Demand for Lithium-Ion Batteries Expected to Double by 2024
【Summary】The rise in global EV production has created an increased need for lithium-ion batteries, and the rare materials used inside. Soon, demand may outweigh supply.
The first hybrid-electric vehicles used nickel metal hydride batteries. Now, everything from plug-ins to full-electrics get their juice from lithium-ion packs. According to data collected by Transparency Market Research, demand for these sought-after storage devices is expected to increase by more than 50% by 2024.
The growing need for lithium-ion batteries
In 2015, the global lithium-ion battery market was valued at 29.68 Billion. That number is expected to reach USD 77.42 Billion by 2024, while growing at a CAGR of 11.6%.
Lithium-ion batteries aren't just desirable for automotive use. They're also found in consumer electronics, grid energy, and industrial utilities. Currently, smartphones are the leading application (consumer electronics gobble up 50%). But that may soon change with the proliferation of EVs.
Alternate battery options have been tried, but so far, lithium-ion has dominated due to its compact size and ability to hold a large charge. Plus, it's rechargeable and recyclable, which has made it desirable in vehicle applications.
Because of environmental concerns, government agencies are pushing for the development and acceptance of EVs, making the need for lithium-ion power even greater. Right now, demand is outweighing supply, leading to increased prices.
"The battery industry is expanding capacity to meet the forecast EV demand, which is being mirrored by converters' capacity. The level of investment in the raw material part of the chain (hard rock mines and brines) is accelerating, but needs to accelerate faster," said David Whitten, Head of Global Natural Resources and a Fund Manager at Janus Henderson Investors.
Demand for cobalt increases as well
Since lithium-ion batteries are in need, cobalt is also. The element is a key ingredient in modern electric vehicle batteries, and as such, is expected to grow by 40% in 2018.
Some experts believe an extreme cobalt shortage is on the way. Africa is the central location for the material, and many companies have already laid claim to the resources there. Plus, the cobalt-rich African country of DRC is in a continuous state of political turmoil.
To maintain a steady source of cobalt, manufacturers and supplies will need to find a new reserve. Canada and Idaho are a couple of potential hot spots in North America.
Many agree that, If the proliferation of EVs is to continue, either the lithium-ion battery supply-chain must change, or new technology will need to be developed.
Source: Financial Buzz
Mia is an ASE Certified Master Automobile Technician, L1, L2 and L3 Advanced Level Specialist. She has over 12 years of experience in the automotive industry and a bachelor’s degree in automotive technology. These skills have been applied toward content writing, technical writing, inspections, consulting, automotive software engineering.
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