Global demand for batteries reached a new milestone in 2024, suring the 1 TWh mark, according to data from a report by IEA (International Energy Agency, its acronym in English).
The sector's accelerated growth reflects an industry undergoing transformation, driven by technological advances and falling production costs.
The Agency highlights that the average price of batteries for electric vehicles has fallen to less than US$ 100 per kWh, an unprecedented level.
Furthermore, the price of lithium batteries has fallen by more than 85% in the last two years, helped by large-scale production and increased supply in the market.
“After years of investment, global battery manufacturing capacity reached 3 TWh in 2024. If all announced projects come to fruition, this capacity could triple in the next five years,” says the IEA.
Battery industry enters a new phase of development
Given the figures presented, the Agency assesses that the battery sector is undergoing global expansion, ceasing to be a regionalized market to become more integrated and competitive.
For the coming years, the IEA predicts that economies of scale, strategic partnerships along the supply chain and technological innovations will be decisive for strengthening the industry.
This scenario, according to the entity, could lead to greater consolidation in the sector, while governments in different countries could geographically diversify the production of technology and reduce dependence on a single supplier.
China maintains leadership in battery market
China will continue to dominate global battery production in the coming years, currently ing for more than 75% of global manufacturing.
According to the IEA, Chinese manufacturers are also expected to expand their presence in Europe, either through new factories or strategic partnerships.
“t venture projects can accelerate the adoption of lithium batteries in the region, strengthen the European ecosystem and reduce the cost gap with China,” the Agency points out.
With the battery market advancing rapidly, the entity believes that the coming years will be decisive for the consolidation of the industry and for the future of electric mobility and energy storage in the world.
Despite China's current dominance, the IEA points out that battery production is also advancing rapidly in other regions of the world.
South Korea and Japan strengthen global presence
South Korea and Japan have already established themselves as important players in the battery industry, being home to renowned manufacturers and suppliers specializing in NMC (nickel-manganese-cobalt) batteries.
Although domestic production in these countries is limited, their companies have expanded manufacturing overseas, making significant investments in factories outside Asia.
South Korean manufacturers currently lead the world in of production capacity, with nearly 400 GWh, suring Japan's 60 GWh and China's 30 GWh, according to the IEA.
By 2024, South Korean companies will supply more than 20% of global demand for electric vehicle batteries, while Japanese manufacturers will for nearly 7%.
“The big question for these markets is to what extent they will adopt cheaper batteries, currently dominated by China. At the same time, companies from these countries are leading the race to develop sodium batteries, one of the main bets for the future of the industry,” the Agency points out.
United States accelerates production capacity
In the United States, battery manufacturing capacity has doubled since 2022, driven by the implementation of tax credits for producers. By 2024, the country will reach more than 200 GWh of installed capacity, while another 700 GWh are in the development phase.
In the country, about 40% of the current capacity is operated or developed by battery manufacturers in partnership with automakers. “However, domestic production of essential components, such as anodes and cathodes, is still progressing slowly, leading the US to depend on imports to meet this demand.”
In addition to electric vehicles, demand for batteries for stationary applications (such as renewable energy storage) has grown by more than 60% per year over the past two years in the United States, opening up “a new market for the industry, although still with a smaller volume compared to the automotive sector”.
New emerging production hubs
While more consolidated markets expand their presence, Southeast Asia and Morocco are beginning to emerge as potential production centers for batteries and their components.
Southeast Asia has attracted significant investment from China, accelerating the transfer of technology and innovation to the region.
Indonesia, which s for half of the world's nickel extraction, began production in its first battery factories in 2024, consolidating itself as a new hub for the supply of raw materials and production.
“Morocco benefits from large reserves of phosphate, a mineral essential for battery manufacturing, as well as an established automotive industry and free trade agreements with the European Union and the United States. This favorable scenario has led to an investment of more than US$15 billion in 2022 for the development of battery and component factories in the country,” the IEA highlights.
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