Market Trends of Europe Electric Vehicle Battery Industry
This section covers the major market trends shaping the Europe Electric Vehicle Battery Market according to our research experts:
Lithium-ion battery Segment expected to witness significant growth Market
- The price of lithium-ion batteries has fallen steeply over the past ten years. In 2021, the lithium-ion battery price was USD 123 per kWh. Lithium-ion battery prices are losing continuously, and the price decreased by 12.8% in 2021 compared to price in 2020.
- In March 2020, The European Investment Bank (EIB) signed a EUR 480 million loan agreement with LG Chem Wroclaw Energy, the Polish subsidiary of the LG Chem Group that was established to develop the group's battery production facility in Europe. The financing will be used to construct and operate a manufacturing facility for lithium-ion cells and batteries for battery-powered electric vehicles (BEVs). The project is estimated to cost around EUR 1.5 billion and will have an annual production capacity of over 35 GWh.
- The Swedish lithium-ion battery manufacturer, Northvolt, raised around USD 2.75 billion in June 2021 to expand its factory in Northern Sweden to keep up with the growing demand for electric cars. In March 2021, the company signed a ten-year, USD 14 billion electric vehicle battery supply deal with Volkswagen. The agreement between Northvolt and VW brings the Swedish battery maker's total contracts to USD 27 billion since 2019.
- Lithium-ion battery systems propel plug-in hybrid and electric vehicles. Due to their fast recharge capability, high energy density, and high discharge power, lithium-ion batteries are the only available technology that meets OEM requirements for the vehicle's driving range and charging time. The lead-based traction batteries are not competitive for use in total hybrid electric vehicles or electric vehicles because of their lower specific energy and higher weight.
- Hence, owing to the above points, the Lithium-ion battery segment is likely to see significant growth in the market during the forecast period.
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Germany Expected to see Significant the Market Growth
- The automotive industry plays a vital role in the German economy. The automotive industry in Germany is witnessing growth in electric cars, as seen in the chart beside. Electric car battery sales are expected to grow to USD 60 billion by 2030. Thus, with the growth in the adoption of electric cars, there exists significant growth potential for battery manufacturing. Therefore, it becomes essential for Germany to ensure efficient and cost-effective battery manufacturing, thereby maintaining a firm hold over the entire EV value chain. Hence, Germany considers batteries one of the critical elements to ensure industrial prosperity.
- Germany has been making efforts to develop domestic battery manufacturing capabilities in order to prevent losing value addition in the booming EV market to other nations, such as the United States, which offers a digital platform for autonomous driving combined with Artificial Intelligence (AI), and China, which is into mass manufacturing of batteries.
- Additionally, in January 2019, the German Federal Ministry of Education and Research (BMBF) opened the Battery Cell Research Production Center, which may serve as a new R&D and large-scale industrial manufacturing plant for lithium-ion cells. The centre is expected to receive an investment of EUR 500 million. The primary objective of the facility is to facilitate mass production of lithium-ion cells, thus, reducing the dependence on battery imports, particularly from Asian countries.
- In July 2020, The German government declared that it would devote more than EUR 1.5 billion to the development and manufacture of battery cells, with an initial grant of EUR 300 million going to Varta, a manufacturer of batteries. The Ministry of Economic Affairs and Energy will provide help to Varta and four other businesses with battery-cell initiatives in Germany, including BASF, BMW Group, Opel, and Umicore. Additionally, SVOLT Energy Technology plans to construct its first European gigafactory for lithium-ion cells in Saarlouis, Germany, in November 2020. Production at the 24 GWh project is anticipated to begin by the end of 2023.
- Hence, owing to the above points, Germany is expected to see significant market growth in the electric vehicle Battery market during the forecast period.
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