Global Li-ion Battery Shipments Will Exceed 3.5 TWh in 2029

The "Li-ion Battery and Manufacturing Equipment – 2024" report from Interact Analysis states that global shipments of Li-ion batteries surged by 38.8% year-on-year in 2023, reaching a new high of >1,100 GWh. In 2024, total shipments are estimated to grow by 21.2% year-on-year to >1,330 GWh, driven up by robust demand in the energy storage market. This growth momentum will continue in the future, with the sector registering a 21.4% compound annual growth rate (CAGR) from 2024 to 2029, rising to >3,515 GWh in 2029.

Compared with a projected 21.9% CAGR (2023 to 2029) for global Li-ion battery shipments in last year’s report, we have revised down the average annual growth rate by 0.5 percentage points over the same period. This is largely due to the slowdown in electric vehicle (EV) production and sales in European and American markets, which resulted in reduced growth for EV batteries, particularly in the short-term.

Asia Pacific remains the largest regional market, while the Americas is projected to grow fastest

Our forecast period (up to 2029) indicates Asia Pacific will be the largest regional market for Li-ion batteries, accounting for 65.3% of total global shipments, or nearly 720 GWh, in 2023, and 60.9% in 2029. This region will grow at a CAGR of 18.3% from 2024 to 2029, slightly below the global average. In addition to China being the world’s largest market for both EV and ESS batteries, India, Japan and South Korea are expected to be among the top 10 countries for Li-ion battery shipments by 2029.

EMEA was the next-largest market for lithium batteries, accounting for a 21.0% share in 2023. But, owing to stagnant demand for EV batteries in the region, its share is expected to decline to 16.9% in 2024. Over the forecast period, lithium battery shipments in EMEA are expected to grow at a 5-year-CAGR of 25.5%, accounting for 19.9% of the global total in 2029.

The Americas region will enjoy the highest growth rate (CAGR 29.4%) over the forecast period, with nearly 675 GWh projected to be shipped in 2029. In 2023, sales of Li-ion batteries to the Americas amounted to >151 GWh. This fast growth is primarily led by the US market increasing its share from 11.5% of global shipments in 2023 to >15% in 2029, due to huge demand for EVs and energy storage (ESS).

Battery shipments in the Americas and EMEA are forecast strong growth by 2029, but Asia-Pacific continues to dominate the market.Interact Analysis

Energy Storage is the fastest-growing downstream market

From an application perspective, EV batteries were, and will remain, the biggest market segment – accounting 75.9% and 71.7% of total battery shipments in 2023 and 2029, respectively. Additionally, passenger cars will remain the largest application for lithium-ion batteries. On the other hand, penetration of electrified trucks and off-road equipment will speed up and diversify applications for EV batteries.

However, since 2022, demand for energy storage batteries has also been soaring due to the boom in battery energy storage installations. In 2023, energy storage (ESS) battery shipments hit a new high of nearly 204 GWh, or 18.5% of total battery shipments, and rose to 72.6% year-on-year. Over the forecast period, ESS batteries are expected to grow at a 5-year-CAGR of 25.2%, surpassing EV batteries. Front-of-meter (FTM) energy storage will be the largest application scenario for ESS batteries, driven by the US and Chinese markets. This is coupled with growth in emerging country markets (e.g. India, Chile, Brazil), which are expected to deploy energy storage for solar and wind projects during the forecast period. The FTM sector will outpace the behind-the-meter, residential, commercial, and industrial energy storage markets by 2029.

Asian companies dominate global li-ion battery shipments

The global market for lithium-ion batteries has been very concentrated, with the top 10 vendors accounting for 86.2% of total shipments in 2023. Of the top 10 players, ATL was the only battery producer focusing on CE applications. The remaining leading vendors all had strong presence in EV and ESS battery markets.

The leading South Korean and Japanese battery vendors (such as LGES, SK On and Panasonic) had higher market shares in the EV battery market than in the ESS battery market. These companies ranked third to fifth, respectively, in the global market for EV batteries in 2023.

In the ESS battery market, all the top 5 companies came from China in 2023, owing to the huge Chinese domestic market for energy storage. They held a combined share of 73.8%.