Anode Material for Automotive Lithium-Ion Battery Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Anode Material for Automotive Li-ion Battery Market Data

Anode Material for Automotive Li-ion Battery Market Analysis

The global anode material for automotive lithium-ion battery market generated revenue of USD 1,074.2 million in 2023, and it is expected to progress with a CAGR of 6.0% during the forecast period 2024–2030, to reach USD 1,606.5 million by 2030. The increasing sales of electric vehicles, along with the continuous reduction in the prices of anode materials, is the key factor driving the market.

The surging adoption of electric vehicles across the world is the most important factor contributing to the high demand for electric vehicles’ batteries, which, in turn, is driving the growth of the market.

In 2023, the total electric car sales surpassed 14 million units, and it is expected that by 2030, the total fleet size will exceed 350 million units. Thus, with such massive growth expected for electric vehicle sales, the demand for their components and raw materials is also expected to increase. The rise in the adoption of electric vehicles is propelled by two major factors, namely, rising environmental concerns and government support.

Anode Material for Automotive Li-ion Battery Market Trends & Drivers

Inflow of Investments Is the Foremost Trend Observed

• During the charging process, the anode absorbs a large number of lithium ions. Graphite as an anode can handle this appropriately, but silicon as an anode expands more than 300%, which leads to cracks on the surface and energy storage performance dropping quickly.
• Lithium as anodes do not possess this problem like volume expansion, but they are costly and have other technical problems. As a result, original equipment manufacturers (OEMs) are shifting their focus to develop anode materials, having different concentrations of silicon.
• The OEMs and educational institutions are investing heavily in research and development (R&D) to produce more such materials, as they realize that the enhancement in lithium-ion batteries centers on increasing the abilities of its individual components.
• They have also developed many joint ventures, wherein the OEMs tied up or funded research programs of educational institutions working on the development of such products. These investments are made to create batteries with high power density, long lifecycle, low cost, high performance, and are environment-friendly.

Increasing Environmental Concerns Are Driving the Sales of Electric Vehicles

• Increasing concerns toward environmental protection, primarily due to the surging rate of ozone layer depletion, are driving the growth in electric vehicle sales around the world. For instance, globally, around 50 billion tons of greenhouse gases are emitted by each year.
• Environmental agencies’ concerns over air quality degradation caused by the increasing amount of exhaust fumes from vehicles are paving the way for various government initiatives, globally.
• Greenhouse gas emissions from urban vehicles have led to the formulation of stringent environmental policies by governments. Countries are taking initiatives to curb emissions by reducing the usage of fuel-based vehicles.
• Electric vehicles are an effective antidote for curbing the impact of pollution on the environment. The increasing use of electric vehicles would facilitate the reduction of the amount of carbon dioxide being emitted into the environment.
• National governments across different countries are actively taking steps to support the adoption of electric vehicles, which, in turn, is driving the growth of their components market, including anode materials. Some of the supportive initiatives include tax exemptions, purchase rebates, and financial incentives for the buyers of electric vehicles.
• For instance, the federal government in the U.S. provides an Internal Revenue Service (IRS) tax credit of up to USD 7,500 per new purchase of a qualified plug-in EV or fuel cell electric vehicle (FCV).
• The tax credit amount depends on the size of the battery capacity and vehicles. Due to expensive components, the overall price of electric vehicles is higher as compared to conventional vehicles.
• Government incentives, such as financial support, are enhancing the purchasing power of buyers, thus, increasing the adoption of electric vehicles, which, as a result, reduces air pollution by controlling carbon emissions, and boosts the rate of technological innovation.

High Cost of Lithium-Ion Batteries May Resist the Growth

• The high price of lithium-ion batteries is restricting the growth of its demand, which, in turn, is obstructing the demand for its components, including anode materials. A factor resisting the widespread adoption of lithium-ion batteries is their high cost, which is approx. 40% higher than nickel–cadmium batteries.
• Lithium-ion batteries though superior in performance and lighter in weight, cost is significantly higher than conventional batteries and thus increase the costs of products in which these are used.
• The increased costs of products not only restrain certain consumers from being able to purchase the products but also make it difficult for manufacturers to produce products that could be profitable due to low cost.
• Thus, the increased costs limit the penetration of lithium-ion batteries in low-income countries, where most of the population cannot afford such products.
• Though people living in developing economies are increasingly buying such products, due to increasing disposable income, the usage of expensive batteries in these countries has been more limited.
• Due to the high cost of lithium-ions, people may switch to some alternatives, which may negatively impact the market growth.
• Moreover, the cell is made up of an anode, cathode, electrolyte, housing, and separators. Due to the high costs of materials and production of the anode make the battery cost higher.
• Lithium-ion batteries are more prone to heat, which may lead to overheating or we can say lithium-ion batteries are sensitive to high temperatures and ultimately may catch fire, which may reduce the adoption of these batteries in the near future.

In-Depth Segmentation Analysis

Material Type Insights

• The artificial graphite category accounted for the largest size of around 40% in the anode material for automotive lithium-ion battery market in 2023, and it is projected to remain the largest during the forecast period as well.
• This is attributed to the benefits of this material over other anode materials such as enhanced power output and/or energy density, lower cost, and better recycling performance.
• However, in the forecast period, the LTO category is projected to advance with the highest growth rate. This can be buoyed by the fact that LTO enables faster charging of lithium-ion batteries and allows them to charge at a lower temperature, as compared to other categories.
• Furthermore, LTO prevents the occurrence of alloying of aluminum, which, in turn, permits the aluminum current collector to produce a considerably improved gravimetric capacity, compared to other materials.

Based on type, the market is divided into the following:

• Artificial Graphite (Largest Category)
• Natural Graphite
• Amorphous Carbon
• Lithium–Titanate Oxide (LTO) (Fastest-Growing Category)
• Silicon Compound

Vehicle Type Insights

• On the basis of vehicle type, the passenger car category dominates the market. This is led by a major push from governments in major automobile-selling countries, such as China and the U.S., for producing new energy cars and the rising demand for fully electric passenger cars with high-range per charge feature.
• Huge monetary incentives are being provided to both electric car manufacturers and end users to promote the adoption of passenger cars.

Further, the vehicle type segment is categorized into the following:

• Two-Wheeler
• Passenger Car (Largest Category)
• Commercial Vehicle (Fastest-Growing Category)

Vehicle Technology Insights

• On the basis of vehicle technology, the BEV category dominated the market during the historical period and accounted for around 50% volume share in 2023. This is mainly attributed to the fact that the demand for lithium-ion batteries is much higher in BEVs, as the average battery capacity of a BEV is much higher than PHEV and HEV.
• Moreover, unlike HEV and PHEV, BEV has only one source of power for its propulsion, which further contributes to the higher adoption of batteries and their components, including anode materials.

Vehicle technology is divided into further three categories:

• Hybrid Electric Vehicle (HEV)
• Plug-In Hybrid Electric Vehicle (PHEV)
• Battery Electric Vehicle (BEV) (Largest and Fastest-Growing Category)

Asia-Pacific is the Largest Revenue Contributor

• APAC is the largest contributor to the anode material for automotive lithium-ion battery market, and it is also projected to remain the largest market in the forecast period. The dominance of the region is driven by the huge demand for electric vehicles in China.
• This large market size of China is majorly due to the fact that government authorities here have been providing infrastructural support such as charging station spaces, offering incentives and subsidies, and pouring huge sums into the electric vehicle industry.
• Moreover, rising environmental concerns and decreasing total cost of ownership (TCO) are the major factors driving the demand for electric vehicles in the region, which, in turn, is positively affecting the growth of the market.
• On the other hand, Europe is expected to be the fastest-growing regional market with a CAGR of 6.5% during the forecast period. This can be mainly due to the high production and sales of electric cars (PHEV and BEV) in Norway and other European countries, such as Germany, France, and the U.K.
• Moreover, the European Union has planned its joint efforts with battery manufacturers and commercial lenders to build an ecosystem with a huge investment to become self-sufficient in battery production for the purpose of powering electric vehicles.\

Further, these regions and countries were analyzed for this report:

• North America
  • U.S. (Larger Country Market)
  • Canada (Faster-Growing Country Market)
• Europe (Fastest-Growing Regional Market)
  • Germany
  • U.K. (Fastest-Growing Country Market)
  • France
  • Norway (Largest Country Market)
  • Sweden
  • Netherlands
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (Largest Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Fastest-Growing Country Market)
  • Mexico (Largest Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

Competition Analysis

Electric vehicle manufacturers are currently more focused on securing the supply of lithium-ion batteries for the production of electric vehicles, as they are expecting the demand for electric vehicles, at an extensive rate, in the coming decade. Also, they are securing the supply of anode materials by partnering and collaborating with major battery manufacturers around the world.

Anode Material for Automotive Lithium-Ion Battery Industry News

• In December 2023, Panasonic Energy Co. Ltd. and Sila Nanotechnologies Inc., a manufacturer of battery materials, announced an agreement for Sila's nano-composite silicon anode, Titan Silicon. The battery of Panasonic is expected to make automobile manufacturers susceptible to give good EV performance.
• In October 2023, Epsilon Advanced Materials Pvt Ltd, a battery materials manufacturing company, announced its project to make a graphite anode manufacturing facility in North Carolina with a cost of USD 650 million.
• In September 2022, Trinseo PLC and Ferroglobe PLC announced the signing of an MOU to mutually produce high-silicon anode for electric vehicle batteries. The aim is to fulfill the demand by optimizing battery charge cycles with new, high-silicon anode solutions.