Rise of the Electric Vehicle Battery Market and its Roadblocks

Mar 13, 2023
Authored by: Chandan Kumar GV, Head, Products


The electric vehicle (EV) battery industry has witnessed significant growth in recent years, driven by increasing demand for EVs and advancements in battery technology. According to the International Energy Agency (IEA), the first quarter of 2022 saw a 75% increase in EV sales compared to the same period in 2021.1 This, combined with advancements in battery technology, contributed to a market value of $56.4 billion in 2022.2


EV Battery Market Growth

Figure 1: EV Battery Market Growth2

However, this growing demand has outpaced the supply of EV batteries, leading to shortages of key battery components, and slowed production at battery factories. There are several other challenges being faced by the EV battery industry, including:


Lithium is a key component in lithium-ion batteries, which are widely used in EVs. According to a report by IEA, the world could face lithium shortages by 20254. Another critical element is graphite, which is used in making anodes of EV batteries. As the trend towards electric vehicles continues and new sources of these minerals are not discovered, the demand for graphite specifically is expected to grow four-fold. This has led to projections that the graphite market could face a deficit as soon as this year, with the shortage projected to reach 8 million metric tons by 20405.


Battery performance and durability pose a significant challenge for the industry. EV batteries typically have a lifespan of 8-10 years, depending on usage and charging patterns, with manufacturers usually giving a guarantee of 5 to 8 years on EV batteries.6 As the battery’s capacity degrades over time, it can impact the vehicle’s range and performance. Additionally, the industry is facing concerns on how the batteries will perform under extreme temperatures and how to properly recycle and dispose of them as they contain hazardous materials.


Chinese electric vehicle (EV) battery makers dominated the global market in 2022, with six companies featuring among the world’s top 10 players and accounting for a 60.5% share amid a doubling of EV sales on the mainland. Below is a list of the dominant market players:

  • Contemporary Amperex Technology (CATL), is the world’s largest EV battery producer. CATL installed 165.7 gigawatt hours (GWh) of battery cells from January to November in 2022, 8% more than the same period in 2021. The company’s global market share rose from 32.8% at the end of 2021 to 37.1% in 2022.
  • BYD, Shenzhen-based EV and battery maker ranked second. Its installation volume jumped 168.3% to 60.6 GWh, taking a 13.6% share of the global market, compared with 8.8% in 2021. Berkshire Hathaway owned 14.9% of BYD’s Hong Kong-listed stock as of December 8, 2022.
  • Besides CATL and BYD, CALB, Gotion High-tech, Sunwoda, and Eve Energy feature among the world’s top 10 EV battery makers with market share of 4%, 2.8%, 1.7%, and 1.3% respectively.


The dominance in the market by few players can cause supply limitations and potentially result in high prices.

The EV battery industry has seen significant growth in recent years, driven by increasing demand for EVs and advancements in battery technology. Addressing these challenges will be critical to the continued growth and success of the EV battery industry.

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1.IEA 2.MarketsandMarkets 3.Global Newswire 4.IEA  5.Mining.Com 6.EDF Energy 7.South China Morning Post