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In 2030, almost every second car sold will be a battery electric vehicle (BEV). This will lead to a significant demand increase of global battery by 35%. Market growth is driven by both increased BEV sales and increasing battery size per BEV. In consequence, the demand for the most relevant active materials, especially lithium, nickel and graphite will grow steadily. We expect an increase from 400,000 up to 6,000,000 tons until 2030.
Processing and subsequent value chain steps are currently dominated by China. However, there is enormous potential for European players. While Europe currently comprises round about 28% of EV production, its local production accounts for less than 10% of global battery cell production, less than 1% of global active material (graphite, nickel, lithium, manganese and cobalt) production and only around 1% of global active material processing. Regarding the current geopolitics, a stronger European footprint in the battery production market is not only an opportunity but more a requirement to successfully manage the transformation of the car industry. Our study presents key implications throughout global value and supply chains to become a future-driven player in the fast-growing battery production market.
Global Battery Demand Forecast in GWh
LFP
NMC
Fueled by the EV diffusion, we expect a significant demand increase for automotive batteries by ~35% CAGRv to 3.6 TWh from 2022 to 2030. The market growth is driven by both increased BEV sales share and increasing battery size per BEV.
Global active material demand ram-up in million tons
Lithium
Manganese
Cobalt
Nickel
Graphite
The electrification not only increases the global demand for battery cells, but also for multiple key cell raw materials. We expect the global market for active materials to grow by a factor of 15 from 2021 to 2030 while graphite and nickel but also lithium, manganese and cobalt are the most relevant drivers.
How European players can maximize the potential of the fast-growing battery production market
The booming market of BEV will lead to an increasing demand of battery cells and active raw material, presenting enormous opportunities throughout global value and supply chains for global players. The battery supply chain has yet a strong Chinese footprint with ~80% global battery cell and component production.
However, we see the potential for EU and US providing ~40% of EV demand and expect a future localized battery supply chain to have a rebalanced global footprint. Compared with today, active material processing has to grow by a factor of 15 and be re-balance towards demand in regions. While currently no localized EU active material processing focuses on lithium, nickel and graphite, we recommend to pay special focus on these in the future. To catch up with front-runner China our study provides further key take-aways and implications for the US and EU regarding the battery market growth in general, supply chain and business scale-up.
Christian Schnell and Lorenz Kehrbein also contributed to this report.
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