Quadruple Battery Demand by 2030: Key Insights from Bain & Company

Global Battery Demand Soars: Lithium-Ion Batteries and Emerging Technologies Lead the Charge

Editorial Team (ET)May 9, 2025

Global battery demand is poised for a monumental surge, expected to quadruple to 4,100 gigawatt-hours (GWh) between 2023 and 2030, according to a new report by Bain & Company. This staggering increase underscores the escalating need for energy storage solutions driven by the proliferation of electric vehicles (EVs) and renewable energy integration.

Lithium-Ion Batteries: The Dominant Force

Lithium-ion batteries, the powerhouse of current battery technology, are projected to retain their dominance well into the foreseeable future. Their widespread adoption across various sectors, particularly in EVs, has cemented their position as the go-to energy storage solution. The versatility and efficiency of lithium-ion batteries make them indispensable in meeting the burgeoning energy demands of modern society.

Key Cathode Chemistries: NMC and LFP

Among lithium-ion batteries, Nickel Manganese Cobalt (NMC) and Lithium-Iron Phosphate (LFP) chemistries reign supreme. Together, these two chemistries account for over 90% of lithium-ion battery sales for EVs. NMC batteries are prized for their high energy density, making them ideal for applications where space and weight are at a premium. On the other hand, LFP batteries offer superior thermal stability and safety, which are crucial for mass-market EV adoption.

Emerging Technologies: Solid-State and Sodium-Ion

While NMC and LFP dominate the market, emerging technologies like solid-state and high-density sodium-ion batteries are making headway. Currently in the prototype and pilot manufacturing stages, these technologies are expected to capture single-digit market shares by 2030. Solid-state batteries promise higher energy densities and improved safety, while sodium-ion batteries offer a cost-effective alternative to lithium-based solutions.

The Cost Factor: Batteries and OEMs

Batteries represent the single largest cost driver for Original Equipment Manufacturers (OEMs) and significantly influence product performance. As the industry grapples with evolving battery chemistries, OEMs face critical decisions regarding the type of batteries to use and whether to develop them in-house or collaborate with external partners. The choice of battery technology can make or break an OEM's product roadmap, emphasizing the importance of strategic decision-making in this rapidly evolving landscape.

The Regional Perspective: China, USA, and EU

China stands out as a dominant player in the battery market, particularly with LFP batteries. The robust demand for mass-market EVs and well-established supply chains have positioned China at the forefront of LFP adoption. Furthermore, innovations such as M3P and Lithium Manganese Iron Phosphate (LFMP) variants are enhancing the energy density and appeal of LFP batteries in China.

In contrast, the adoption of LFP in the USA and EU faces several hurdles. Domestic production of LFP batteries is minimal, and existing supply chains for iron and phosphorus are less mature compared to China. Consequently, the cost advantage of LFP over NMC is diminished by the costs associated with importing LFP from China. Additionally, many Western companies are exploring no- or low-cobalt NMC variants to reduce costs, further challenging the adoption of LFP in these regions. Geopolitical tensions and import tariffs add another layer of complexity for Western OEMs seeking to build resilient supply chains.

Future Trends and Innovations

The battery industry is on the cusp of significant advancements. Variants like M3P and LFMP are set to improve the energy density of LFP batteries, making them more competitive. Simultaneously, low-cobalt NMC variants are being developed to reduce reliance on cobalt, a material associated with ethical and supply chain concerns. These innovations will play a crucial role in shaping the future of battery technology, providing OEMs with more options to optimize performance and cost.

Insights from Mahadevan Seetharaman

Mahadevan Seetharaman, a Bengaluru-based partner at Bain & Company’s Advanced Manufacturing Services practice, offers key insights into the current battery landscape. Seetharaman emphasizes the critical role of batteries as the single biggest cost driver for OEMs, influencing both product performance and strategic decisions. He highlights the ongoing flux in battery chemistries, particularly within lithium-ion batteries, which poses challenges and opportunities for OEMs worldwide.

“OEMs across the world face the critical choice of which battery type to use and whether to develop batteries in-house or through collaboration with other companies,” says Seetharaman. His insights underline the complexity of navigating the evolving battery market and the importance of strategic planning in achieving competitive advantage.

Conclusion

The report by Bain & Company paints a promising picture of the future battery market, with demand set to quadruple by 2030. Lithium-ion batteries, particularly those with NMC and LFP chemistries, will continue to dominate, while emerging technologies like solid-state and sodium-ion batteries will gradually gain market share. OEMs must navigate the evolving landscape carefully, balancing cost, performance, and supply chain resilience. The future of battery technology is bright, with innovations poised to meet the soaring demand for energy storage solutions.

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