Demand for Lithium-ion Batteries Continue to Grow, Led by Electric Car Sales

lithium-ion Batteries

The rapid growth in electric vehicle (EV) sales continues to drive a sharp increase in battery demand, sustaining a trend observed over recent years. In 2023, global demand for EV batteries surpassed 750 gigawatt-hours (GWh), reflecting a 40% rise from 2022. While this marks a strong increase, the growth rate slightly tapered compared to the surge experienced during 2021–2022. Notably, electric cars were responsible for 95% of this increase. Of the total growth in battery demand linked to EVs, the majority also 95% was attributed to higher EV sales, with the remaining 5% coming from the trend toward larger average battery capacities, particularly due to the rising share of SUVs in the EV market.

• A key factor supporting this expansion has been the dramatic decline in lithium-ion batteries prices. In 2023, the average cost per kilowatt-hour (kWh) fell to around USD 139, representing a steep 82.17% drop from 2013 levels. This price reduction has played a pivotal role in boosting the accessibility of lithium-ion batteries for a range of uses, from automotive manufacturing to large-scale energy storage, enabling broader adoption across multiple sectors.
• Technological improvements have paralleled these cost reductions, especially in battery performance, energy density, and safety. These advancements have made lithium-ion batteries more suitable for demanding applications such as electric vehicles and utility-scale energy storage systems. Together, the decreasing cost and improved functionality have created a reinforcing cycle of increased deployment and further innovation.
• Simultaneously, the global shift toward renewable energy has created strong demand for advanced energy storage systems. According to the International Renewable Energy Agency (IRENA), clean energy capacity reached 2,025 gigawatts (GW) in 2023, underscoring the vast scale of renewable adoption. Lithium-ion batteries now serve not only in large-scale grid storage but also in residential and commercial systems, enhancing load management, backup capabilities, and system reliability.
• As the complexity of lithium-ion battery (LiB) development grows, artificial intelligence (AI), particularly machine learning, is increasingly vital. These technologies support manufacturing by improving production efficiency and minimizing material waste, especially during research and development.