The IEA has reported on the growth of the global battery market. In 2024, as electric car sales rose by 25 per cent to 17 million, and annual battery demand surpassed 1TWh.

Coupled with this the average price of a battery pack for a battery electric car has dropped below $100 per kWh, a tipping point in many minds.

Lithium prices have dropped by more than 85 per cent from their peak in 2022 and after years of investments, global battery manufacturing capacity reached 3TWh in 2024. This pattern of growth is only likely to accelerate.

However, economies of scale, partnerships along the supply chain, manufacturing efficiency, and the capacity to bring innovations swiftly to market will be crucial growth. This will likely result in greater consolidation across the sector, which is simultaneously being reshaped by government-driven efforts to geographically diversify battery supply chains.

Perhaps of interest is the position of China as the top producer, which could be under threat as consolidation and international investment and collaboration could transform the market. Today, China produces cheaper batteries, and over three-quarters of batteries sold globally,

Yet to maintain or gain market share, these firms have been cutting their profit margins to sell batteries at lower prices, and price declines could slow in the near future.

In Europe the battery supply chain ecosystem is still relatively weak, and a lack of specialised workers persists, in part contributing to a higher cost of around 50 per cent, however as technology advances, it could become more competitive as long as domestic demand can be created.

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