During 2018–2019, global electric car sales witnessed a massive 40% increase, to reach 2.1 million. This took the total number of such new-energy vehicles in operation around the world to 7.2 million. These observations made in the Global EV Outlook 2020 report of the International Energy Agency (IEA) clearly suggest that the earth is witnessing the electric vehicle (EV) revolution. Fueled by the widespread awareness on the degradation of the environment due to the greenhouse gases (GHG) released from conventional vehicles and the government support for cleaner alternatives, EV adoption is picking pace.
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Considering this, P&S Intelligence says that the automotive lithium-ion battery market value will surge from $24.2 billion in 2018 to $74.3 billion by 2024, at a healthy 15.9% CAGR during the forecast period (2019–2024). However, as EVs are expensive, government support will continue to be necessary to boost their sales. For instance, China has been offering incentives of $4,390 on the purchase of EVs with a driving range of over 400 km on a single charge. Similarly, under phase II of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India) scheme, the Indian government is pumping INR 10,000 crore in its EV sector.
One of the prominent trends presently being witnessed in the automotive lithium-ion battery market is the rising incorporation of lithium nickel manganese cobalt oxide (NMC) batteries in electric vehicles across the globe. This is primarily attributed to the ability of the NMC batteries to provide high energy density and the rising requirement of vehicles having high ranges throughout the world. In addition to this, the declining prices of the NMC batteries, their lesser space requirements, and lighter weights are further boosting their sales across the world.
During the historical period (2014–2018), the Asia-Pacific (APAC) region dominated the automotive lithium-ion battery market because China and India are two of the largest EV markets in the world. Of the 7.2 million electric cars that were in operation globally in 2019, as per the IEA, 47% were in China alone. In addition, China and India account for the majority of the electric two- and three-wheeler (electric rickshaw) sales. During the forecast period, the market is expected to witness the fastest growth in Europe, which is hoping to become self-reliant in EV technology, therefore promoting domestic battery production.
Hence, with government initiatives to encourage the masses to switch to alternative-fuel vehicles, automakers will continue to generate an increasing demand for Li-ion batteries.