Global Lithium-ion Battery Demand

As one of the most transformative energy storage technologies in the 21st century, lithium-ion batteries are reshaping the global energy landscape and industrial ecology at an unprecedented speed. This article will comprehensively analyze the multiple factors that drive the explosion of lithium-ion battery demand, including the three core driving forces of the electric vehicle revolution, the surge in demand for energy storage systems, and the continuous innovation of the consumer electronics market. Through in-depth analysis of market dynamics, technological evolution, and global regional development trends, it reveals how the lithium-ion battery industry has moved from a single consumer electronics application to a diversified outbreak stage, and looks forward to the opportunities and challenges facing the industry in the next five years. It is particularly noteworthy that driven by the goal of carbon neutrality, the global lithium battery market is ushering in a historic turning point. It is expected that the demand growth rate will reach 22%-30% in 2025, and the supply and demand relationship will shift from excess to balance or even tight, and all links in the industrial chain will undergo deep reconstruction. This analysis will help readers grasp the investment direction, technical path and market changes of the lithium battery industry, and understand how this strategic industry has become the core pillar of the global energy transformation.

Overview of global lithium-ion battery market demand
The lithium-ion battery market is experiencing an unprecedented growth phase, and global demand is showing an accelerating upward trend. According to the latest research data from Huatai Securities, CITIC Construction Investment and other institutions, global lithium-ion battery demand is expected to reach 1544GWh in 2024, and will further climb to 1937GWh by 2025, with an annual growth rate of between 22% and 30%. This significant growth marks that the lithium battery industry has gradually shifted from the oversupply state of the past three years to a new stage of supply and demand balance or even tightness. It is expected that the second quarter of 2025 will usher in a fundamental reversal of the supply and demand relationship.
From the perspective of market structure, lithium-ion battery demand mainly comes from three major areas: electric vehicles, energy storage systems and consumer electronics. Among them, electric vehicles dominate, accounting for about 70-75% of total demand; energy storage applications have grown the fastest, with an annual growth rate of nearly 50%; and the traditional consumer electronics market has maintained steady growth, accounting for about 10-15%. This diversified demand structure provides strong support for the lithium battery industry and reduces the impact of single market fluctuations on the overall industry.
In terms of geographical distribution, China continues to lead the global lithium battery market, with electric vehicle sales expected to reach 13 million in 2024 and 15.6 million in 2025, an increase of about 20%. Driven by strict carbon emission policies, the European market is expected to increase electric vehicle sales from 2.95 million to 3.52 million in 2025, an increase of 15-20%. In contrast, the US market growth is relatively mild, with sales expected to be 1.6 million in 2024, an increase of about 8%. It is worth noting that investment in large-scale energy storage projects in the Middle East is becoming a new growth point.
From the perspective of the industrial chain, the lithium battery industry has entered a relatively mature stage. Huatai Securities' report pointed out that the lithium battery sector will usher in a new peak in 2025, and prices in multiple links of the industrial chain will show signs of stabilization, and some companies are expected to achieve both volume and price increases. Especially in terms of new technologies, solid-state batteries continue to advance testing and are expected to achieve commercial production in 2025; composite aluminum foil technology will also be mass-produced next year, which will have a positive impact on battery performance and cost.
Technological innovation and policy drive are forming a double acceleration effect. Europe will implement stricter carbon emission assessments in 2025, which will further increase the penetration rate of new energy vehicles. At the same time, the support policies of various countries for renewable energy have also directly stimulated the demand for energy storage batteries. On the supply side, after two years of price decline, the price of lithium battery materials has hit the bottom, and it is expected to start to recover in the fourth quarter of 2024, and may usher in a price increase cycle in 2025.
This round of lithium battery demand growth is different from the past, and behind it is the deep logic of the global energy structure transformation. As climate change issues become increasingly severe, electric vehicles and energy storage systems are seen as key solutions to environmental challenges, which will not only promote economic development, but also promote a more sustainable future. As the core carrier of this transformation, the market demand growth of lithium-ion batteries has long-term and structural characteristics, rather than short-term fluctuations.

Electric vehicle revolution: the primary driving force of lithium-ion battery demand
The rapid development of electric vehicles has become the core engine of lithium-ion battery demand growth. The global automotive industry is undergoing an unprecedented electrification transformation in a century, and this process has had a profound impact on the lithium battery market. Data shows that China's electric vehicle sales are expected to reach 13 million units in 2024, a year-on-year increase of 36%; in 2025, it will further increase to 15.6 million units, an increase of 20%. Such a huge market size has directly driven the exponential growth of power battery demand, making the electric vehicle sector account for more than 70% of the global lithium-ion battery demand.
Policy-driven plays a key role in the global popularization of electric vehicles. China has significantly stimulated electric vehicle consumption through the "old for new" subsidy policy, while Europe has adopted a more stringent carbon emission assessment mechanism, forcing automakers to accelerate the transformation to electrification. According to analysis, Europe will implement an industry-wide non-penalty sales target of 3.52 million units in 2025, and even under particularly conservative expectations, it will reach 3.4 million units, a year-on-year increase of 15%-20%. This "carrot and stick" policy combination is forming an institutional advantage for the promotion of electric vehicles worldwide, providing a stable and lasting growth foundation for lithium battery demand.
From the perspective of technological evolution, the electric vehicle market presents a diversified development trend. Leading companies such as Tesla continue to stimulate demand through process improvements and model modifications, while traditional automakers accelerate the launch of electric platform models to cope with market competition. It is worth noting that the increase in the penetration rate of fast charging technology is gradually solving the "mileage anxiety" problem of electric vehicles, and the development of lithium-sodium mixing technology has also provided a new path to reduce costs. These technological advances have not only expanded the user base of electric vehicles, but also promoted the standardization and large-scale production of battery specifications, further reducing unit costs.
Regional market differentiation is becoming increasingly obvious. The Chinese market maintains its leading position with a sound supply chain and policy support, the European market relies on environmental protection regulations to advance steadily, and the US market is relatively conservative due to policy ambiguity and may remain flat in 2025. This differentiation has prompted battery manufacturers to adopt a regionalization strategy and establish production bases near major automobile consumer markets to reduce transportation costs and supply chain risks. For example, the construction of battery production capacity in Europe is accelerating to reduce dependence on Asian suppliers.
The prosperity of the electric vehicle market has also driven an investment boom in the upstream of the industrial chain. With the surge in demand for power batteries, mining and processing projects of key raw materials such as lithium, nickel and cobalt have attracted much attention. However, the current lithium industry is still in the stage of price bottoming out, and the price of battery-grade lithium carbonate has fallen 65% from its high in 2023, and the price center in 2024 is 91,000 yuan/ton. Although this price decline squeezes the profits of mining companies in the short term, it will help reduce battery costs in the long run and further promote the popularization of electric vehicles.
In the future, the demand for lithium-ion batteries in the electric vehicle market will be characterized by both quality and quantity. On the one hand, sales growth directly drives the demand for battery quantity; on the other hand, consumers' pursuit of driving range and fast charging capabilities has led to the continuous improvement of battery energy density. As the next generation technology, solid-state batteries are continuously advancing testing and are expected to be commercially produced in 2025, which will bring a qualitative leap in the performance of electric vehicles. At the same time, the mass production and application of new materials such as composite aluminum foil are also expected to further improve battery performance and reduce costs, forming a benign technology iteration cycle.
It is worth noting that the inventory cycle in the electric vehicle market will also affect the short-term demand for lithium batteries. In early 2025, there may be a "non-off-season" situation. The leading battery manufacturers have begun to increase the scale of production, indicating that the demand recovery cycle has arrived. Although this fluctuation will not change the long-term growth trend, it requires all links in the industrial chain to have stronger flexible response capabilities to avoid drastic price fluctuations caused by supply and demand mismatches.

Energy storage system demand: the second pole of lithium-ion battery growth
Energy storage applications are rapidly emerging as the second largest pillar of lithium-ion battery demand, and its growth rate has even surpassed that of the electric vehicle sector. According to a research report by CITIC Securities, the energy storage market is expanding at an annual rate of nearly 50%, and it is expected that by 2025, the global demand for lithium batteries for energy storage will exceed 400GWh. This explosive growth has significantly increased the proportion of energy storage in the total demand for lithium batteries, transforming it from an auxiliary role to an industry growth pole, and together with electric vehicles, it has formed the "double wheels" driving the lithium battery market.
Renewable energy integration is the core logic of the growth of energy storage demand. As the global wind power and photovoltaic installed capacity continues to expand, their intermittent power generation characteristics have posed severe challenges to the stability of the power grid. Lithium-ion batteries, with their high energy density, rapid response and modular deployment advantages, have become an ideal solution for smoothing the output of renewable energy. Data shows that the global new energy storage installed capacity is expected to reach 220-250GWh in 2025, of which the Chinese market accounts for about 120GWh and the US market is between 55-70GWh. This development model that emphasizes both centralized and distributed power provides diversified scenarios for the application of lithium batteries in the field of energy storage.
Grid modernization is another important source of energy storage demand. Developed countries generally face the problem of aging grid infrastructure, while emerging economies need to build more flexible and efficient power systems. Lithium battery energy storage systems can provide a variety of grid services such as frequency regulation, backup capacity, and voltage support, and their economic efficiency is becoming increasingly prominent as costs fall. It is particularly noteworthy that large-scale energy storage projects in the Middle East are about to enter the implementation stage. The launch of this emerging market will significantly increase regional lithium battery demand and change the traditional demand pattern dominated by China, the United States and Europe.
The impact of policy mechanisms on the energy storage market is particularly significant. China's "new energy mandatory storage" policy requires that wind power and photovoltaic projects must be equipped with a certain proportion of energy storage systems, which directly creates large-scale demand. The United States uses fiscal tools such as investment tax credits (ITC) to reduce the cost of energy storage projects and improve economic efficiency. In Europe, ambitious renewable energy targets and carbon reduction commitments have also promoted energy storage deployment. These policies not only stimulate current demand, but also establish an institutional framework for long-term market development, making energy storage an indispensable part of the power system.
Technological progress and cost reduction have formed a virtuous cycle for the promotion of energy storage. In 2024, the price of some links of lithium batteries has shown signs of stabilization, and the cost competitiveness of energy storage systems has been further enhanced. At the same time, the improvement of battery cycle life has significantly reduced the cost of the entire life cycle, making energy storage economically feasible in more application scenarios. It is worth noting that the development of lithium-sodium mixed technology may bring new options to the energy storage field, especially in large-scale energy storage projects that do not require high energy density but are cost-sensitive.
The development of the energy storage market has also driven business model innovation. In addition to traditional large-scale grid-side energy storage projects, new business formats such as user-side energy storage, shared energy storage, and virtual power plants continue to emerge. These models further expand the application space of lithium batteries in the field of energy storage by aggregating distributed resources and providing diversified service value. With the deepening of power market reform, the mechanism for energy storage to participate in the auxiliary service market and energy market has been gradually improved, and its commercial feasibility will continue to improve, forming a positive feedback of demand growth.
Different energy storage application scenarios have put forward differentiated requirements for battery technology. Grid-level energy storage pays more attention to cycle life and safety, and has relatively loose requirements for energy density; household energy storage balances energy density, safety and cost; while industrial and commercial energy storage often requires rapid response capabilities. This diversity has led to the differentiation of battery technology routes. Lithium iron phosphate (LFP) batteries have been widely used in the energy storage field due to their long life and high safety, while ternary batteries remain competitive in specific scenarios that require high energy density.
The development of the energy storage market in the future will face two major turning points: First, the US tariff policy in 2026 may lead to an increase in inventory at the end of 2025, causing short-term demand fluctuations; second, as the penetration rate of renewable energy exceeds the critical point, energy storage will change from "icing on the cake" to "indispensable", and the demand growth curve may be steeper. The energy storage industry is shifting from policy-driven to market-driven. This shift will reshape the structure of lithium battery demand and may change the value distribution of each link in the industrial chain.
The booming energy storage market provides long-term demand support for lithium-ion batteries, complementing the electric vehicle market. When the growth rate of electric vehicles naturally slows down as the penetration rate increases, energy storage is expected to take over the growth baton and maintain the expansion momentum of the lithium battery industry. This diversified demand structure enhances the lithium battery industry's ability to resist fluctuations in a single market and provides investors and technology developers with more stable long-term expectations.

Consumer electronics and emerging applications: a stable source of demand for lithium-ion batteries
Although electric vehicles and energy storage systems have attracted a lot of attention, the consumer electronics market remains an important cornerstone of lithium-ion battery demand. Consumer electronics products such as smartphones, laptops, tablets, and wearable devices constitute the "basic plate" of lithium batteries. Although the growth rate is not as fast as the first two application areas, it provides a stable and high value-added market demand. This field accounts for about 10-15% of the total global demand for lithium-ion batteries. Its characteristics are small single-machine usage but huge total volume, and extremely high requirements for battery energy density and safety.
The consumer electronics market is innovation-driven. Trends such as the popularization of 5G mobile phones, the rise of folding screen devices, and the development of AR/VR devices continue to increase device power consumption, prompting manufacturers to adopt larger capacity batteries or higher energy density solutions. At the same time, consumers' pursuit of thin and light design has prompted batteries to develop higher energy density, promoting the first application of advanced materials such as silicon-based negative electrodes and high-nickel positive electrodes in the field of consumer electronics. This technological iteration not only meets existing needs, but also continuously creates new application scenarios. Emerging product categories such as wireless headphones and smart watches have brought incremental space to the lithium battery market.
High-end products are another feature of the demand for lithium batteries in consumer electronics. Unlike power batteries that pursue economies of scale, consumer electronics batteries emphasize performance advantages and differentiated designs, so profit margins are usually higher. Apple, Samsung and other leading manufacturers optimize equipment performance by customizing battery designs. This customization trend has enabled the consumer electronics battery market to form a relatively independent technology evolution path and supply chain system. It is worth noting that the increased penetration of fast charging technology in the consumer electronics field has also put forward new requirements for battery material systems and structural design.
Emerging application areas are creating incremental space for lithium-ion batteries. The demand for high-power batteries for products such as power tools, drones, and electric bicycles continues to grow, forming a "medium-sized battery" market between consumer electronics and electric vehicles. The special demand for high-reliability and long-life batteries for medical electronic equipment has also opened up high-value-added market segments. Although the individual market size of these applications is not large, the collective effect is significant, and they are generally less price sensitive, providing battery manufacturers with opportunities for differentiated competition.
The seasonal characteristics of the consumer electronics market significantly affect the fluctuations in lithium battery demand. The third quarter is usually the peak season for stocking up in preparation for the end-of-year shopping season in Europe and the United States. This cyclicality complements the changes in demand in the electric vehicle and energy storage markets to a certain extent, which helps to smooth the capacity utilization rate of the lithium battery industry chain. However, global macroeconomic fluctuations have a greater impact on the consumer electronics market. When consumer confidence declines, the purchase of non-essential electronic products is often the first to be affected. This sensitivity makes the demand for consumer electronics lithium batteries a "barometer" for observing economic health.
Supply chain strategy is particularly critical in the field of consumer electronics batteries. Unlike the large-scale centralized production of power batteries, consumer electronics batteries emphasize flexible response and regional matching. The "one-place supply and one-place production" strategy promoted by Apple and other companies has prompted battery suppliers to establish production bases near major consumer markets around the world. This decentralized layout increases the resilience of the supply chain, but also increases the complexity of management. In recent years, consumer electronics manufacturers have paid more attention to the sustainability of the supply chain, requiring battery suppliers to disclose carbon footprints and responsible mineral procurement, which is reshaping the upstream material supply pattern.
The trend of technological integration is creating cross-border application opportunities for lithium-ion batteries. Advanced battery technologies developed in the consumer electronics field tend to gradually penetrate into the electric vehicle and energy storage fields. For example, silicon negative electrode technology is gradually being promoted to the electric vehicle field after it was initially mature in consumer electronics applications. Similarly, the cost reduction brought about by the scale effect of electric vehicles also enables consumer electronics to adopt higher-performance battery solutions. This technology flow has accelerated the pace of innovation in the entire industry and formed a benign interactive development pattern.
In the future, the demand for lithium-ion batteries in consumer electronics will show a polarized trend: on the one hand, mainstream products continue to pursue higher energy density and faster charging speeds; on the other hand, emerging IoT devices require ultra-low power consumption and miniaturized solutions, which may give rise to new developments in micro-batteries or energy harvesting technologies. This differentiation will promote the diversification of battery technology routes and provide more market opportunities for innovative companies. At the same time, the modular design trend of consumer electronics products may change the way batteries are integrated, from non-removable to more convenient replacement and recycling, which will affect the product design and business model of batteries.
Although the proportion of consumer electronics in the total demand for lithium-ion batteries has declined relatively, its strategic value as a technology incubator and high-profit market cannot be ignored. Many new battery materials and structural designs are often verified in the consumer electronics field before being promoted to other fields. At the same time, the high threshold and brand concentration of the consumer electronics market provide a stable source of profits for battery manufacturers with technological advantages, and these profits can feed back R&D investment to form a positive innovation cycle. In the foreseeable future, consumer electronics will continue to be an indispensable and important application field for lithium-ion batteries.

Market dynamics and future trends: turning points and opportunities in the lithium battery industry
The lithium-ion battery industry is standing at a historic turning point, and the supply and demand pattern, technical routes and market competition situation are undergoing profound changes. According to industry analysis, 2025 will become a key watershed in the lithium battery market. It is expected that the global demand growth rate will reach 22%-30%, and it is expected to achieve the first reversal of supply and demand balance in three years in the second quarter. This change will not only affect the short-term market performance, but also reshape the long-term development trajectory of the industrial chain.
The reconstruction of supply and demand relations is the most significant market change at present. After two years of price decline, the price of lithium battery materials has hit the bottom, and signs of stabilization will begin to appear in the fourth quarter of 2024. Huatai Securities' report pointed out that prices in many links of the lithium battery industry chain have stabilized, the supply and demand relationship is tight, and some companies are expected to achieve a simultaneous increase in volume and price. This improvement in supply and demand is mainly due to strong growth on the demand side, especially the simultaneous expansion of the electric vehicle and energy storage markets. It is worth noting that there are also positive signals on the supply side. Upstream mines have begun to adjust their production capacity due to price pressure, and four high-cost mines in Australia have been shut down one after another. This self-discipline in supply will help accelerate market clearing.
Price repair will become the main theme in 2025. CITIC Securities predicts that the price of lithium battery materials will enter the repair range, especially some materials with meager profits at present, such as copper foil, lithium hexafluorophosphate and lithium iron phosphate, which may usher in a price increase cycle in 2025. This price rebound is not a short-term fluctuation, but the result of a fundamental improvement in the supply and demand structure. According to research by China Merchants Bank, although the lithium industry will still be in the bottoming stage in 2025, the supply-demand gap has narrowed compared with 2024, providing upward momentum for prices. However, the extent of the price rebound may be limited, because once the price rises, the suspended enterprises may choose to resume production, thereby suppressing further room for growth.
The acceleration of technological iteration is reshaping the industry's competitive landscape. The commercialization of solid-state batteries continues to advance, and it is expected that small-scale mass production may be achieved in 2025, which will open the prelude to the competition for the next generation of battery technology. At the same time, composite aluminum foil technology is ready for large-scale mass production, which is expected to improve battery performance and reduce costs at the same time; lithium-sodium mixing technology provides new ideas for resource diversification. These technological innovations not only affect product performance, but also change the value distribution of the industrial chain. The choice of material system and process route may determine the future market position of enterprises. It is worth noting that the increase in the penetration rate of fast charging technology is becoming the focus of differentiated competition, promoting the comprehensive innovation of electrode structure, conductive network and thermal management system.
Regional market differentiation brings new challenges to global layout. As the largest lithium battery production and consumption market, China's electric vehicle sales are expected to reach 15.6 million in 2025, and the domestic market continues to prosper. Europe has grown steadily driven by carbon emission policies, while the US market has been relatively conservative due to policy uncertainties. This differentiation has prompted battery companies to adopt a "global localization" strategy and establish production bases near major consumer markets. At the same time, changes in trade policies, such as possible tariff adjustments in the United States in 2026, have triggered expectations of increased inventory at the end of 2025, increasing the complexity of supply chain management.
The integration of the industrial chain and the oligopoly competition pattern continue to strengthen. According to a study by China Merchants Bank, the lithium battery industry still maintains an oligopoly competition pattern, but the concentration has declined, and the ranking of leading enterprises is being adjusted. It is worth noting that integration is accelerating in the downward cycle of the industry, such as Rio Tinto Group's all-cash acquisition of Arcadium and China Minmetals Group's acquisition of Salt Lake Co., Ltd., indicating that the importance of resources is becoming more prominent at the bottom of the cycle. This integration not only occurs at the horizontal level, but vertical integration has also become a strategic choice. The full chain layout from minerals to materials helps to enhance risk resistance. In the future, the industry may form a binary structure with "super giants" and "professional players" coexisting, and the survival space of middle-tier enterprises will be compressed.
The policy environment continues to play a key variable role. Europe's stricter carbon emission assessment in 2025 will directly stimulate the demand for electric vehicles; China's "old for new" subsidy policy continues market support; and the support of various countries for renewable energy indirectly promotes the development of energy storage. These policies not only affect short-term market demand, but also shape the long-term industrial ecology. At the same time, stricter environmental regulations have also prompted the battery industry to accelerate green transformation. From responsible mineral procurement to carbon footprint management, sustainable development is becoming a core competitiveness rather than a simple cost burden.
The lithium battery market will face multiple structural changes in the future. On the demand side, the proportion of energy storage will continue to increase, making the demand structure more balanced; on the supply side, the production capacity of lithium extraction from salt lakes will exceed that of lithium extraction from spodumene for the first time, and the ways of obtaining resources will be diversified; on the technical side, both material system innovation and manufacturing process progress will be given equal importance. These changes require companies to have stronger adaptability and forward-looking layout awareness. It is particularly worth noting that as the industry matures, it will become inevitable for profit margins to return to normal. Relying on technological advantages and scale effects rather than policy dividends to obtain reasonable returns is the long-term solution for the healthy development of the industry.
Risk factors cannot be ignored. In 2025, the lithium battery industry faces multiple risks such as excessive price declines, changes in geopolitical and trade policies, weak demand, and production progress that is lower than expected. These uncertainties require market participants to establish a more flexible operating mechanism and a more robust financial structure. At the same time, the risks of technical routes are also worth being vigilant. When the industry is in a period of change, betting on the wrong technical path may lead to strategic mistakes. Maintaining a moderately diversified technical reserve is a countermeasure.

The lithium-ion battery market is moving from a high-speed growth stage to a high-quality growth stage. Although this transition may slow down the absolute growth rate, it will enhance the sustainability of industry development. 2025, as a key turning point, will test the strategic determination and execution capabilities of various market participants. Those companies that can grasp the technical direction, optimize the production capacity layout, and build a resilient supply chain will occupy a favorable position in the new round of industry reshuffle and share the long-term dividends brought by the global energy transformation.