As more and more people are becoming aware regarding the negative impact of petroleum and diesel-based vehicles on the environment, the adoption of electric vehicles (EV) is rising. In addition, governments of different countries are playing a significant role when it comes to encouraging the adoption of electric vehicles by offering tax rebates, subsidies and grants, and other such financial benefits to people who purchase electric vehicles. In 2019, 3,269,671 units of electric vehicles were sold, and the number is predicted to reach up to 26,951,318 units by 2030. The market for electric vehicles is expected to grow at a 21.1% CAGR during 2019–2030.
The hybrid and electric vehicle battery market is predicted to grow a significant pace in the years to come. The two major types of batteries which are used in EVs are nickel-metal hydride (NiMH) and lithium-ion (Li-ion). The larger demand in the coming years is predicted to be created for Li-ion batteries, which is majorly attributed to the lesser weight, greater energy density, and declining prices of these batteries. Furthermore, the shift toward lithium-nickel-manganese-cobalt oxide batteries is also rising because of the growing demand for electric passenger cars which can be driven for longer distance on a single charge.
When geographic scenario is taken into consideration, the Asia-Pacific (APAC) region is projected to emerge as the largest hybrid and electric vehicle battery market in the near future instead of North America. This is particularly ascribed to the presence of a large number of battery producers in Japan, China, and South Korea, thereby resulting in the low prices of batteries in APAC as compared to other regions. In addition to this, the availability of essential raw materials, including cobalt and lithium, in the region is also positively affecting the domain.
Hence, the demand for electric vehicle batteries is rising because of the technological advancements in Li-ion batteries and growing adoption of EVs.