries. Their compact size makes them preferable in the automotive industry. Alternatives such as advanced batteries and supercapacitors cannot easily replace lithium-ion batteries due to their performance, cost, weight, and size, the report said. 'Europe is estimated to account for a share of 31.0% of the global EV battery market, by volume, in 2021 and is projected to grow at a CAGR of 35.3% during the forecast period. Major automakers/OEMs entering the EV market are partnering with major EV battery companies to take advantage of the rapidly growing market,' the report said.
Courtesy: MarketsAndMarkets.
Photo is representational. Courtesy: Volvo.