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Global Mechanicals Intelligence
Global Mechanicals Intelligence
BATTERIES
MARKET DYNAMICS
EXPLOSIVE EV ADOPTION
The EV sector primarily drives lithium-ion battery demand, consuming approximately 70% of global production. The projections indicate a robust 20% compound annual growth rate (CAGR) in EV sales through 2030. Leading manufacturers like Tesla and BYD, alongside traditional automakers, are accelerating EV production, driving up demand for high-energy-density lithium-ion batteries. Factors contributing to this surge include advancements in battery technology, increasing consumer awareness of environmental sustainability, and supportive government policies and incentives. These factors combine to create a market where the need for lithium-ion batteries will continue to increase dramatically.
ENERGY STORAGE SYSTEMS (ESS)
Grid-scale storage for renewables (solar/wind) is a significant growth area, with lithium-ion ESS installations expected to exceed 1 TWh globally by 2030. Expanding grid-scale ESS is crucial for integrating intermittent renewable energy sources like solar and wind, with lithium-ion batteries leading the way. This growth is bolstered by declining battery costs, improved energy density, and advancements in battery management systems, making large-scale storage economically viable. Government policies, such as renewable energy mandates and storage incentives, further accelerate this trend.
CONSUMER ELECTRONICS
Smartphones, laptops, and wearables continue to rely on lithium-polymer batteries, though growth here is slower (~5% CAGR) compared to EVs and ESS. This sustained demand is driven by the continuous evolution of these devices, featuring enhanced processing power, improved display technologies, and increased functionality, all requiring efficient and compact lithium-polymer batteries. Despite the relatively lower growth rate, the sheer volume of these devices ensures a significant and consistent market for lithium-polymer batteries.
PROCESS OVERVIEW
LITHIUM METAL
Electrode Preparation: Anodes are formed by lithium metal foil. Cathodes are created by coating a blend of active material and binder onto an aluminum collector, providing a stable electrochemical structure.
Assembly: Electrodes and a separator are layered and filled with electrolytes to facilitate ion transport. This assembly is placed in a protective casing with electrical connections.
Testing & Packaging: Batteries are tested for quality and performance, then packaged for distribution.
DRY CELL BATTERIES
Component Preparation: Zinc anodes are formed from powdered zinc and a binder. Cathodes consist of manganese dioxide, carbon black, and electrolyte paste. A separator and casing are also prepared.
Assembly: The anode is placed within the casing, surrounded by electrolyte paste and the separator. The cathode mixture is then packed in, and the battery is sealed.
Testing & Packaging: Batteries are tested for quality and performance, then packaged for distribution.
LITHIUM-ION BATTERIES
Electrode Preparation: Anodes are formed by coating a mixture of graphite and binder onto a copper current collector. Cathodes are created by coating a metal oxide blend and binder onto an aluminum collector.
Cell Assembly: Electrodes and a separator are layered or wound and then filled with electrolytes. This assembly is placed in a protective casing with electrical connections.
Formation: Controlled charging/discharging stabilizes materials and forms a protective layer crucial for performance and safety.
LITHIUM POLYMER BATTERIES
Electrode Preparation: Anodes and cathodes are made by coating a current collector (typically copper for the anode and aluminum for the cathode) with a mixture of active materials, polymer binders, and conductive additives. The active materials are similar to those used in lithium-ion batteries.
Cell Assembly: The anode, cathode, and porous separator are layered. Instead of a liquid electrolyte, a gel-like polymer electrolyte is used, which acts as both the separator and the ion conductor. This layered structure is then packaged in a flexible pouch.
Formation: the battery undergoes charge and discharge cycles to stabilize the materials and form the Solid Electrolyte Interphase (SEI) layer, like lithium-ion batteries. This is critical for long-term performance and safety.
RECENT DEVELOPMENTS
|
Date |
Battery Supplier/ Manufacturer |
End User (Company 2) |
Development Type |
Description |
Deal Value |
|
Jan-25 |
Clarios (US) |
Ford (US) |
Collaboration |
Clarios, the company behind OPTIMA Batteries, has announced an exciting new collaboration at the pinnacle of off-road racing - the Dakar Rally. Partnering with the legendary Ford Performance team, OPTIMA Batteries will join one of the world’s most gruelling off-road races to back a four-vehicle racing effort. |
- |
|
Jan-25 |
Panasonic Energy (Japan) |
Lucid Group, Inc. (US) |
Contract |
Panasonic Energy Co., Ltd. And Lucid Group, Inc. (NASDAQ: LCID) announced the highly anticipated Lucid Gravity Grand Touring, that will be powered by Panasonic Energy’s lithium-ion EV battery cells. With an EPA-estimated range of up to 450 miles from a battery pack that is up to 40% smaller than competitors’, the collaborative efforts between Panasonic and Lucid have helped deliver an SUV with a previously impossible combination of outstanding range, performance, and interior space. |
- |
|
Jan-25 |
LG Energy Solutions (South Korea) |
Aptera (US), CTNS (South Korea) |
Partnership |
LG Energy Solution announced its exclusive partnership to supply cylindrical batteries to Aptera Motors Corp. (Aptera). The agreement follows the signing of a three-party Memorandum of Understanding (MoU) between LG Energy Solution, Aptera, and CTNS. The three companies will collaborate on battery supply and business development to drive future growth opportunities. Under this MoU, LG Energy Solution will exclusively supply 2170 cylindrical battery cells from 2025 to 2031 to power Aptera’s solar EV, the ‘Aptera’, aimed to launch in the U.S. market in 2025. |
- |
|
Jan-25 |
Clarios (US) |
Undisclosed (Automotive Manufacturer) |
Agreement |
Clarios has secured an additional contract with a major U.S. automotive manufacturer to supply its advanced hAGM batteries for a 2028 full-size SUV series. This agreement includes some of the industry’s most recognized and top-selling SUV models. |
- |
|
Dec-24 |
LG Energy Solutions (South Korea) |
JSW Energy (India) |
Business Expansion |
LG Energy Solutions is in talks with India's JSW Energy to manufacture batteries for electric vehicles and renewable energy storage in a joint venture that would need an investment of over $1.5 billions. |
$ 1.5 Bn |
|
Dec-24 |
CATL (China) |
- |
Business Expansion |
CATL will get into battery swapping in China in a big way starting next year. The idea behind battery swapping is to refuel quickly, similar to filling a conventional car with gas. Instead of waiting for the batteries to recharge, one swaps out the old ones with a block of fresh ones at a swap station. An EV driver pulls into a swapping station, and automated technology exchanges the low battery for a fully-charged one the station has available. China-based CATL announced plans to open 1,000 swap stations next year in China, including in Hong Kong and Macao, with a long-term goal of 10,000 stations built with partners. |
- |
|
Dec-24 |
Stellantis (Netherlands) |
CATL (China) |
Agreement (Joint Venture) |
Stellantis and CATL announced they have agreed to invest up to €4.1 billion to form a joint venture that will build a large-scale European lithium iron phosphate (LFP) battery plant in Zaragoza, Spain. Designed to be completely carbon neutral, the battery plant will be implemented in several phases and investment plans. Targeted to start production by end of 2026 at Stellantis’ Zaragoza, Spain site, the facility could reach up to 50 GWh capacity, subject to the evolution of the electrical market in Europe and continued support from authorities in Spain and the European Union. |
$ 4.27 Bn (€4.1 Bn) |
|
Nov-24 |
BYD (China) |
- |
Product Development & Launch |
Chinese EV giant BYD has launched what an executive claimed is the ‘world’s first high-performance’ sodium-ion battery energy storage system (BESS) product, using its proprietary form factor Long Blade Battery cell. |
- |
|
Nov-24 |
VARTA AG (Germany) |
- |
Product Development & Launch |
Under the European ECO2LIB research project, VARTA AG has developed a new generation of energy storage systems. After four years of intensive research, in November 2024, VARTA AG launched a highly innovative: Longer-lasting, more efficient, and more cost-effective lithium-ion batteries. These are particularly interesting for homeowners who want to store and utilize their own solar power. |
- |
|
Nov-24 |
Saft (France) / TotalEnergies (France) |
- |
Product Development & Launch |
Saft, a subsidiary of TotalEnergies, has introduced its new lithium-ion (Li-ion) battery for aviation. The 28-volt (V) lithium-ion battery stores over twice the energy in the same weight and one and a half times the energy in the same volume than a lead acid battery, according to company officials. |
- |
|
Oct-24 |
Clarios (US) |
Altris (Sweden) |
Agreement (Joint Venture) |
Clarios announced a strategic investment in Altris with the aim of manufacturing low-voltage, sodium-ion (Na-ion) batteries for the automotive sector. This equity stake builds on a joint development agreement (JDA) between Clarios, producer of one in three of the world’s low-voltage car batteries, and Altris, a leader in sodium-ion cathode material and battery cell technology, focused on low-voltage Na-ion batteries. |
- |
|
Oct-24 |
CATL (China) |
Indonesia Battery Corporation (IBC) |
Business Expansion |
Formed a joint venture (JV) firm to build a battery cell manufacturing plant |
- |
|
Oct-24 |
LG Energy Solutions (South Korea) |
Ford (US) |
Supply Agreement |
LG Energy Solution to supply battery modules from its Poland facility for Ford’s commercial vans in the UK and EU markets |
- |
|
Oct-24 |
LG Energy Solutions (South Korea) |
Mercedes Benz (Germany) |
Supply Agreement |
LG Energy Solution signed a deal to supply electric vehicle (EV) batteries to a Mercedes-Benz affiliate in North America |
- |
|
Sep-24 |
Saft (France) / TotalEnergies (France) |
Grenergy (Spain) |
Business Expansion |
Saft, a subsidiary of Total Energies, has commissioned a new line at its Jacksonville factory in Florida to produce the lithium-ion (Li-ion) battery containers that form the heart of energy storage systems (ESS). This investment enables Saft to address the booming US demand for ESS projects by offering a solution with domestic content. It will also create new job opportunities, both direct and indirect, as well as strengthening the national supply chain. |
- |
|
Sep-24 |
BYD (China) |
Grenergy (Spain) |
Supply Agreement |
Strategic agreement for the supply of large-scale energy storage systems for project Oasis de Atacama, in Chile |
- |
|
Sep-24 |
Panasonic Energy (Japan) |
- |
Business Expansion |
Panasonic Energy announced that they have finalized preparations for the mass production of the 4680 cylindrical automotive lithium-ion batteries |
- |
|
Sep-24 |
Lithium Australia |
BYD (China) |
Agreement |
Agreement to provide battery recycling services. |
- |
|
Jul-24 |
Tata Technologies (India) |
Undisclosed Global EV Battery Manufacturer |
Contract |
Contract for battery design & development |
- |
|
Apr-24 |
CATL (China) |
Hyundai Motor Group (China) |
Partnership |
Strategic Partnership to co-operate on Beijing Hyundai's electric vehicle projects and power Beijing Hyundai's future EV models with CATL batteries. |
- |
Source: Press releases & company websites
DEMAND/SUPPLY OVERVIEW
DEMAND COMMENTARY
China:
- China produces ~80% of global lithium-ion batteries, with giants like CATL and BYD leading innovation.
- Cylindrical battery shipments (e.g., 4680 cells) will exceed 400 GWh by 2030 (50%+ CAGR).
- Aggressive expansion in LiFePh production should reduce reliance on nickel and cobalt.
Europe:
- Localizing supply chains to meet EU mandates (e.g., 2035 ICE ban). Northvolt (Sweden) and Verkor (France) are building gigafactories with $5B+ investments.
- Recycling initiatives (e.g., Hydrovolt in Norway) aim to recover 95% of battery materials by 2030.
United States:
- Inflation Reduction Act (IRA) subsidies incentivize domestic production, attracting $55B+ in battery investments (e.g., Panasonic's Kansas gigafactory for Tesla).
- Focus on securing lithium from projects like Thacker Pass (Nevada) and partnerships with Canada/Australia.
Asia-Pacific:
- South Korea: LG Energy Solution, SK On, and Samsung SDI are investing $35B+ in U.S. and EU gigafactories to bypass IRA localization rules.
- Indonesia: Leveraging nickel reserves (25% of global supply) to become a key LFP and NMC producer, supported by Hyundai and CATL investments.
SUPPLY ANALYSIS
- Overall lead times have not significantly changed; keep flat at 30-45 days for lithium metal batteries and 45–60 days for lithium rechargeable batteries.
- The supply base remains stable, with no signs of suppliers exiting the market — lower supply risk for this commodity in the near future.
- Cobalt and nickel face ESG scrutiny, driving shifts to LFP and manganese-based chemistries.
PRICING SITUATION
- Battery-grade lithium-carbonate prices are at ~80,000 CNY/T (~ 11,200 USD/T) since Q3'2024, the lowest in nearly four years. Lithium carbonate prices change every 10,000 CNY/T (~ 1,400 USD/T), impacting the cost of lithium rechargeable cells by about 1%. Lithium hydroxide is produced from a chemical reaction between lithium carbonate and calcium hydroxide. The biggest lithium producers are Chile, China, Australia, and Argentina. China, Japan, South Korea, and the United States are the largest lithium importers.
- Cobalt decreased by 2,750 USD/T or 11.32% since the beginning of 2025. By far, the biggest producer of cobalt is DR Congo (more than 50%), followed by Russia (4%), Australia, the Philippines, and Cuba.
- Cathode material (Li, Ni, Co, Mn) contributes 50% of cell cost, and Anode material (C) contributes another 12%. Cost reduction opportunities are decreasing since primary raw materials costs have been in a low range for several months.
KEY TAKEAWAYS
- The lithium battery market is projected to grow from $100Bn (2025) to $400Bn+ by 2030, driven by EVs and ESS.
- LFP batteries will dominate ESS and budget EVs, while NMC retains premium EV markets.
- 4680 Cylindrical Cells: Tesla’s “tabless" design improves energy density and reduces costs by 15–20%, with BAK Battery and Panasonic ramping production.
- Solid-State Lithium Batteries: Toyota and QuantumScape target commercialization by 2026–2028, promising 2x energy density and enhanced safety.
- Sodium-Ion Hybrids: CATL's sodium-lithium hybrid batteries offer low-cost alternatives for ESS and entry-level EVs, easing lithium supply pressures.
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