What are Lithium Ion Batteries?
Before analysing the lithium ion batteries market, you will need to know what lithium ion batteries are. After knowing the definition, let’s analyse the lithium ion batteries market and look at the promising lithium ion batteries companies.
Science Direct defines a lithium-ion battery as “a family of rechargeable battery types in which lithium ions move from the negative electrode to the positive electrode during discharge and back when charging”[i]. We’ve all probably heard of this type of battery before; Tesla being one of the most notable companies utilising this energy storage in their autonomous vehicles. However, there is a million other uses for these special lithium ion batteries: medical devices, smartphones, solar & wind energy storage, toys & drones, power tools and uninterrupted power supplies, just to name a few.
A Short Video Explaining How Lithium-Ion Batteries Work
One of the most positive features of the lithium ion battery is its material advantage. Due to their recyclable property, we can see both a reduction in material scarcity as well as an improvement in environmental sustainability, contributing to a more resilient circular materials supply chain. Alongside this, we must also note some advantages just as important: safe chemistry, 50-60% lighter than the lead-acid equivalent, up to 10 times the battery life of this equivalent, a low self-discharge rate meaning the battery has a longer shelf life and hoisters a 25-50% higher capacity than a lead-acid battery[ii].
This article will explore the world of the lithium ion batteries market, delving into the global and UK market separately, discovering the drivers in demand of the market and finally presenting some potential investment opportunities within this highly attractive sector.
Global Lithium Ion Batteries Market
As a whole, the worldwide lithium ion batteries market was estimated to be valued at USD 45.7 billion and is expected to grow at a CAGR of 13.1% over the next 10 years, reaching an approximate value of USD 154.4 billion globally[iii].
A recent study from McKinsey & Co. outlines the demand predictions for lithium ion batteries market. Their Battery Insights team found that the entire lithium ion batteries market has the potential of growing 6 times, or 27% per year, until 2030, with the mobility segment making up the majority of this demand[iv]. This increase can be attributed to the regulatory shift towards sustainability, via the banning of internal combustion engine vehicles by 2035 and the higher consumer adoption rates of greener materials.
One of the strongest demand drivers for using lithium ion batteries in electronic systems/devices is the dramatic fall in prices over the past couple of decades, ranging from USD 5000 per kWh in 1991[v] to as low as USD 101 per kWh in 2021[vi]. Another strong driver stems from the actual performance and ability of the lithium ion battery. A report published by the US Office of Science and Technical Information found that the energy density within lithium-ion cells has more than doubled in the same time period from 120Wh per kg[vii] to over 270Wh per kg[viii]. Finally, the world’s push towards a more environmentally friendly planet through the electrification of vehicles and the general energy transition from non-renewable to renewable sources is another major factor.
Global Lithium Ion Batteries Companies
As mentioned previously, one of the largest users and manufacturers of lithium ion batteries is the electric vehicle titan, Tesla. This specific EV company manufactures batteries for their own use, namely cobalt-nickel-aluminium (NCA) and lithium-iron-phosphate (LFP). Note that these are the latest technologies surrounding lithium-ion batteries, offering higher battery density, longer battery life, faster charging, light weight and high speeds. Also, important to note how committed to being environmentally friendly Tesla is. Even their production of these batteries involves using renewable energy sources such as solar panels and wind turbines to provide power to the line.
Tesla registered revenues of USD 81.4 million in FY2022, increasing 51.35% from the year prior[ix], along with a net profit margin of 15.45% from their EV sales.
Another popular firm involved in manufacturing batteries is also a world leader, Panasonic, accounting for 10% of market share[x]. Currently, their lithium batteries can be utilised within sectors such as automotive, infrastructure, internet of things, medicine and the space industry. Due to Panasonic’s incredible success, they are pushing this further by building a USD 4 billion electric vehicle battery factory in Kansas, Texas.
UK Lithium Ion Batteries Companies
Let’s now have a look at some potential investment/acquisition opportunities we have found at JCinus Partners. Investment in a lithium ion battery business is bound to generate a positive return on investment, based on aforementioned reasons. Acquisitions of a lithium-ion company would lead to a highly secure battery supply, an entry to a new market and access to some cutting-edge, environmentally friendly battery technology.
Company D
A series A clean-tech platform developing next-gen battery management technology, striving to increase both the lifetime and performance of lithium-ion battery packs. Their platform statistics include up to 46% in improved performance, a 60% longer battery life, 50% lower emissions and 30% in lower lifetime costs. Through two funding rounds, the business has already harnessed USD 10.6 million from outside investors.
Company L
Founded in 2000, this private company has established itself as a one-stop shop for lithium ion batteries, light e-mobility vehicles and EV charger manufacturers. The company, alongside distributing the products, contains their own in-house cable assemblies to tailor to the specific needs of each of their customers. A highly attractive opportunity for battery manufacturers everywhere. Other products available include battery accessories fuses, alligator clamps, aqua accessories and management systems.
Company N
A pre-seed battery nano-materials firm with GBP 2.8 million in funding already. This young startup, founded only in 2020, ushers in the next generation of battery materials with a dedication to accelerate the research, development and commercialisation of highly innovative batteries. A team comprised of entrepreneurs, scientists and engineers have successfully achieved their goal of enabling the battery company to speed up the development & manufacture of patented, scalable battery cathode materials for lithium ion batteries.
Company S
A private company focused on delivering national end-to-end recycling services of both lithium ion and lead-acid batteries to advance the shift towards electrification and more environmentally friendly consumption. The recycling battery company has been granted GBP 2 million in capital so far from Innovate UK, the British national innovation agency. The grant will be utilised in designing and building safe mobile recycling trucks in three different sizes, ranging from 7.5 to 16 tonnes, capable of transporting 500-2000kg/h of lithium ion batteries.
Company Z
This nine-year-old business licenses an attractive software solution to portable electronics companies who strive to augment their battery experience reduce their e-waste. They have designed & implemented battery management waste system software for iOS, Android, MacOS, Windows, Linux, WearOS, WatchOS and an enterprise platform for consumers to manage their devices. Their software can help double the lifespan of lithium-ion powered devices, saving up to 2kg of waste per user per year, or 200kg of carbon per user per year.
Resources
- [i] https://www.sciencedirect.com/topics/chemistry/lithium-ion-battery
- [ii] https://www.relionbattery.com/resource-center/technology/why-choose-lithium
- [iii] https://www.emergenresearch.com/industry-report/lithium-ion-battery-market#:~:text=The%20global%20lithium%2Dion%20battery,is%20driving%20market%20revenue%20growth.
- [iv] https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/battery-2030-resilient-sustainable-and-circular
- [v] https://pubs.rsc.org/en/content/articlelanding/2021/EE/D0EE02681F
- [vi] https://www.nature.com/articles/nenergy2017125
- [vii] https://www.osti.gov/biblio/10191068
- [viii] https://www.sciencedirect.com/science/article/pii/S0378775320309186?via%3Dihub
- [ix] https://www.wsj.com/market-data/quotes/TSLA/financials/annual/income-statement
- [x] https://finance.yahoo.com/news/3-battery-stocks-could-skyrocket-113850130.html#:~:text=Panasonic%20(PCRFY)&text=Currently%2C%20Panasonic%20has%20a%2010,Tesla%20(NASDAQ%3ATSLA).
- [xi] https://www.ibisworld.com/united-kingdom/market-size/lithium-battery-manufacturing/#:~:text=The%20market%20size%2C%20measured%20by,%C2%A3222.4m%20in%202022.
- [xii] https://www.faraday.ac.uk/news-ev-battery-prod-2040-update-june2022/
- [xiii] https://www.gov.uk/government/news/self-driving-revolution-to-boost-economy-and-improve-road-safety
- [xiv] https://www.marketsandmarkets.com/PressReleases/uk-lithium-ion-battery.asp
- [xv] https://www.gov.uk/government/news/record-funding-uplift-for-uk-battery-research-and-development
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