Li-ion Battery Demand Surges 33% Globally As EVs Hit Record Sales: Bernstein

Global demand for lithium-ion batteries has surged to 80.9 GWh, a 33% increase from the prior year, according to Bernstein. This development occurs alongside a surge in record electric vehicle sales, with October marking an all-time high at 1.76 million units globally, up 38% year-on-year.

China dominated the battery market, accounting for 49.5 GWh, while Europe and North America contributed 14.5 GWh and 11.5 GWh, respectively.

Chinese battery giant Contemporary Amperex Technology Co. maintained its 35% global market share, while BYD Auto came in second with 16.4 GWh of batteries sold in October (up 54% year-on-year). Fast-growing players like SVOLT Energy Technology, Gotion High Tech Co., and CALB are also making strides, capitalising on the rising adoption of lithium iron phosphate batteries, which accounted for 39% of global EV battery installations year-to-date, up from 34% last year.

Despite this growth, Bernstein highlighted shifts in the competitive landscape. South Korean battery makers, LG Energy Solution and Samsung SDI, lost market share, with Samsung's EV battery installations dropping 23% year-on-year. Both companies face additional pressure from regulatory uncertainty in the United States.

China continues to be the engine of global EV growth, said Bernstein. In comparison, Europe's EV sales remained relatively flat, up only 2% year-on-year, while North America posted modest gains of 9% year-on-year, far below the firm's expectations.

In the US, November data from CLSA paints a mixed picture. Battery electric vehicle penetration rose to 8.6%, a 0.4 percentage point increase from the previous year. However, the looming threat of subsidy cuts could weigh heavily on demand in 2025.

As US President-elect Donald Trump positions himself for return to office, CLSA cautions that federal EV incentives, including the $7,500 subsidy, might be rolled back.

This uncertainty has sparked front-loaded demand in recent months as buyers and manufacturers brace for policy shifts, CLSA said, as it maintained a cautious outlook for Korean battery makers like LGES and Samsung SDI.

"We believe the true reflection of US EV demand will emerge once there's clarity on subsidies," CLSA noted, warning that subsidy removals could lead to stagnant battery electric vehicle penetration levels.

On the automaker front, BYD continued its dominance with 4,92,000 EVs sold in October (up 74% year-on-year), followed by Tesla's 1,29,000 units. Traditional European brands like BMW and Mercedes struggled to keep pace, though Volvo and Volkswagen reported strong double-digit growth.