Between 2023 and 2030, the call for batteries global is anticipated to triple to 4,100 gigawatt-hours (GWh) due to the perpetual expansion in sales of electric vehicles (EVs). Accordingly, OEMs need to concentrate more attentively on their battery plans, per a recent Bain & Company analysis.
“For OEMs, batteries represent the single largest expense factor and have an impact on product performance. However, OEM product roadmaps are being impacted by the continuous changes in battery chemistries, particularly in lithium-ion batteries. Global OEMs must make the crucial decisions about which kind of battery to employ and whether to produce batteries internally or in partnership with other businesses,” said Mahadevan Seetharaman, a Bengaluru-based partner at Bain & Company’s Advanced Manufacturing Services practice.
The report highlighted five themes for OEMs to watch for in the 2030 EV battery market:
Lithium-ion batteries will remain dominant for the foreseeable future
The market for EV batteries has been and will be dominated by lithium-ion batteries. Up until 2030, the market share of emerging technologies like solid state and high-density sodium-ion is predicted to remain in the single digits. These technologies are currently in the prototype and pilot manufacturing stages.
NMC and LFP will be the dominant cathode chemistries
Currently, more than 90% of lithium-ion battery sales for electric vehicles (EVs) come from the combination of nickel manganese cobalt (NMC) and lithium-iron phosphate (LFP) chemistries.
Due to the strong demand for mass-market EVs and well-established supply chains in China, as well as the introduction of LFP variants with higher energy densities [such as M3P and lithium manganese iron phosphate (LFMP)], LFP will become increasingly prevalent in the country.
For a variety of factors, LFP will increase in the USA and the EU but will still be smaller than in China. First, compared to China, these countries’ supply chains for iron and phosphorus are noticeably less developed, and domestic manufacturing of LFP is essentially nonexistent. As a result, the cost benefits of LFP over NMC will be outweighed by the expenses associated with importing LFP from China. The negative costs of recycling in comparison to NMC make this worse. Furthermore, a lot of businesses are investigating low- or no-cobalt NMC alternatives [such as high-voltage mid-nickel, high lithium manganese (HLM), and NMx], which would further lessen the cost advantage of LFP. Finally, LFP may not be much suitable for western OEMs seeking to build up more market share due to import tariffs and larger geopolitical challenges.
Lithium-ion technology will continue to decrease in cost and increase in performance
There will be significant changes in cell form factors, pack architecture, anode chemistries, and cathode chemistries in the lithium technology stack. OEMs are closely monitoring a number of innovations, including battery integration through cell-to-chassis technology, in which the battery is integrated into the vehicle’s structure; the dry electrode manufacturing process, which lowers manufacturing costs by consuming less energy; and AI-powered battery management systems, which extend the life of batteries.
Solid state and sodium ion will be the only commercialized emerging technologies by 2030
In comparison to NMC, solid-state batteries offer a substantially higher energy density, as well as enhanced safety, quicker charging, and possibly a longer lifespan. But after several delays, participants have only now been able to show preliminary proofs of concept, and commercialization is probably three to four years away.
Compared to lithium-ion batteries, sodium-ion batteries are expected to be less expensive and offer enhanced safety and lower operating temperatures. Prototypes that offer energy densities comparable to LFP indicate progress on this front, despite the fact that energy density has previously been far lower. Several companies have declared their intention to increase production by 2025, and according to Bain, sodium-ion-based EVs should be available for purchase in the first half of that year.
Demand for recycling will increase
It is anticipated that EV battery recycling will increase dramatically, driven mostly by an increase in feedstock volumes. Recycling will be further encouraged by the growing number of new international legislation pertaining to collection, recycling, and the use of recycled content.
To keep ownership of batteries and handle recycling, battery makers and OEMs are investigating new business models like battery rentals.
