Lithium and Cobalt Markets Continue to Grow due to Rechargeable Batteries

A report by Platts, a division of S&P Global, indicates that rechargeable battery demand will continue to drive the lithium and cobalt markets for years to come.

Edward Lauer, the head of portfolio optimization at Eurasian Resources Group stated, “Long-term strong battery demand is very real… Even if demand from commercial and residential battery storage doesn’t materialize to the same extent, consumer electronics and electric vehicle industries will only continue to grow.”

The price of battery production is also expected to fall as technologies improve. Lithium-ion battery production costs averaged around $240/kWh in 2016, according to Andrew Grant of Bloomberg New Energy Finance, down from $350 a year earlier.

As for total market projections, a research by Markets and Markets estimates that the lithium ion battery market is expected to be valued at USD 68.97 Billion by 2022, growing at a CAGR of 16.6% between 2016 and 2022.

The growth of this market is propelled by the increase in demand for electric vehicle, strict government mandates on fuel economy, growing demand for smart devices and other consumer electronics, and development toward enhancement of lithium ion batteries. The lithium cobalt oxide (LCO) battery type is expected to hold the largest share of the overall lithium ion battery market in 2016 and the market for lithium nickel manganese cobalt battery type is expected to grow at the highest rate between 2016 and 2022.

Tesla Inc. earlier in January announced on their official blog that together with Panasonic Corp. the companies started mass production of lithium-ion battery cells, which will be used in Tesla’s energy storage products and the Model 3.

According to the blog, “With the Gigafactory online and ramping up production, our cost of battery cells will significantly decline due to increasing automation and process design to enhance yield, lowered capital investment per Wh of production, the simple optimization of locating most manufacturing processes under one roof, and economies of scale. By bringing down the cost of batteries, we can make our products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy.” Tesla is using a high-energy lithium-ion NCA (nickel, cobalt, aluminum) battery for its new grid battery.

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