United States is facing a huge demand of Lithium batteries due to growing electrification in west with growing at the rate of 25.36% by 2028. Demand for lithium batteries in the US is expected to grow translate into $40 billion per year by the end of 2028, but still the country is expected to depend on imports for supply.
- According to Ken, the US lithium-Ion battery is expected to reach ~USD40 bn until 2028.
- Factors driving the US Lithium-Ion battery market are increasing degree of hybridization and electrification, heavy demands and sustainable development.
- Trending technological advancements like Lithium Ferro Phosphate in batteries is making it accessible and easily transferrable.
- Safety and storage is a major challenge in the way of Lithium ion markets in USA.
1. Growth of Lithium-Ion market in America is sky rocketing with ~25% CAGR.
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The US Lithium-Ion market is expected to grow from in ~14 billion in 2023 and grow at a CAGR of ~25% by 2028.USA is the largest country market with the maximum production of Lithium-Ion batteries in North America.
US Lithium-Ion market is growing due to high demands of e-vehicles and it act as the sustainable solution of major transport system. Also major car companies are switching from traditional batteries to Lithium ion batteries, which act as a major change for lithium ion batteries.
2. Which are the driving factors for the growth of Lithium-Ion market in USA?
Other driving factors of US Lithium-Ion Market
The usage of lithium batteries is expected to raise due to the penetration of electric vehicles. It is anticipated to provide a massive impetus for the industry’s growth in North America. The launching of various types of HEV’s and EV has led the increasing of hybridization and electrification. Until 2021, according to IEA, US has over 1.7 Mn EVs and over 500000 HEVs in 2019 and they continue to increase.
US is also to be expected to launch a range of EV models. In addition, falling lithium-ion battery prices and improving technology are expected to bring price-competitive electric vehicles to the market, creating demand for lithium-ion battery technologies in the near future.
High demand for sustainable development is also a leading factor for the growth of the market.
3. Is Lithium Ferro Phosphate is the new trend in US lithium battery market?
Click to know more about in US Funding on Electric vehicle recycling
The surge in demand for lithium iron phosphate (LFP) batteries in devices such as which are portable in nature and growing need for durable and efficient batteries are driving the growth of the segment.
Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022 making the market a highlight is USA. CAFE standards mandated fuel economy standards for passenger cars and Light Commercial Vehicles resulting in the expansion of electric drive technologies.
Government’s policies on environment friendly transportation is also a trending factor in rise of lithium battery products. The US Department of Energy announced in June that it was allocating more than $192 million in new funding for recycling lithium-Ion batteries from consumer products. In recognition of its ongoing importance in informing larger battery recycling efforts, DOE is announcing $7.4 million to fund a new Breakthrough Contest, as well as Phase IV of the Prize.
In February 2023, Ascend Elements announced a basic agreement with Honda Motor Co. Ltd to collaborate on stable procurement of recycled lithium-ion battery materials. Ascend is a United States-based battery recycling and engineered materials company. Yoshino Technology announced the development of solid-state lithium-ion batteries with outputs ranging from 330 W to 4,000 W designed for home backup, off-grid applications, and powering small industrial machinery.
4. Which are the obstacles in the growth in lithium-Ion market in US?
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Safety and storage in Lithium-Ion batteries is a major drawback in the lithium-Ion market. Heavy pricing of the vehicles using LI-ion batteries leads to the abstain in the market growth.
The production of Li-ion batteries is resource-intensive and can generate significant environmental impacts. In addition, Lithium, cobalt, nickel, and other key materials used in Li-ion battery production have faced significant supply chain disruptions and price fluctuations in recent years.
Aging of lithium-ion batteries and issues with overheating of lithium-ion batteries are projected to challenge the lithium-Ion battery market. Key players in this sector are Panasonic Corporation, Duracell Inc., Samsung SDI Co. Ltd, LG Chem Ltd and Tesla Inc.