Key Market Sectors
Key Demand Drivers & Customer Groups
Key market sectors driving battery demand include:
Electric Vehicles and E-Mobility
Evolving consumer preferences coupled with growing government incentives and regulations are driving a once-in a century shift to electrification of the combustion engine vehicle fleet. For example, countries such as the United Kingdom, Germany, France and Sweden have announced their intentions to either increase the applicable environmental targets or outright ban the sale of internal combustion engine vehicles.
Consumers are also increasingly considering electric vehicles for a variety of reasons including better performance, increasing charging infrastructure, lower maintenance and operating costs as well as lower environmental impacts.
In 2019, 2.1 million passenger EVs were sold globally, up from 1.9 million in 2018 and 1.1 million in 2017. In 2019, EV sales accounted for 3% of all vehicle sales. By 2025, EVs are forecast to account for 10% of global passanger vehicle sales, rising to 28% in 2030 and 58% in 2040.
By 2030, China and Europe are forecast to represent 72% of all passenger EV sales driven by European vehicle CO2 regulations and China’s EV credit system, fuel economy regulations and city policies restricting new internal combustion vehicle sales.
The electrification of two wheeled vehicles such as motorcycles, e-bikes and e-scooters are also a significant driver behind e-mobility battery demand. Adoption in this sector has been rapid due to policy however rising manufacturer interest and improving total-cost-of-ownership economics will continue to drive the electrification of this segment. It is estimated that 77% of global two-wheeler sales will be electric in 2040.
Lighter, more energy dense and safer batteries are critical to this sector in order to drop cost, increase range and deliver cost advantages over conventional petrol and diesel powered vehicles.
Consumer Electronics & Internet of Things Devices
As highlighted in Figure 5 consumer electronics such as mobile phones and other wearable devices account for 36% of total lithium-ion demand in 2020 (70GWh/year). This is forecast to grow to 137GWh/year by 2030 however its percentage as a proportion of total battery demand is forecast to decline to 6.7% due to the rapid growth in EV demand. Connected wearable devices such as smart watches, portable personal devices such as wireless speakers and ear/headphones and remote asset monitoring sensors are continuing to grow at a rapid rate.
Manufacturers are seeking advances in battery technology to provide safe and ultra-long-life batteries to allow them to drive product innovation forward. Manufacturers are continuously searching for alternative advanced battery technologies due to the inherent technological limitations, safety concerns and environmental impacts of lithium-ion batteries.
Aviation and Drone Technology
Attempts at advancing battery powered aviation in large commercial aircaft have been limited by the weight, energy capacity and recharge speed of batteries relative to existing. Jet fuel contains around 30 times more energy per kilogram than current market leading lithium-ion batteries.
There are also various safety concerns surrounding the use of lithium-ion batteries in aviation as these batteries are flammable if damaged and become hazardous over time. This was highlighted in 2014 where the entire Boeing 787 fleet was grounded by the U.S. Federal Aviation Administration following batteries in the auxiliary power unit catching on fire.
Drone technology is continuing to advance with continued applications being developed. There are growing requirements for drones to fly longer and to also carry heavier payloads to open up new commercial applications.
Safe, light batteries with a high energy capacity and quicker recharge times are critical to open up commercial drone applications and to enhance safety in aviation.
Law Enforcement and Defence
Technology used in law enforcement and defence are becoming increasingly dependent on portable electrical energy. For example, land vehicles for law enforcement and defence forces are being fitted with more electronic equipment resulting in increased demand for energy. Insufficient energy storage can inhibit operational performance particilarly when conducting silent watch operations (when the engine is off). In these circumstances batteries with low energy capabilities will last short periods of time.
Batteries have become mission critical for law enforcement and defence personel and their electronic devices. This equipment can include a rugged tablet computer for GPS and navigation, short / long range radios, satellite phones, nightvision gear, chemical detectors and assorted sensors. According to Forbes, a typical U.S. soldier may carry a dozen devices and 70 batteries on a 3-day patrol weighing around 7.3kg.
Globally law enforcement and defence forces are searching for advances in battery technology which have greater energy denisity, are lighter in weight and safe when subjected to kinetic impact.