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Global Li-ion batteries demand projection to 2030

1 August, 2023

Global Li-ion batteries demand projection to 2030

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Global Li-ion batteries demand is closely connected to a variety of social, economical and political factors. In this article we’ll discuss the most important of them, and see the trends and projections up to 2030.

Sources of global Li-ion batteries demand by application

Undeniably, the most common everyday use and one that is very unlikely to shrink anytime soon is the demand for batteries by the growing market of smartphones, laptops, tablets, wearables and other portable electronic devices. According to a study from Statista, by the end of 2021 the global count of operational mobile devices amounted to nearly 15 billion, showing growth from the slightly over 14 billion recorded in the preceding year. Projections indicate that by 2025, the total number of mobile devices is anticipated to surge to 18.22 billion, signifying an additional 4.2 billion devices when compared to the figures from 2020.

Next come electric vehicles (EVs). Although not as common as portable electronic devices, the batteries required for vehicles to operate and provide autonomy that makes purchasing sense to the end consumer are big in size and capacity. It is true that there aren’t as many EV batteries as mobile devices globally, but in terms of battery capacities they share a much bigger chunk of the battery demand pie. As the adoption of electric vehicles increases globally, so will the demand for the batteries that keep them running.

Another big player is the ever expanding application of renewable energy storage systems. Batteries are essential for storing excess energy generated from renewable sources such as solar and wind power. The growing awareness and adoption of eco-friendly and sustainable products is ever increasing in home owners, both as a means to minimise our effect to the environment, as well as to increase independence from the grid. As the number of renewable energy installations increases, the need for energy storage solutions grows as well. Furthermore, due to the high costs involved in electricity production by non-renewable means, the demand for renewables is bound to increase even more, and therefore the demand of batteries to store that energy will follow suit.

The trend of using energy acquired by renewable sources is also increasing in the industrial world. The worldwide energy crisis of 2022 and the significant cost increases that came with it, lead (or rather forced) industries to minimise their reliance to the grid. Those companies who planned ahead (which were mainly the big industrial corporations), invested in renewable energy as either their main or their supplementary source of electricity. And with that, of course, the demand for batteries also increased.

Government policies and geopolitical conditions driving global Li-ion batteries demand

Government regulations and incentives have a significant impact on driving an increase in global batteries demand due to their influence on various aspects of the energy landscape and the electricity market’s dynamics. By promoting clean energy and sustainability and by implementing regulations and offering incentives that encourage the adoption of renewable energy solutions, such as solar and wind power, governments create a need for energy storage solutions.

The promotion of electric vehicles (EVs) also comes into play. Many countries, in their effort to reduce their carbon emissions, offer various incentives to consumers, such as tax rebates, grants, and subsidies, to make EVs more affordable. As electric vehicles rely heavily on batteries for their operations, the increased adoption of EVs leads to a surge in battery demand.

Another reason for governments promoting the use of battery-reliant technologies is the geopolitical and strategic factor. Batteries in the developing world represent commercial – and therefore financial – strength, and countries want to get ahead of any new trends and benefit from them. Many of them offer investment incentives to attract companies, like what the British government did with Tata, the Indian batteries manufacturer with the Jaguar Land Rover EV battery factory in Somerset UK we wrote about recently.

The Russian-Ukranian war has been another factor for an increased batteries demand. The EU countries have relied for many years on energy imports from Russia and, with their energy provision disrupted due to the war they faced severe financial consequences. This forced them to look and invest into renewable energy solutions and therefore energy storage, meaning another increase in batteries demand.

The EU and the US have also significantly increased the GWh of battery production in their respective territories. This was an expected result of the effort to minimise or even completely remove reliance on Asian manufacturers, thus dropping the production cost of EVs. By not importing batteries produced in Asian countries, the EU and the US are saving huge sums of money that can be better spent in research and technological advancements, rather than shipping costs.

We believe the localisation of Li-ion batteries production is going to be a major factor in how the batteries landscape will be changing worldwide. The winners will be these countries that invest in production facilities, factories and research on recycling and reuse, an aspect frequently forgotten but one that may prove immensely beneficial to those who decide to follow it through. Make sure you read our article about the strong indications that recycled batteries work better than new ones.

Global Li-ion batteries demand in figures

A tendency to underestimate projections on global batteries demand seems to be quite prevalent. This happens due to the rapid changes around battery applications in all industries, rendering projections of only a couple of years ago obsolete.

Being the main chemistry used worldwide, Li ion batteries dominate the demand and therefore are the main type of batteries in several research papers across the globe. In January 2023, the Global Battery Alliance in their publication “Battery 2030: Resilient, sustainable, and circular” stated that:

Global demand for Li-ion batteries is expected to soar over the next decade, with the number of GWh required increasing from about 700 GWh in 2022 to around 4.7 TWh by 2030.

In essence, we will be moving from GigaWatts to TerraWatts per hour demand levels in a matter of only 6 years. Their calculation is based on the entire lithium-ion (Li-ion) battery chain, from lithium mining all the way through to recycling, and the numbers are quite impressive:

 

Global Li-ion batteries demand projection - Li ion cell demand

Global Li-ion batteries demand projection – Li ion cell demand – Credit to Global Battery Alliance – globalbattery.org

We can see that consumer electronics have the lion’s share of Li-ion battery demand, something that is to be expected including of course EVs. The figures also icllude commercial vehicles, off road vehicles and even aviation applications. With li-ion batteries’ adoption in aviation being yet at an infantile stage, we can expect that these projections can only suffer the same fate as past ones, becoming obsolete in a couple of years as technology progresses. We also see that the demand is expected to be higher in China (almost as much as Europe and the US combined), which is also to be expected as this is one of the leading tech hubs on the planet and adoption of new technologies is very prompt.