As the production and sales of new energy vehicles (NEV) grew, the installed capacity of batteries also grew rapidly, which, in turn, contributed to an increase in demand for battery materials, according to a study conducted by analyst firm TrendForce. Among battery materials, cathode materials are in the greatest demand for power batteries. According to TrendForce, the global demand for cathode battery materials in 2021 was 600,000 tons. Analysts expect it to surpass 2.15 million tonnes by 2025.
The electric vehicle industry is the largest consumer of lithium batteries. More precisely, electric vehicles account for over 60% of the total supply.
Sales of NEVs in China reached 2.99 million units between January and November of this year, according to statistics from the China Association of Automobile Manufacturers, accounting for approximately 50% of all NEVs worldwide. Thus, the Chinese market is key when it comes to increasing global demand for power batteries. During this period (January to November), the installed capacity of storage batteries in the Chinese market reached 128.3 GWh, which is 153.1% more compared to the same period last year. The total installed capacity of lithium iron phosphate batteries reached 64.8 GWh, for the first time exceeding the installed capacity of batteries based on triple materials (such as nickel-manganese-cobalt-oxide composite), which is estimated at 63.3 GWh.
Taking advantage of strong market demand for electric vehicles, lithium battery material manufacturers have begun a new round of large-scale production expansion this year and are expected to gradually open new production facilities over the next two to three years, according to TrendForce.