Lithium-ion Battery Market Size to Touch USD 349.6 Bn by 2034 | Towards Automotive Research

According to Towards Automotive researchers, the global lithium-ion battery market size is calculated at USD 78.9 billion in 2025 and is expected to reach around USD 349.6 billion by 2034, growing at a CAGR of 20.34% from 2024 to 2034.

/EIN News/ -- Ottawa, April 29, 2025 (GLOBE NEWSWIRE) -- The global lithium-ion battery market size was valued at USD 65.6 billion in 2024 and is predicted to hit around USD 349.6 billion by 2034, a study published by Towards Automotive, a sister firm of Precedence Research.

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Market Overview:

The lithium-ion battery industry is experiencing significant growth due to the escalating demand for high-performance, lightweight, and energy-efficient battery options across multiple sectors. Commonly used in electric vehicles, consumer electronics, and energy storage systems, lithium-ion batteries are preferred for their extended cycle life and effectiveness. Growing environmental concerns, government incentives for electric mobility, and advancements in battery technology are boosting the demand for Li-ion batteries.

Industries are progressively focusing on sustainable energy shifts, increasing the need for dependable battery technologies. Furthermore, continuous innovations like solid-state lithium-ion batteries and recycling initiatives are supporting the market’s growth. Rapid urban development, technological progress, and the worldwide commitment to decarbonization continue to attract significant investments and strategic partnerships in the lithium-ion battery industry.

Major Trends in the Lithium-ion Battery Market:

• Solid-State Battery Innovation: Solid-state lithium-ion batteries are becoming increasingly popular due to their enhanced energy density, improved safety, and quicker charging abilities, drawing substantial research and development investments from the automotive and electronics sectors worldwide.
• Battery Recycling Initiatives: Growing concerns regarding environmental sustainability are driving investments in lithium-ion battery recycling efforts, which aim to reclaim valuable materials such as lithium, cobalt, and nickel to foster circular economy practices.
• Second-Life Battery Applications: The market is seeing a rising trend of utilizing used EV batteries in secondary energy storage applications, including home power backup and grid stabilization, which enhances the overall lifecycle value of batteries.
  

Limitations & Challenges in the Lithium-ion Battery Market:

• High Initial Cost: The elevated manufacturing and raw material costs of lithium-ion batteries pose a considerable challenge, hindering the affordability of mass-market electric vehicles and large-scale energy storage endeavors.
• Supply Chain Vulnerability: Reliance on limited materials such as lithium, cobalt, and nickel makes the market susceptible to supply chain interruptions. Geopolitical conflicts and fluctuating commodity prices further affect production consistency.
• Safety and Thermal Runaway Risks: Despite advancements in technology, lithium-ion batteries still face hazards of overheating, fire, and explosions, presenting significant safety challenges and restricting adoption in certain high-risk environments.
  

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Rapid Transition Toward Renewable Energy to Open Avenues for Future Market Growth

A major opportunity for the lithium-ion battery market exists in the global transition toward integrating renewable energy. With the increase in solar and wind energy production, the demand for dependable, scalable energy storage solutions is rising. Lithium-ion batteries are well-suited for grid energy storage systems, enabling efficient load balancing, frequency regulation, and backup power. Moreover, the rapid increase in electric vehicle adoption globally is creating high demand for high-capacity, fast-charging batteries. Innovations in battery recycling, next-gen chemistries, and solid-state technology offer additional prospects to penetrate new sectors and provide sustainable, cost-effective energy solutions across a wide range of applications globally.

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Regional Analysis:

Asia Pacific: Leader in Lithium-ion Battery Market

Asia Pacific registered dominance in the lithium-ion battery market with the largest share in 2024. This is mainly due to its robust manufacturing capabilities, a flourishing electric vehicle industry, and heightened investments in renewable energy infrastructure. Nations such as China, Japan, and South Korea have positioned themselves as global pioneers in battery production and innovation. Government initiatives that support clean mobility, significant funding for research and development, and increased demand for consumer electronics further bolstered the growth of the market in the region. Additionally, the presence of leading battery manufacturers and advancements in battery recycling and next-generation technologies present substantial growth possibilities for the market.

Top Asia Pacific Countries for Lithium-ion Battery Production

• China: China leads the world in lithium-ion battery production, propelled by its vast electric vehicle industry, state-sponsored incentives for clean energy vehicles, and substantial investments in battery technology.
• Japan: Japan remains at the forefront of advanced battery technologies, concentrating on efficient, compact designs for electric vehicles, grid energy storage solutions, and electronic devices, supported by a robust research and development ecosystem and international collaborations.
• South Korea: South Korea is a key center for lithium-ion battery advancements, with firms like LG Energy Solution and Samsung SDI increasing their manufacturing capabilities while focusing on next-generation battery chemistries.
  

Europe to Witness Significant Growth in the Lithium-ion Battery Market

Europe is expected to witness significant growth during the forecast period. This is mainly due to stringent regulations to meet carbon neutrality goals and the rising adoption of electric vehicles. The initiatives from the European Union, such as the Green Deal and significant investments in battery manufacturing through the European Battery Alliance, are likely to boost the market’s growth. Prominent automotive manufacturers are transitioning to electric fleets, resulting in unprecedented demand for batteries.

Major Factors for the Market’s Expansion in Europe:

• Europe's rigorous CO2 emission standards are pushing automakers and industries to expedite the adoption of electric vehicles, significantly increasing the demand for lithium-ion batteries across transport and mobility sectors.
• Extensive government backing through subsidies, tax breaks, and funding initiatives for electric vehicle purchases and battery manufacturing is stimulating the growth of Europe's lithium-ion battery market.
• Significant investments in constructing gigafactories in Germany, France, and Sweden are augmenting regional production capabilities, decreasing dependency on imports, and ensuring Europe's competitiveness within the global battery supply chain.
• Europe's emphasis on establishing localized supply chains for crucial raw materials and recycling initiatives aimed at ensuring sustainability is further driving market expansion.
• Technological advancements and government backing together reinforce Europe's optimistic expansion outlook.
  

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Segment Outlook

Product Insights

The lithium cobalt oxide (LCO) segment dominated the lithium-ion battery market in 2024. This is mainly due to its heightened use in consumer electronics such as smartphones, laptops, and digital cameras. LCO batteries provide high energy density, making them suitable for lightweight, compact applications. Their exceptional performance in portable electronics guarantees stable and strong demand across various sectors.

The lithium iron phosphate (LFP) segment is expected to grow at a significant CAGR during the projection period due to its remarkable thermal stability, extended cycle life, and improved safety features. LFP batteries are increasingly favored for electric vehicles, energy storage systems, and industrial applications. Their cost-effectiveness, resistance to overheating, and eco-friendliness are contributing to their increased demand, particularly as manufacturers pursue safer, more economical alternatives for large-scale transportation and renewable energy storage.

Application Insights

The automotive segment led the lithium-ion battery market in 2024 and is expected to grow at the fastest rate in the coming years. This is mainly due to the rising production and adoption of electric vehicles worldwide. EV manufacturers value lithium-ion batteries for their high energy density, lightweight construction, and quick charging abilities. Strict emission regulations, combined with government incentives advocating EV adoption, are prompting automakers to boost the production of electric models. This, in turn, propels the need for Li-ion batteries.

The consumer electronics segment is anticipated to grow at a significant rate in the coming years, driven by escalating demand for smartphones, tablets, laptops, and wearable technologies. Innovations in battery technologies, energy density enhancement, and rapid charging capabilities are enabling manufacturers to create thinner, lighter, and more powerful electronic devices. The ongoing global shift toward smart devices, IoT applications, and portable gadgets further contributes to segmental growth.

Competitive Landscape

• BYD Co., Ltd.
• Hitachi, Ltd.
• Johnson Controls
• LG Chem
• A123 Systems LLC
• Panasonic Corp.
• Saft
• Samsung SDI Co., Ltd.
• Toshiba Corp.
• GS Yuasa International Ltd.

Recent Breakthroughs in the Global Lithium-ion Battery Market:

• In February 2024, Panasonic Energy Co., Ltd., which is a part of the Panasonic Group, announced that it had entered into a long-term agreement with H&T Recharge, a leading manufacturer of battery components, to supply lithium-ion battery cans in North America, aimed at boosting its production of safe electric vehicle batteries.
• In April 2024, LG Energy Solution announced a plan to invest USD 5.5 billion in a state-of-the-art battery complex located in Queen Creek, Arizona. This facility will include two production lines: one for cylindrical lithium-ion batteries for electric vehicles and another for lithium iron phosphate (LFP) batteries intended for energy storage.

Segments Covered in the Report

By Product

• Lithium Cobalt Oxide (LCO)
• Lithium Manganese Oxide (LMO)
• Lithium Titanate
• Lithium Iron Phosphate (LFP)
• Lithium Nickel Cobalt Aluminum Oxide (NCA)
• Lithium Nickel Manganese Cobalt (LMC)

By Application

• Automotive
• Consumer Electronics
• Medical Devices
• Industrial
• Energy Storage System
  

By Region

• North America
• Latin America
• Europe
• Asia Pacific
• Middle East and Africa
  

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