Lithium-ion Battery Energy Storage Market Scope by 2031
The lithium-ion battery energy storage market size is projected to reach US$ 36.7 billion by 2031 from US$ 14.12 billion in 2023. The market is expected to register a CAGR of 12.7% during 2023–2031. The rise in demand for virtual power plants is expected to remain a key trend in the lithium-ion battery energy storage market.
Lithium-ion Battery Energy Storage Market Analysis
The growing demand for renewable power generation across the world is projected to fuel market growth during the forecast period. In addition, the growing establishment of solar and wind power plants in the regions including Asia Pacific, Europe, and North America is anticipated to fuel the demand for lithium-ion battery energy storage, which in turn is projected to drive the market growth from 2023 to 2031. Moreover, the growth of the electric vehicle (EV) industry across the globe to reduce carbon emissions in the transportation industry is projected to fuel the demand for renewable power generation and battery energy storage solutions, which will result in fueling the market growth in the analyzed timeframe.
Lithium-ion Battery Energy Storage Market Overview
The key stakeholders in the lithium-ion battery energy storage market are raw material providers, component manufacturers, lithium-ion battery energy storage manufacturers, and end users. The raw material supplier is a crucial stakeholder in the ecosystem of the lithium-ion battery energy storage market. Australia alone produces 52% of the world's lithium. Based on electrode materials, there are six different types of lithium cells: LFP, NMC, LCO, NCA, LTO, and LMO. The most prominent raw materials used for lithium-ion batteries are cathode materials, anode materials, electrolytes, separators, and current collectors. Based on the cell shape, there are three types of lithium-ion batteries- cylindrical, pouch, and prismatic, each with distinct battery performance parameters. Raw materials required for Lithium-ion battery energy storage systems include Nonferrous metals and minerals like lithium, cobalt, nickel, manganese, graphite, copper, and aluminum. The key lithium-ion battery manufacturers include A123 Systems LLC, Panasonic Corporation, SAMSUNG SDI Co, Toshiba Corporation, and others.
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Lithium-ion Battery Energy Storage Market: Strategic Insights
Market Size Value in US$ 7,972.80 million in 2022 Market Size Value by US$ 26,224.37 million by 2028 Growth rate CAGR of 13.9% from 2023 to 2028 Forecast Period 2023-2028 Base Year 2022
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Lithium-ion Battery Energy Storage Market: Strategic Insights
| Market Size Value in | US$ 7,972.80 million in 2022 |
| Market Size Value by | US$ 26,224.37 million by 2028 |
| Growth rate | CAGR of 13.9% from 2023 to 2028 |
| Forecast Period | 2023-2028 |
| Base Year | 2022 |
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Lithium-ion Battery Energy Storage Market Drivers and Opportunities
Increasing Number of Solar and Wind Energy Projects to Favor Market
The rise in the establishment of solar and wind energy projects across the globe to promote renewable energy-based power generation is expected to drive market growth in the coming years. The increase in capacity resulted from numerous government initiatives and support, including auctions, feed-in tariffs, net metering and contracts for difference. From 2021 to 2022, the governments of various economies made significant policies and target adjustments that impacted the growth of solar PV. For example, in July 2021, the European Commission proposed increasing the Union's renewable energy target from 32% to 40% by 2030. The REPowerEU plan further increased the target, increasing it to 45% in May 2022 (which would require 1,236). GW of installed renewable energy, including 600 GW of solar PV). The Inflation Reduction Act, a law that would increase support for renewable energy over the following decade through tax credits and other measures, was introduced by the U.S. federal government in August 2022. Such initiatives by the government aim at establishing solar and wind power projects are expected to drive market growth in the coming years.
Renewable Energy Projects in the Future
Battery storage systems (BESS) incorporating renewable energy offer enormous benefits such as energy self-sufficiency, cost efficiency, energy resilience, environmental benefits and grid support. This is why many industrialized countries are relying on renewable energies. As per the International Energy Agency (IEA), China is projected to add about half of the world's new renewable power capacity between 2022 and 2027, as BESS growth is expected to accelerate over the following five years despite the removal of subsidies for solar and wind energy. BESS can maintain a stable voltage range by injecting reactive power into the electrical grid. The system is important for renewable energy sources as their intermittent nature can cause voltage fluctuations. It can provide a black start feature that allows a power system to restart after a complete power failure.
Lithium-ion Battery Energy Storage Market Report Segmentation Analysis
Key segments that contributed to the derivation of the Lithium-ion battery energy storage market analysis are capacity, connection type, and end-user
- On the basis of capacity, the lithium-ion battery energy storage (LiBES) market is divided into 0-10 kW, 10-20 kW, 20-50 kW, and above 50 kW. The 10-20 kW segment held a larger market share in 2023.
- By connection type, the market is classified into on-grid and off-grid. The on-grid segment held the larger share of the market in 2023.
- In terms of end-use, the market is classified into residential, commercial, industrial, and utility. The utility segment held a significant share of the market in 2023.
Lithium-ion Battery Energy Storage Market Share Analysis by Geography
The geographic scope of the Lithium-ion battery energy storage market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South & Central America.
Asia Pacific is leading the market with a share of more than 43% in the year 2023. China is one of the prominent countries in the Lithium-ion battery energy storage market in the Asia Pacific. According to China's National Energy Administration (NEA), solar and wind energy production increased by 21%, reaching 1,190 TWh in 2022. This accounted for 13.8% of China's total electricity consumption, roughly equivalent to the consumption of all urban and rural households. In addition, supportive government policies will further expand the installation of renewable energy capacity. As per the People's Republic of China (PRC) State Council, China added a total capacity of 125 GW of solar and wind farms in 2022, bringing the total capacity to 1,213 GW, of which photovoltaics accounted for 87.4 GW. Such initiatives to develop solar and wind energy projects are expected to boost the lithium-ion battery energy storage market from 2023 to 2031.
Lithium-ion Battery Energy Storage Market Report Scope
Lithium-ion Battery Energy Storage Market News and Recent Developments
The Lithium-ion battery energy storage market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the Lithium-ion battery energy storage market are listed below:
- Morrow Batteries and ABB have signed two Memorandum of Understanding agreements to enhance their partnership and advance the shift to renewable energy sources and electrification across all sectors of society. As per the agreements, ABB has been selected as a non-exclusive preferred technology supplier for manufacturing and power supply to Morrow. The objective is to ensure that the planned giga factory at Eyde Energy Park in Norway becomes one of the most cost-effective and sustainable facilities globally. This partnership aims to leverage ABB's expertise and experience to optimize Morrow's manufacturing process and enable the production of high-quality, sustainable batteries. (Source: ABB Ltd, Press Release, September 2022)
- Exide Industries and its joint venture partner, Leclanche SA, have announced the launch of India's biggest lithium-ion battery plant in Gujarat. The plant has six automated assembly lines and an installed capacity of 1.5 GWh. It will focus on producing batteries for automobiles and energy storage applications. The joint venture company Nexcharge, released a statement confirming the start of mass production at the facility. (Source: Exide Industries Ltd, Press Release, May 2022)
Lithium-ion Battery Energy Storage Market Report Coverage and Deliverables
The “Lithium-ion Battery Energy Storage Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:
- Lithium-ion battery energy storage market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
- Lithium-ion battery energy storage market trends as well as market dynamics such as drivers, restraints, and key opportunities
- Detailed PEST and SWOT analysis
- Lithium-ion battery energy storage market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
- Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the Lithium-ion battery energy storage market
- Detailed company profiles
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Capacity, Connection Type, and End-use
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
Australia, Canada, China, France, Germany, India, Italy, Japan, MEA, Mexico, SAM, South Korea, Spain, United Kingdom, United States
Frequently Asked Questions
Asia Pacific dominated the Lithium-ion battery energy storage market in 2023.
The rise in demand for virtual power plants is the future trend of the Lithium-ion battery energy storage market.
NextEra Energy, Inc., KORE Power, Enel Green Power, Dragonfly Energy, Siemens Energy, ESS, Inc., Ameresco Solar, ACE Battery, Lithium Battery Company, and SAFT are some of the leading players in the Lithium-ion battery energy storage market.
US$ 36.7 billion estimated value of the Lithium-ion battery energy storage market by 2031.
12.7% is the expected CAGR of the Lithium-ion battery energy storage market.
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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