Global battery industry sees unprecedented growth in 2023

The global battery industry experienced a year of transformative growth and recalibration in 2023, as detailed in the latest annual report by Volta. This growth was characterised by a significant surge in electric vehicle (EV) sales, substantial price reductions, and strategic advancements in technology and manufacturing.
One of the year’s most notable developments was the dramatic increase in passenger EV sales, which for the first time topped 10 million units, marking a 32% year-on-year growth. This remarkable achievement came despite the backdrop of higher interest rates, underscoring the strengthening consumer demand for EVs. A key factor behind this surge was the intense competition among manufacturers, leading to what has been termed an ‘EV price war’. This competition drove down the average price paid for a new EV by 25%, bringing it to just 4% higher than the overall new car market average.

The cost dynamics of the industry also underwent significant changes. The report notes a dramatic 80% decrease in the cost of lithium since its peak in late 2022. While this posed challenges for mining companies, it contributed to reducing battery cell-level prices by 16%, bringing them down to $107/kWh. This reduction is a critical factor in making EVs more accessible and affordable for a broader range of consumers.

In terms of technology and standards, the industry saw near-universal acceptance of the NACS charging standard by major OEMs, signalling a move towards greater standardization and compatibility in EV charging infrastructure. Additionally, there was a noticeable trend towards large-format prismatic cells, influenced by the continued adoption of LFP (Lithium Iron Phosphate) battery chemistry.

The report also sheds light on the global expansion of battery manufacturing capacity. An ambitious 7 TWh of capacity is planned globally before 2030, with China poised to account for 68.5% of this expansion. In contrast, North American and European capacities are primarily focusing on NMC (Nickel Manganese Cobalt) chemistries.

Furthermore, the report discusses the evolving regulatory landscape, especially in the US and EU. These regions have outlined official guidance over the past year to ensure greater security in the sourcing of critical minerals and the development of a domestic battery supply chain. This move is seen as a strategic step to fortify the industry against potential supply chain disruptions and to promote sustainable practices.

The Volta report underscores that 2023 was a year of not just growth but also strategic realignment and innovation in the global battery industry. With burgeoning EV sales, decreasing costs, and a focus on sustainable and efficient manufacturing and sourcing practices, the industry is poised for continued expansion and evolution in the years to come.

Global battery industry sees unprecedented growth in 2023
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