Next-Generation Advanced Battery Market

Market Overview

The global next-generation advanced battery market size was valued at USD 1.65 billion in 2022. It is estimated to reach USD 3.04 billion by 2031, growing at a CAGR of 7.04% during the forecast period (2023–2031). The world is moving towards renewable energy from conventional sources like fossil fuels to combat the harmful impact of such non-renewable energy on the environment. This has increased demand for next-generation advanced batteries as they help store renewable energy, thereby driving market growth.

The term "advanced battery" refers to a battery consisting of a battery cell that can be integrated into a module, pack, or system for energy storage applications, like electric vehicles and the electric grid. The term "next-generation advanced batteries" describes creating and integrating cutting-edge technology into battery systems to enhance energy storage capacity and performance.

Next-generation advanced batteries are made to get around the drawbacks of traditional batteries, namely their poor energy density, lengthy charging periods, and short lifespan. The main goal of next-generation advanced batteries is to offer effective and sustainable energy solutions for various applications, including grid-level energy storage, renewable energy storage, consumer electronics, electric cars, and consumer electronics.

Market Dynamics

Global Next Generation Advanced Battery Market Drivers

Growing Adoption of Electric Vehicles

Battery technology has proven paramount for automobile manufacturers to meet the world's growing demand for electric vehicles. Electric vehicle manufacturers are investing heavily in building efficient, cheaper, lighter, and denser batteries to improve the performance of their vehicles and increase profits. A solid-state battery is a rechargeable storage battery like a lithium-ion battery and operates similarly to it. However, it is a solid battery rather than a liquid-containing one, allowing it to be denser, offer more range, and charge faster.

In addition, a solid-state battery has a lower risk of fires than a lithium-ion battery, and the above advantage is likely to drive the demand for the solid-state battery in electric vehicles. In 2022, Toyota Motors launched its first solid-state battery for the market and is developing hybrid cars based on solid-state batteries. As per the International Energy Agency, plug-in electric vehicles increased rapidly from 0.58 million units in 2015 to about 6.70 million units in 2021, which is expected to directly aid the next-generation advanced battery market.

Increasing Adoption of Renewable Energy Systems and Associated Energy Storage Systems

With the advantages over conventional batteries like lithium-ion and lead-acid batteries, next-generation batteries are expected to play an essential role in renewable energy storage systems during the coming years. According to the International Renewable Energy Agency, the renewable energy capacity increased rapidly from 1,444 gigawatts (GW) in 2012 to about 3,064 GW in 2021, where solar and wind energy sources accounted for the biggest share of renewable energy capacity.

According to the International Energy Agency, in the coming years, renewable energy adoption is likely to increase due to the Global Net Emission Target 2050. Moreover, according to the IEA, the share of renewable power generation will likely be nearly 30% of global power generation by 2030. Such a scenario would require highly renewable energy projects, increasing the possibility of adopting high-energy battery storage systems like the solid-state battery during the forecast period. This, in turn, boosts the next-generation advanced battery market growth.

Global Next Generation Advanced Battery Market Restraints

High Manufacturing and R&D Cost

Most of the next-generation advanced batteries are still in the nascent stages of development, as manufacturing the batteries on a large scale has not been feasible due to the high mass production cost associated with them. Various next-generation flow batteries have been under research and development for the past few decades. However, only vanadium redox flow batteries and zinc-bromine batteries have been feasible as of 2022. Commercialization of vanadium redox flow batteries suffers due to the high cost of vanadium extraction and the fluctuating cost of vanadium. Overall, high manufacturing costs and high expenses due to research and development associated with the next-generation advanced battery market are significant restraints.

Global Next Generation Advanced Battery Market Opportunities

Increasing Research and Development

The surging research for developing new battery technologies in various institutes and research centers is augmenting the market growth. For instance, in May 2022, the Joint Center for Energy Storage Research (JCESR), an Innovation Hub of the United States Department of Energy (DOE) led by the Argonne National Laboratory, is leading the way in developing new battery technologies required to enable a renewable electricity grid and to decarbonize heavy-duty transportation, like long-haul trucking, marine shipping, and aviation. Research scientists at JCESR have developed more than 30 patents in the "beyond lithium-ion" space, with a primary focus on flow, lithium-sulfur, multivalent, and solid-state batteries.

Similarly, in March 2022, researchers from Monash University, Australia, created a new lithium-sulfur battery interlayer that helps in exceptionally fast lithium transfer, improving the batteries' performance and lifetime. Lithium-sulfur batteries, cheaper, greener, and faster, can charge and discharge batteries faster than previous batteries. Such developments will likely create opportunities for the players operating in the market.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global next-generation advanced battery market is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Asia-Pacific is the most significant global next-generation advanced battery market shareholder and is expected to expand substantially during the forecast period. China, India, and Japan are the potential markets in the Asia-Pacific region for the next generation of advanced battery technology. China's battery energy storage capacity reached 3 GW in March 2022, a 76.5% increase from 2019's capacity of 1.7 GW. By 2030, the Chinese government is anticipated to increase its battery storage capacity to 100 GW. Such circumstances generate vast opportunities for the development of advanced batteries of the next generation in the region.

Moreover, in March 2022, India authorized four companies to receive Advanced Chemistry Cell (ACC) Battery Storage Manufacturing Incentives under the PLI Scheme. Reliance New Energy Solar Limited, Hyundai Global Motors Company Limited, Ola Electric Mobility Private Limited, and Rajesh Exports Limited have received subsidies for India's INR 181 billion program to increase local battery cell production. Within two years, selected ACC battery storage manufacturers were required to establish a production facility under the program. These government-backed incentives are anticipated to foster the development of the next-generation advanced battery market.

North America is one of the largest regions in adopting the latest battery technologies and developments in the next-generation advanced batteries. In recent years, the battery systems in the region have experienced significant growth due to the rising investments in renewable energy infrastructure, rising demand for efficient and safe battery technologies, and the growing adoption of electric vehicles (EV) etc. For instance, in the United States, the total electric car stock reached about 2.06 million in 2021, witnessing an increase of about 16% from 1.77 million in 2020, and further, it saw massive growth over the last decade.

Similarly, Canada witnessed significant growth in wind energy installations in recent years, which is expected to supplement the demand for energy storage in the country to maintain grid stability and ensure reliability. Under the country's Wind Vision 2025, the government aims to increase the wind power capacity to 55 GW by 2025 to meet 20% of its energy needs. However, the country must add more than 42 GW of the new capacity to meet the targets. This is expected to provide investment opportunities for the next-generation advanced battery developers.

Europe has always been the fastest region to adopt new technologies for the last century. The region is also known for pioneering the research and development of batteries for the last several decades. European Commission is one of the major organizations in the region which funds several R&D projects for new technologies and their commercialization. For instance, in 2020, the European Commission granted EUR 11.8 million for the next-generation cobalt-free batteries for future automotive applications (COBRA) projects. COBRA is a collaborative research and invention project on next-generation cobalt-free batteries and is co-funded by the European Commission's Horizon 2020 program. It aims to develop a novel cobalt-free Lithium-ion battery technology while maintaining the high energy/power density and lifetime performance known from cobalt-based lithium-ion batteries. The project is expected to bear results in 2024. Such projects are expected to drive the regional market growth.

The Middle East and Africa have great potential in renewable energy power generation; an increase in investment in smart grid technology and growth in power generation is expected to boost demand for battery storage systems. There has been a significant rise in renewable energy projects, which can be ascribed to the various initiatives the region's governments took. In addition, governments are mainly investing in and promoting solar-based energy projects, as the region has the highest availability of sunlight during the year. For instance, UAE plans to spend around USD 160 billion on renewable energy by 2030 to achieve its aim of net-zero emissions by 2050. Such investments are expected to expedite the regional market expansion.

Segmental Analysis

The global next-generation advanced battery market is segmented by technology and end-user.

Based on technology, the global next-generation advanced battery market is segmented into solid electrolyte batteries, magnesium ion batteries, next-generation flow batteries, metal-air batteries, lithium-sulfur batteries, and other technologies. 

The metal-air battery segment owns the highest market share and is expected to expand substantially during the forecast period. Metal–air batteries are a part of primary and secondary cells. In metal-air batteries, the positive electrode is usually carbon-based with some precious metals for reacting with oxygen and other gases. The other electrode is made of a metal like zinc/aluminum/magnesium/lithium. These batteries are occasionally referred to as fuel cells due to the airflow within the cell. A particular type of metal-air battery is an iron–air secondary battery, which has been investigated as a candidate for the energy source of electric vehicles (EVs). In addition, battery suppliers such as Matsushita, Westinghouse, and Swedish National Development fabricated large-scale pilot cells during the 1980s. The cell's specific energy was as high as 75 Wh/kg, which is too low to be used for the practical cell. This involves a positive electrode catalyst and electrolyte, which are not considered in a theoretical system.

Flow batteries, which utilize electrolyte tanks capable of storing sufficient energy to power tens of thousands of homes for several hours, could be the answer to accelerating the expansion of the renewable energy market. However, most flow batteries rely on vanadium, a rare and expensive metal, and its alternatives are usually short-lived and toxic. The next generation of flow batteries is supposed to address these problems. These batteries store electrical charge in tanks of liquid electrolytes that are pumped through electrodes to extract the electrons; the used electrolyte is then returned to the tank. The electrolyte is recycled through the electrodes and back into the storage tank via pumps whenever electricity is supplied. However, the process would require scaling up the batteries to store more power, requiring bigger electrolyte tanks.

Based on end-users, the global next-generation advanced battery market is bifurcated into consumer electronics, transportation, industrial, energy storage, and other end-users. 

The transportation segment dominates the global market and is projected to exhibit a CAGR of 8.44% over the forecast period. The electrification of the transportation system is getting popular, and numerous government mandates have ramped up the adoption of electric vehicles, which contributes directly to the expansion of next-generation advanced batteries in the transportation sector. Nissan Motor Company intended to introduce laminated solid-state batteries to the market by 2028, beginning with constructing a prototype manufacturing facility in April 2022. It is part of Nissan's Ambition 2030 strategy and includes an investment of USD 17 billion for four new electric vehicle concepts. Therefore, automobile manufacturers are investing heavily in developing solid-state and metal-air batteries, making automobiles one of the most important sectors of the market for next-generation advanced batteries.

As per the International Telecommunication Union (ITU), the number of mobile subscriptions increased rapidly from 5.29 billion in 2010 to 8.65 billion in 2021, which directly aids the demand and development of the next-generation advanced battery market as companies are developing dense energy batteries to meet the high-power consumption by smartphones. For example, in 2021, Samsung Electronics Co. Ltd developed prototype solid-state batteries for its consumer electronics, providing high energy density and low flammability. For instance, as of 2020, Monash University in Australia claimed to develop an efficient lithium-sulfur smartphone battery. It could power a smartphone for five days on a single charge. Lithium-sulfur batteries are cheap to manufacture due to the widespread availability of sulfur.

Recent Developments

• September 2023- Enevate and NantG Power, two battery innovation pioneers enabling high-speed charge and energy density battery technologies for electric vehicles (EVs) and other markets, announced a strategic partnership to manufacture a next-generation battery.
• September 2023- Toyota publicly declared its intention to establish a novel factory dedicated to producing battery electric vehicles. This facility is projected to commence manufacturing operations in the year 2026, with the aim of introducing fresh car types to the market.