According to the latest report by Bain, as electric vehicle sales continue to rise, global battery demand is expected to double from 2023 to 2030, reaching 4,100 kWh. Therefore, host factories must improve their battery strategy and accelerate their industry layout.

Weimin Zeng, Senior Global Partner of Bain and former Chairman of Performance Improvement Business in the Asia-Pacific Region, said that the battery is the biggest cost driver for host factories and has an impact on product performance. On the other hand, changes in battery chemistry, especially in lithium-ion battery chemistry, have a significant impact on host factory product planning. Therefore, global host factories face the same critical choice: which type of battery to choose and whether to develop batteries independently or in cooperation with other companies.

Liu Xiangping, Bain's Global Partner and Chairman of Greater China Industrial Products, Manufacturing and Automotive business, said that this report summarizes the five major trends of electric vehicle batteries that host factories need to closely observe until 2030. We believe that in the foreseeable future, lithium-ion batteries will still dominate and lithium-ion battery technology will continue to reduce costs and improve performance. Solid-state sodium-ion batteries will be the only direction in new emerging technologies with the opportunity to achieve commercialization. Battery recycling demand will also rise significantly.

The five major trends of electric vehicle batteries that host factories need to closely observe until 2030:

In the foreseeable future, lithium-ion batteries will still dominate.

Lithium-ion batteries have always been the dominant technology in the global electric vehicle battery market and are expected to continue to maintain this position in the near future. In contrast, emerging technologies such as solid-state and high-density sodium batteries are still in the prototype development and trial production stage, and their market share is expected to remain in the single digits before 2030.

NMC and LFP will become the main positive electrode chemical components.

Currently, the positive electrode chemical components of lithium-ion batteries, such as LFP and NMC, account for over 90% of sales.

In China, due to the strong demand for electric vehicles and mature supply chains, and with the emergence of new lithium-ion batteries with higher energy densities such as M3P and LFMP, lithium-ion batteries will occupy a more dominant position.

In the US and EU, the market share of LFP will increase, but it will still be lower than in China due to various reasons. First, these regions hardly produce LFP, and the supply chain for iron and phosphate is far less mature than in China, so they need to import from China, weakening the cost advantage of LFP over NMC. In addition, the economic viability of LFP recycling is not as good as that of NMC, further weakening the cost advantage of LFP. At the same time, many companies are researching new types of NMC without cobalt or with low cobalt, such as NMx, HLM high lithium manganese, and high voltage nickel, which will further reduce the cost of NMC. Finally, influenced by import duties and geopolitical challenges, western host factories that attach importance to supply chain resilience will not consider LFP as an ideal battery chemistry.

Lithium-ion battery technology will continue to reduce costs and improve performance.

The lithium-ion battery technology system will undergo major changes in positive electrode chemical components, negative electrode chemical components, battery form and battery pack structure. Host factories are closely watching several innovative technologies, such as integrating batteries into car structures through battery chassis integration (CTC) technology, improving dry electrode manufacturing processes to reduce energy consumption and manufacturing costs, and using AI to further empower battery management systems and extend battery life.

By 2030, solid-state sodium-ion batteries will be the only emerging technology that can achieve commercialization.

Compared with NMC, solid-state batteries have significantly higher energy density, are safer, charge faster, and have a longer lifespan. However, after multiple delays, relevant companies have recently released preliminary verification results of concept prototypes, and we expect it will take another three to four years for commercialization.

Compared with lithium-ion batteries, sodium-ion batteries have lower cost, higher safety, and can operate at lower temperatures. However, sodium-ion batteries have always faced the problem of low energy density, which has made some progress, and the energy density of prototype products can now be comparable to that of lithium-ion batteries. Many companies have announced plans to expand production scale by 2025. Bain expects that sodium-ion electric vehicles will be put into commercial use in the first half of 2025.

Battery recycling demand will rise significantly by 2030.

With the increase of stockpiles of waste batteries, the recycling and utilization of electric vehicle batteries is expected to increase significantly. In addition, new regulations for collecting, recycling, and using recycled materials will be introduced around the world, which is expected to further promote the recycling and utilization of batteries.

Battery manufacturers and OEMs are also exploring new business models such as battery leasing in order to take responsibility for battery recycling while maintaining ownership of the batteries.