According to estimates, the lithium-ion battery market will reach a total size of $24 billion by the year 2023. This is because total demand for these batteries is increasing across many different industries. Aircraft, automobiles, and even children’s toys are joining technologies like laptops and cameras for a piece of this overall market. Because it is also a renewable energy source, the environmental segment is attracted to this product as well.
When this is all combined with regulatory pushes by governments at every level, it is easy to see how the market size will expand to such a size by 2023. Emissions standards are another consideration that will drive sales. What else do we know about the current and future lithium-ion battery market size?
1. Technology Keeps Improving
One of the benefits that the lithium-ion battery market is enjoying is the fact that technology keeps improving to make the batteries better. People are able to get a full day’s use out of their tablets. Smartphones can have heavy data use and still have 2-3 days of use on a single charge. Research and development is also making the more powerful batteries come in smaller sizes, allowing for smaller and more efficient technologies to develop around this power source.
2. The Automotive Industry Loves the Battery
The lead acid batteries that have been in vehicles for decades still work just fine, but they are an inefficient energy source when it comes to a hybrid or 100% electric vehicle. Lithium-ion batteries store more juice and charge up faster, making it possible to have vehicles that are virtually fossil-fuel free [the power used to charge the vehicle might come from coal, for example]. In the next decade, the demand for automotive applications is expected to double, which means the market demand is going to increased globally as this hybrid technology is adopted.
3. Renewable Energy Storage is a #1 Priority
Consumers are becoming more conscious about the power they are consuming every day. Although fossil fuels aren’t scheduled to run out any time soon, the emphasis on creating natural power reserves has become a point of emphasis. Lithium-ion batteries are the perfect method of creating a grid that is based on renewable energy sources because the delivery is consistent and the power stores for long periods of time. Some standby times for smartphones today, for example, are reaching up to 1,000 hours.
4. Reduced Pricing Will Create More Demand
Lithium-ion batteries are pretty inexpensive today, but as the technology develops more and manufacturing becomes more efficient, the prices will go down. In the next decade, the consumer portion of the industry is expected to be halved, but not because there will be less use of these batteries. It’s because more people will be using less expensive batteries. We’re already starting to see this in the lithium-ion battery market size with the alkaline replacement batteries in the AAA or AA size. With over 1,500 recharges, consumers can pick up a set of batteries today for less than $10 in many markets. That’s the same price as most traditional batteries.
5. Technology Consolidation Could Become a Factor
Another reason why the market size for consumers may be smaller in the future is the fact that technology is beginning to consolidate. Even 10 years ago, the average consumer had to purchase an independent MP3 player, their own digital camera, and a cell phone that had limited data connections. Today all of that can be put into a solitary mobile device, eliminating the need for 2 lithium-ion batteries.
What will technology consolidation look like in the future? We’re already seeing tablets consolidate into fully functional laptops that also become mobile phones. That’s two more batteries that may not be needed in the next decade.
6. Pricing Could Also Hold Back Market Size
The pricing of lithium-ion technology on larger scale applications is actually holding technology development back right now. Only the wealthy class is able to afford the pricing that is in the high end applications, like a 100% electric vehicle fueled by these batteries. Pricing reductions on vehicles and tighter profit margins could encourage a higher market share, but that isn’t a guarantee. All one has to do is look at the tariffs that were placed on import vehicles in the US market to see that pricing structures tend to continue rising instead of falling.
Technology has been the one exception to this rule, however, so there is hope for a stronger lithium-ion market size. A 40 inch LED television, for example, can be purchased today for under $300. A decade ago, a standard tube television couldn’t even be purchased for that price unless it was under 30 inches in size. It all depends on the research and development in this field. Strong research that makes the manufacturing process more efficient will make or break the growth estimates.
7. It Will Be a Global Point of Emphasis
The North America market for lithium-ion batteries currently makes up about one-third of total sales. The Asia-Pacific market, however, makes up more than 40% of the market and the growth in this geographical area is phenomenal. Mobile device manufacturers have been starting up every year and are producing affordable technology for the urban consumers that have seen some remarkable gains in their income and status over the past few years.
Europe and the rest of the world will likely stay stable. This means that the true market size for lithium-ion batteries will depend on the continuing development of the current APAC start-ups and the R&D that’s happening in North America. The one sector for growth in Europe: sustainable energy.
The future of the lithium-ion battery market size has a lot of factors that depend on consumer behavioral patterns, government regulations, and technology advancement. It’s a market that is currently worth over $11 billion. Will it double in size by 2023? It looks very possible that this could happen if these factors are met.