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Secondary Battery Market Evolution

GOOVER DAILY REPORT September 26, 2024
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TABLE OF CONTENTS

  1. Summary
  2. Market Growth Projections
  3. Drivers of Growth
  4. Market Challenges
  5. Technological Innovations
  6. Conclusion

1. Summary

  • This report delves into the growth dynamics and current state of the secondary battery market, providing an optimistic forecast up to 2035. It explores the key drivers behind market growth, including the adoption of electric vehicles (EVs), integration of renewable energy, technological advancements, and environmental considerations. Specifically, the market is projected to grow significantly, with major segments like lithium-ion batteries leading the charge due to their efficiency and high energy density. However, challenges such as the environmental impact of battery production and regulatory pressures on waste handling are also highlighted. The report offers a comprehensive analysis pulled from various sources to present a clear view of the market's future trajectory and challenges.

2. Market Growth Projections

  • 2-1. Growth rate and market size expectations from 2023 to 2028

  • The secondary battery market is expected to grow by USD 91.79 billion during the period from 2023 to 2028, with a compound annual growth rate (CAGR) of 13.7%. The growth is driven by factors such as the decline in lithium-ion battery costs, advancements in battery chemistry, and an increased focus on renewable power generation. This positive outlook is substantiated by current market trends that emphasize the development of advanced lead-based secondary batteries and revisions in battery standards.

  • 2-2. Long-term projections up to 2035

  • By 2034, the total size of the battery market is expected to reach USD 680.85 billion. This projection includes various segments such as high voltage batteries, which are anticipated to grow at a CAGR of 31.99% from 2024 to 2033, resulting in a market value of approximately USD 387 billion by 2033. Other segments, like the sodium-ion battery market, are also predicted to exhibit considerable growth, jumping from USD 0.86 billion in 2022 to around USD 4.8 billion by 2032, with a CAGR of 19.3%. The traction battery market is similarly positioned to grow from USD 50.28 billion in 2022 to an estimated USD 339.94 billion by 2032, reflecting a CAGR of 21%.

3. Drivers of Growth

  • 3-1. Electric Vehicle Adoption

  • The adoption of electric vehicles (EVs) is significantly driving the growth of the secondary battery market. According to research, the EV market is anticipated to exceed 725 billion USD by 2026, fueled by a compound annual growth rate of over 27%. The increasing demand for lithium-ion batteries, particularly in the EV industry, correlates with their rising market share over the past two decades. Stability in battery technology and improvements in energy density play crucial roles in this trend.

  • 3-2. Renewable Energy Integration

  • There is an increasing focus on renewable energy sources, which is expected to propel the growth of the secondary battery market. Renewable energy, generated from natural sources like sunlight and wind, requires efficient energy storage solutions to meet rising demand. This need has led to advancements in secondary batteries, which provide reliable storage and reduce reliance on fossil fuels. Reports indicate a significant expansion of renewable electricity generation, anticipated to grow over 8% to reach 8,300 TWh in 2021, further supporting this growth.

  • 3-3. Technological Advancements

  • Technological advancements in battery chemistry and production processes play a pivotal role in the growth of the secondary battery market. Innovations such as solid-state batteries, which offer higher energy densities and faster charging times, enhance the performance of batteries significantly. The overall battery market value has seen substantial growth, with the high voltage battery market, for example, expected to rise from 24.1 billion USD in 2023 to around 387 billion USD by 2033 at a CAGR of 31.99%.

  • 3-4. Environmental Considerations

  • Environmental considerations are increasingly influencing the secondary battery market, particularly in the context of battery recycling. With a market valued at close to 120.5 billion USD in 2020, the focus on reducing the environmental impact of battery production and disposal is essential. The rise in electric vehicle usage necessitates effective recycling frameworks to manage lithium-ion batteries' environmental footprint. Major companies in the sector are actively developing strategies to address these environmental challenges.

4. Market Challenges

  • 4-1. Environmental impact of battery production

  • The environmental impact of battery production is a significant challenge for the secondary battery market. It includes emissions, resource depletion, and waste generation associated with the manufacturing process. This issue is highlighted by various documents that address the pressing need to mitigate effects that arise from battery disposal and production processes.

  • 4-2. Regulatory pressures on battery waste handling

  • Regulatory pressures concerning battery waste handling have increased due to growing environmental concerns. These regulations aim to ensure proper disposal and recycling practices in the industry. The focus on creating stricter standards and guidelines underscores the necessity for sustainable practices within the secondary battery market, which is vital for reconciling environmental impacts with market growth dynamics.

5. Technological Innovations

  • 5-1. Advancements in battery chemistry

  • The current battery market has experienced significant advancements in battery chemistry. The growth and appeal of battery technologies, including lithium-ion, sodium-ion, and advanced lead-acid batteries, underscore the innovative strides made. These technological advancements aim to enhance battery performance, addressing issues such as range limitations and charging time. Continued focus on battery chemistry innovation plays a critical role in meeting the demands of modern appliances and electric vehicles.

  • 5-2. Solid-state batteries

  • Solid-state batteries have emerged as a promising innovation within the battery market. Characterized by a solid electrolyte component, solid-state batteries are recognized for their higher power density, faster charging times, and enhanced safety features. These attributes position solid-state batteries as a key area of development and investment, reflecting the industry's shift towards more efficient and safer battery solutions.

  • 5-3. Second-life battery usage

  • The market for second-life batteries has increasingly gained attention due to its potential in mitigating environmental impacts associated with battery disposal. The second-life usage of electric vehicle (EV) batteries provides opportunities for applications such as grid connections, renewable energy storage, and power backup. As of 2024, the power backup segment is anticipated to capture a significant market share of 55%, driven by the growing need for power backup solutions in residential and commercial settings. The commercial use segment is expected to dominate the market with a projected share of 51% in the same period.

6. Conclusion

  • The secondary battery market is set for substantial growth underpinned by factors such as electric vehicle adoption, renewable energy integration, and continuous technological innovations, particularly in lithium-ion battery technology. The widespread use of EVs and renewable energy projects demands efficient and reliable energy storage solutions, positioning lithium-ion batteries at the forefront. Additionally, concerns regarding environmental impacts and regulatory pressures emphasize the importance of sustainable practices like battery recycling. The advancements in battery chemistries, including solid-state and second-life batteries, will likely drive further innovations, expanding the market significantly. Future prospects highlight the need for ongoing technological improvements and harmonizing environmental and regulatory policies to ensure balanced growth and sustainability in the secondary battery sector.

7. Glossary

  • 7-1. Electric Vehicle (EV) [Technology]

  • Electric vehicles play a crucial role in the demand hike for secondary batteries, particularly lithium-ion variants. The EV sector's rapid growth and reliance on these batteries signify their importance in the secondary battery market.

  • 7-2. Lithium-ion Battery [Technology]

  • Lithium-ion batteries are essential to the secondary battery market, offering higher energy density and efficiency for various applications. Their continued development and integration into EVs and renewable energy systems underscore their prominence.

  • 7-3. Renewable Energy [Industry]

  • The integration of renewable energy sources, such as solar and wind, has driven the need for efficient secondary batteries to store energy. This trend is significant for the market's growth and sustainability efforts.

  • 7-4. Battery Recycling [Process]

  • Battery recycling efforts are crucial to addressing environmental concerns related to battery disposal. The growth in this sector ensures sustainable practices and the extended lifecycle of batteries.

8. Source Documents