Li-ion battery shipments are projected to experience significant expansion, achieving a robust 21.4% compound annual growth rate (CAGR) by 2029.
Global Li-Ion Battery Shipments See Strong Growth, Set to Surpass 3,500 GWh by 2029
According to the latest Li-ion Battery and Manufacturing Equipment – 2024 report from Interact Analysis, the global lithium-ion battery market experienced a substantial 38.8% year-over-year increase in 2023, surpassing 1,100 GWh in total shipments. This upward trend is expected to persist, with projections indicating a 21.2% increase in 2024, reaching over 1,330 GWh. A key driver of this growth is the surging demand in the energy storage sector. Looking ahead, the market is poised to expand at a compound annual growth rate (CAGR) of 21.4% between 2024 and 2029, with shipments expected to exceed 3,515 GWh by the end of the forecast period.
Revised Growth Outlook Due to EV Market Challenges
Compared to the previous forecast, which projected a 21.9% CAGR for global lithium-ion battery shipments between 2023 and 2029, the updated outlook reflects a slight downward revision of 0.5 percentage points. This adjustment is primarily attributed to a slowdown in electric vehicle (EV) production and sales in North America and Europe, leading to weaker short-term demand for EV batteries.
Asia Pacific Leads the Market, While the Americas Show Fastest Growth
The Asia Pacific region is set to maintain its dominance in the lithium-ion battery market, accounting for 65.3% of total shipments in 2023 and an estimated 60.9% by 2029. Despite its leadership position, the region’s growth rate is projected at a slightly lower CAGR of 18.3% from 2024 to 2029. China remains the largest market for both EV and energy storage system (ESS) batteries, while India, Japan, and South Korea are expected to rank among the top 10 markets by 2029.
Europe, the Middle East, and Africa (EMEA) held a 21% market share in 2023, but due to the sluggish growth of EV battery demand, this share is expected to decline to 16.9% in 2024. Over the forecast period, lithium battery shipments in the EMEA region are anticipated to grow at a CAGR of 25.5%, capturing 19.9% of the global market by 2029.
Meanwhile, the Americas region is projected to achieve the highest growth rate, with a CAGR of 29.4% through 2029. Lithium-ion battery shipments to this region, which stood at over 151 GWh in 2023, are forecasted to reach approximately 675 GWh by 2029. The U.S. will play a significant role in this expansion, increasing its share of global shipments from 11.5% in 2023 to more than 15% by the end of the decade, fueled by growing demand for EVs and energy storage solutions.
Energy Storage Segment Expands Rapidly
EV batteries remain the dominant application for lithium-ion technology, representing 75.9% of total shipments in 2023 and an estimated 71.7% in 2029. Passenger vehicles continue to drive the bulk of demand, while the increasing adoption of electric trucks and off-road equipment further diversifies the market.
However, energy storage systems (ESS) are emerging as the fastest-growing segment. Since 2022, demand for ESS batteries has skyrocketed, with shipments reaching nearly 204 GWh in 2023—a 72.6% increase year-over-year. The segment is expected to grow at a CAGR of 25.2% through 2029, outpacing EV batteries in growth rate. Large-scale front-of-meter (FTM) energy storage projects, particularly in the U.S. and China, will drive this expansion, with additional momentum coming from emerging markets such as India, Brazil, and Chile, where energy storage is being integrated into solar and wind power projects.
Chinese Manufacturers Continue to Dominate
The global lithium-ion battery market remains highly concentrated, with the top 10 manufacturers collectively accounting for 86.2% of total shipments in 2023. Among these, ATL stands out as the only major supplier focused on consumer electronics. The remaining industry leaders have established strong positions in the EV and ESS battery markets.
South Korean and Japanese battery manufacturers, including LG Energy Solution (LGES), SK On, and Panasonic, hold significant shares in the EV battery market, ranking third to fifth globally in 2023. However, the ESS market is largely dominated by Chinese players, who collectively held 73.8% of total shipments in 2023, driven by massive domestic demand for energy storage solutions.
Conclusion
The lithium-ion battery industry is undergoing rapid expansion, propelled by the energy storage boom and the sustained demand for EVs. While growth in the automotive sector has slightly slowed, the market remains on track for a strong performance through 2029. Companies looking to capitalize on this trend will need to navigate shifting regional demand dynamics, with Asia Pacific leading in volume, EMEA experiencing moderate growth, and the Americas emerging as the fastest-growing market.
