North America Battery Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

North America Battery Market Trends and Insights

IRA-Fuelled Gigafactory Build-Out Compressing Pack Costs

Section 45X of the Inflation Reduction Act (IRA) provides USD 35 per kilowatt-hour for cells and USD 10 per kilowatt-hour for modules manufactured domestically, a structure that triggered USD 110 billion of announced battery investments across 13 states since 2022.^{[2] U.S. Department of Energy, “Section 45X Advanced Manufacturing Credits,” energy.gov} BlueOval SK secured a USD 9.6 billion Department of Energy loan for twin plants in Kentucky and Tennessee, with the first line online in late 2025. Panasonic ramped its De Soto, Kansas facility to 30 gigawatt-hours in 2025, while Samsung SDI and General Motors broke ground on an Indiana site targeting 2026 start-up. These projects lower the breakeven utilization threshold from 80% to 60%, accelerating commissioning schedules and enabling a forecast 40% pack-cost decline from 2022 to 2027. As costs fall, total-cost-of-ownership parity between EVs and internal-combustion vehicles is expected as early as 2027, a full two years earlier than many OEMs originally modeled.

On-Shoring Incentives Reducing Supply-Chain Risk for OEMs

Automakers absorbed USD 2.3 billion of extra logistics costs during the 2021–2022 semiconductor crunch, prompting a pivot toward regional cell production that mitigates shipping disruptions and tariff exposure. The IRA’s Foreign Entity of Concern provisions, effective January 2024, disqualify EVs from a USD 7,500 consumer credit if batteries or critical minerals come from Chinese or Russian entities, driving supplier re-mapping. Ultium Cells now runs three U.S. plants totaling 140 gigawatt-hours, trimming cell lead times from 12 to 4 weeks and lowering working-capital needs by about 20%. Stellantis and Samsung SDI followed with a USD 7.3 billion Kokomo facility that secures supply for full-size pickups. Together, these vertically integrated models insulate OEM programs from foreign-exchange swings and logistics bottlenecks, protecting margins during the EV ramp.

Utility-Scale Storage Mandates in CA, NY, TX, BC

California requires 11.5 gigawatts of incremental storage by 2026 and another 15 gigawatts by 2030, spurring record interconnection requests for lithium-ion projects. New York’s Climate Leadership and Community Protection Act targets 6 gigawatts of storage by 2030, backed by a USD 400 million incentive pot launched in 2024. ERCOT added 4.2 gigawatts of batteries in 2024, the largest single-year gain nationwide, as merchants arbitraged peak-price spreads. British Columbia’s CleanBC blueprint seeks 3 gigawatts by 2030, with BC Hydro issuing 1.5 gigawatts of 2025 RFPs. These mandates underpin multiyear offtake contracts that cut project financing costs by 100–150 basis points and create a demand floor independent of EV adoption trajectories.

EV-Driven Average Battery Size Increase (SUV Mix)

Average North American pack size jumped from 62 kilowatt-hours in 2022 to 78 kilowatt-hours in 2025 as consumers gravitated toward electric SUVs and pickups.^{[3]Ford Motor Company, “F-150 Lightning Battery Specifications,” ford.com} The Ford F-150 Lightning, Chevrolet Silverado EV, and Rivian R1T each deploy packs exceeding 130 kilowatt-hours, magnifying cell demand beyond unit-sales growth. A 1% rise in EV penetration now equates to a 1.3% uptick in gigawatt-hour demand, compressing timelines for new-build gigafactory absorption. Cell-to-pack architectures that remove module housings cut part counts by 30% and lift energy density by up to 15%, a design shift favoring vertically integrated OEMs capable of co-engineering cells and structural enclosures. Higher average pack capacities are therefore both a volume and technology catalyst, reinforcing learning-curve cost declines.

Lithium-Price Volatility Widening Project IRR Band

Spot lithium-carbonate prices plunged from USD 80,000 per metric ton in late 2022 to USD 12,000 by June 2024 before rebounding to USD 15,000 by December, a roller-coaster that injected a 12%–15% spread into battery-pack economics. General Motors’ Thacker Pass joint venture aims to secure 40,000 metric tons annually by 2027, shielding 800,000 vehicles per year from spot swings. Yet project IRRs remain highly sensitive; sustained prices below USD 18,000 could extend paybacks beyond 10 years, delaying bank financing for mid-tier cell manufacturers. Smaller firms lacking captive lithium struggle to hit the 80% offtake threshold demanded by lenders, throttling greenfield builds and weighing on near-term capacity additions.

Mid-Stream Bottlenecks (Foil, Separator) Delay Ramp-Ups

Separator film and copper foil constitute 15%-20% of a cell’s bill of materials, but over 70% of global separator capacity sits with three Asian suppliers, leaving new North American lines vulnerable to shortages.^{[4]Financial Times, “Battery Supply-Chain Constraints,” ft.com} Gigafactories that started in 2024 experienced 3- to 6-month qualification delays, pushing revenue ramp-ups into 2026. U.S. copper-foil capacity covered only 150 gigawatt-hours of annual demand in 2024 versus 1,100 gigawatt-hours of announced cell capacity by 2030, forcing OEMs to dual-source from Asia and accept longer lead times. SK Nexilis’ 30,000-metric-ton Kentucky plant, due 2027, will address just a slice of the deficit. Until mid-stream supply expands, gigafactory commissioning schedules remain a gating factor for the North America battery market outlook.

Segment Analysis

By Battery Type: Rechargeable Dominance Accelerates

Secondary rechargeable batteries accounted for 75.5% of the North America battery market share in 2025 and are projected to expand at a 15.5% CAGR to 2031. This growth trajectory reflects surging EV and stationary-storage deployments, both of which require high cycle life and multi-year warranties that favor lithium-ion chemistries. Average pack sizes in electric trucks rose to 78 kilowatt-hours in 2025, lifting cell demand per vehicle and hastening gigafactory utilization ramps. Primary cells, at 24.5% of revenue, grow at single-digit rates, limited to medical, defense, and IoT niches where multi-decade shelf life outweighs rechargeability. Consolidation trends differ by sub-segment; Duracell and Energizer maintain brand pull in consumer alkaline, whereas automotive OEMs increasingly insource lithium-ion, compressing margins for independent suppliers.

Unit-economics are also diverging. Tesla’s internal 4680 line hit a 10 gigawatt-hour run rate by September 2025, reducing per-kilowatt-hour costs 15% versus externally sourced 2170 cells and capturing upstream value that previously accrued to vendors. Small primary-battery suppliers benefited from a 12% rise in Department of Defense procurement in 2024, highlighting how performance-critical niches can still yield steady margins despite slower volume growth. Overall, rechargeable capacity additions—and associated learning-curve cost declines—are locked in as the principal engine of the North America battery market through 2031.

By Technology: Solid-State Gains Outpace Lithium-Ion

Lithium-ion retained 60.2% of 2025 revenue, underpinned by established NMC and LFP chemistries that combine cost competitiveness with automotive-grade safety. Solid-state cells, while representing less than 1% of shipments, are on course for a 35.8% CAGR as pilot lines scale and OEMs chase 400 watt-hour-per-kilogram energy densities. Lead-acid, still critical for starting-lighting-ignition, slipped below 25% as EVs erode the internal-combustion vehicle base and data centers pivot to lithium-ion UPS systems.

QuantumScape and Volkswagen’s PowerCo finalized a licensing pact in April 2025, aiming for initial solid-state deliveries in 2026, signaling readiness for limited commercial adoption. Sodium-ion cells from Natron Energy entered production in Michigan to serve stationary UPS and material-handling use cases where energy density is secondary to cost and cycle life. Flow and lithium-sulfur variants remain restricted to demonstration projects given current cost-per-cycle disadvantages, but continued R&D investment keeps them on the long-term radar for grid storage applications.

Note: Segment shares of all individual segments available upon report purchase

By Application: Automotive Segment Drives Volume

Automotive batteries captured 46.9% of 2025 revenue and are forecast to grow 19.7% annually to 2031, cementing their role as the principal volume driver for the North America battery market. Pickup- and SUV-heavy model mixes push pack capacities above 100 kilowatt-hours, magnifying the gigawatt-hour impact of each new EV launch. Industrial stationary storage, at roughly 30% of revenue, posts mid-teen growth as data centers, telecoms, and utilities replace lead-acid and gas peakers with lithium-ion systems that cut operating costs by up to 50%. Portable consumer electronics and power tools hold a 15% share, with cordless tool electrification offsetting slower smartphone replacement cycles.

SLI batteries, now below an 8% share, decline slowly as the regional fleet transitions to EVs. Clarios is repositioning with 12-volt lithium-ion packs for EV auxiliaries, a nascent but strategic hedge against diminishing lead-acid demand. Co-location strategies—such as Ultium Cells’ Spring Hill site only 5 miles from GM’s truck line—underscore how logistics optimization and just-in-time delivery are now as critical as chemistry advances for competitive advantage.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

The United States generated 73.8% of 2025 revenue, powered by more than USD 110 billion of post-IRA cell-plant announcements and aggressive state storage mandates. Loan Programs Office commitments totaling USD 18 billion cut weighted-average costs of capital by up to 200 basis points, tipping numerous projects from “proposed” to “under construction.” California, New York, and Texas alone accounted for 60% of 2024 stationary storage deployments, reflecting how policy targets translate directly into near-term volume.

Canada contributed roughly 15% of regional revenue, with Ontario and Quebec capturing the bulk via CAD 15 billion of combined incentives that attracted Stellantis, LG Energy Solution, and Volkswagen gigafactories scheduled to come online between 2025 and 2027. Upstream mineral strength anchors cathode-precursor projects, shortening supply lines for nickel and cobalt and reinforcing the nation’s strategic role in the North America battery market size calculus.

Mexico is growing quickest at a 28.6% CAGR, leveraging USMCA trade rules and lower labor costs to attract both automakers and mid-stream suppliers. Tesla’s Monterrey gigafactory and BYD’s site scouting in Nuevo León signal that announced capacity could quintuple to 50 gigawatt-hours by 2030 if water, electricity, and skilled-labor hurdles are resolved. Component makers—from separator film to electrolytes—are co-locating, mirroring the broader automotive supply-chain migration that has unfolded since the mid-1990s.