Battery Metals Market Size, Share & Trends Analysis Report By Product (Lithium, Nickel, Cobalt), By Application (EVs, Electronic Devices, Stationary Battery Energy Storage, SLI), By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global battery metals market size was valued at USD 14.8 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 2.4% from 2020 to 2027. The market for battery metals is driven by the growing demand for batteries in the automotive industry and stationary battery energy storage (BES). The global electric vehicles (EVs) industry is growing at an accelerating rate across the globe, which is propelling the market growth, as batteries constitute the most significant portion of EVs. Soon, they will account for a 40.0% share of the total cost in automotive manufacturing.

Global battery production is concentrated in a handful of countries and the U.S. is one among them. Technological advancements coupled with the presence of large players such as Tesla, EnerSys, and Panasonic propel the growth of the market for battery metals in the country. The growing demand from application industries is propelling production capacity. For example, in October 2019, KORE Power announced its plan to build a 10 GWh lithium-ion battery manufacturing plant in the U.S. for producing Mark 1 energy storage system.

The growth of the market for battery metals is expected to be hindered by one drawback associated with batteries, which is their waste. The race to adopt EVs in near future by most countries is boosting automotive manufacturing worldwide. This shall eventually lead to larger battery production and its waste that has toxic effects on the environment. Battery disposal is a major concern and is a negative aspect of the market for battery metals. However, a growing emphasis on second-life EV battery can overcome this disadvantage.

The EV batteries such as lithium-ion are designed for life for a decade but tend to degrade in the first five years owing to extreme operating temperatures, changing discharge rates, and hundreds of partial cycles per annum. Such batteries instead of being disposed of can be recycled or re-used. Over a period of time, if these batteries do not meet the eligibility criteria to be used in EVs, they can still have a second life and can be used in less demanding applications such as stationary storage services. This makes stationary storage devices another key driver for the market for battery metals.

Despite all efforts to overcome every disadvantage in past and in the future as well, market growth was hit in 2020 because of the coronavirus pandemic. The pandemic affected the battery production, and usage of metals, and even impacted the supplies considering the transportation restrictions. The pandemic caused fluctuation in the prices of battery metals. Prices of nickel, zinc, and copper dropped in 2020 as they are in surplus owing to low consumption.

On the other hand, prices of lithium and cobalt witnessed an increase in February 2020 because of low production, a rise in logistics cost during the lockdown, and sufficient inventory owing to oversupply in 2019. However, prices for lithium and cobalt shall witness a declining trend across the forecast period on account of the high demand for lithium-ion batteries and reducing the usage of cobalt.

Application Insights

Starter, lighting, and ignition (SLI) accounted for the largest revenue share of more than 27.0% in 2019. SLI has been the key application area in the market for battery metals for many years. SLI battery is used in conventional vehicles for starting and igniting the engine and provides electricity to the car. It is essential owing to its power density, as starting an engine requires large currents for short periods, around 300 amperes for a few seconds. Considering the impact on the environment and other disadvantages, this application segment is expected to witness least growth rate across the forecast period, owing to declining demand for conventional vehicles, which are being replaced by electric vehicles.

This makes the electric vehicles segment the fastest-growing application segment of the market for battery metals. The EVs can be categorized into four groups; hybrid, plug-in hybrid, full EVs, and commercial. Each group has a distinct set of requirements, such as full EVs do not have internal combustion engines, and hence, they need very large batteries. Key batteries used in EVs are lithium-ion and nickel-metal hydride.

Stationary battery energy storage is another application segment, which is expected to witness a rapid growth rate in the battery metals market across the forecast period. The significance of stationary battery energy storage is owing to its ability that smoothens the supply-demand for power generated from renewable energy sources such as wind and solar. It stores electricity from renewable sources for use in absence of wind and solar rays. Increasing capacity for renewable energy sources is propelling the demand and production for BES, which provides ease in consumption without relying on fossil fuel power plants. Lithium polymer batteries are majorly used for stationary battery energy storage.

Product Insights

Lithium accounted for the largest share of more than 30.0% in 2019, in terms of volume in the market for battery metals. Increasing demand for lithium-ion batteries from the EV industry and consumer electronics is anticipated to drive demand for battery metals over the forecast period. Growing demand for lithium-ion cells has propelled manufacturers to expand their production capacities. Companies such as LG Chem, BYD, NorthVolt, and CATL are engaged in the manufacturing of lithium-ion cell plant projects with an annual capacity of 70, 60, 32, and 24 GWh respectively. The projects are expected to reach completion by 2021.

Nickel is expected to witness the fastest growth in the market for battery metals during the forecast period, considering its high demand for EV batteries. For instance, in May 2019, nickel quantity deployed in the world increased by 57.0% from May 2018 owing to a rise in EV sales and rapid adoption of nickel cathode chemistries like NCM 622, 523, and 811. Nickel’s consumption in nickel-cadmium and nickel-metal hydride batteries has been prevalent since the 1980s. A major driver for nickel in batteries is its capability of delivering higher density and more storage capacity at a low cost.

Cobalt held the second-largest volume share in 2019 in the market for battery metals. It is used in cathodes of lithium-ion batteries as it offers high conductivity and stable structural ability across the charge cycles. However, the metal is anticipated to witness the least CAGR during the forecast period on account of its high cost, which is propelling manufacturers to opt for its alternatives. For example, in March 2020, General Motors announced its plan to reduce the usage of cobalt in its new battery systems by 70.0% and compensate by adding aluminum and increasing nickel content. This step intends at lowering the overall production cost as in 2019, cobalt was around 3 times and 22 times more expensive than nickel and aluminum respectively.

Regional Insights

Asia Pacific dominated the market and accounted for a revenue share of 87.7% in 2019. This trend is expected to continue over the forecast period. This share is attributable to China as it is the largest battery manufacturer in the world. The manufacturing capacity of China is owing to its dominance over the supply chain. It holds a share of more than 20.0% in supplying battery metals to the world and also has the largest chemical production capacity of battery-grade raw materials, which is around 80.0% of the world. Considering its dominance, it is the main driver for the future global automotive industry, post the Covid-19 pandemic.

In terms of revenue, North America was the second-largest regional segment accounting for a share of more than 7.0% in 2019 in the market for battery metals. The U.S. is the major battery producer in the region, which makes it the key consumer of metals in North America. Growing demand from the EV sector is propelling production capacity in the country. For example, SK Innovation has a 9.8 GWh plant in Georgia that is expected to become operational in 2022. With the increasing demand, the company announced in 2019 its plan to build a second plant with a 10 GWh capacity.

Europe accounts for a meager share of the global battery production capacity, as a result, it has a lot of potential in terms of growth. Manufacturers across the world are investing in Europe for setting up plants in the region, which is augmented by growing demand from the EV industry. For example, in October 2019, Webasto began production of batteries for EVs in Germany at the Schierling plant in Regensburg. The company has made an investment of €11 million and anticipates starting production of standard battery systems for commercial vehicles as well.

In addition, several manufacturers in Asia are investing in Europe to set up plants. Companies such as Ningde, Inzi Controls, LG Chem, Samsung SDI, and SK Innovation have plans to expand operations in Europe during the forecast period. For example, Svolt Energy Technology has plans to set up a European base of 24 GWh annual production capacity by 2025.

Key Companies & Market Share Insights

The market for battery metals is competitive in nature owing to the presence of major manufacturers in the industry. With an aim to expand company market share, the manufacturers are adopting various strategies such as capacity expansion and mergers and acquisitions, which shall aid in expanding target footprints. The growth of the battery market is inviting investment companies to invest and acquire stakes in companies that are part of the market’s value chain.

In October 2019, Pala Investments Limited acquired 100.0% of Cobalt 27 Capital Corp. Pala Investments Limited invests across all raw materials and associated businesses that carry significance in building sustainable value chains including extraction, processing, logistics, recycling, and technology. Cobalt 27 Corp, a minerals company is a key raw material provider for EV and battery storage markets as it owns more than 2,160 tons of physical cobalt and manages 6 cobalt royalties. Some of the prominent players in the battery metals market include:

• Albemarle

• China Molybdenum Co., Ltd.

• Ganfeng Lithium Co. Ltd.

• Glencore

• Sumitomo Metal Mining

• Umicore

• Vale

Battery Metals Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global battery metals market report on the basis of application, product, and region:

• Application Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Starter, lighting, and ignition (SLI)

  • Electric vehicles (EVs)

  • Electronic devices

  • Stationary battery energy storage (BES)

  • Others

• Product Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Lithium

  • Cobalt

  • Nickel

  • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

  • Europe

    • Germany

  • Asia Pacific

    • China

    • Japan

    • South Korea

  • Central & South America

  • Middle East & Africa