Market Outlook: The Decade Driven by Batteries

We are embracing a decade driven by batteries.

?According to BloombergNEF's (BNEF) 2022 Long-term Electric Vehicle Outlook Report , between 2020 and 2030, the lithium-ion battery market for mainstream applications will expand by 12 times. That is to say, by 2030, demand for battery capacity will exceed 3,400 GWh and the share of automotive batteries in the overall lithium-ion battery market will rise from 60% to 90%.

The increasing demand for automotive battery is driven by the global consensus on the net-zero target. According to the IEA, to reach net-zero emissions by 2050, new internal combustion engine (ICE) passenger cars sales must be banned by 2035. Globally, transportation regulators and industries are racing to fight extreme weather and climate change, making policy and market two key driving forces for the development of EV batteries.

???Governments’ carbon-neutrality roadmap

Major automotive markets have announced timelines for the ban on ICE car sales and incentive policies for EV adoption. The EU has confirmed ICE ban by 2035. The US has set the goal for 50% of new car sales to be electric by 2030, and China is targeting 40% EVs by 2030. An early starter, Norway’s national goal is that all new cars sold will be zero-emission by 2025.

?To reach these goals, governments have incentive policies in place to promote EV sales, including purchase subsidies and various tax credits and exemptions. Improved EV-charging infrastructure and increased local manufacturing will also help ensure a smooth transition to an electrified future for consumers.

???Market growth for EVs

Thanks to market growth and policy support, global EV sales have continued their strong growth against the global pandemic and economic headwinds. According to BNEF, the number of EVs on the road will grow from 16 million in 2021 to 229 million in 2030. On the supply side, world-leading automakers are also making a significant impact by building fully-electric lineups. Luxury car brand Mercedes-Benz is phasing out its fuel cars and go all-electric by 2030. Ambitious new players are also joining the race. Vietnamese EV startup Vinfast has announced that it will stop making ICE cars by the end of 2022 and become an electric-only automaker. Traditional and new car brands are reshaping the landscape of EV market, which means consumers will have a greater variety of options.

?Aside from carmakers, a new supply chain is also being formed to supports their ambitions. The industry is constantly making breakthroughs in core technologies, namely, the battery, motor, and electric control systems. These breakthroughs lead to enhanced vehicle performance and driving experience, which translates to higher consumer interest.

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??Next-gen battery, the key to wider adoption

According to the IEA, transportation has the highest dependency on fossil fuels of any sector and accounts for 37% of CO2 emissions from end‐use sectors. As impacts of climate change worsen, the shift towards electrified transportation is now a matter of great urgency. With more supportive policies and better market environment, the key factor now is the performance of EVs.

Fire risks and range anxiety are intrinsic to traditional lithium-ion batteries. These issues are still barriers to EV adoption for many consumers. The industry has thus pivoted to the search for next-generation batteries with higher safety and greater performance potential.

?As an advocate for the industrialization of next-generation batteries, ProLogium aims to support car OEMs in their efforts to make EVs on par with petrol cars in aspects of safety, driving range, and cost. To this end, ProLogium is committed to expanding next-gen battery production and introducing mass-produced vehicles powered by next-generation batteries at the soonest. ProLogium also collaborates with partners to accelerate the transition to net-zero.