Last year marked a turning point for the global battery, electric vehicle (EV), energy storage, and recycling markets. China emerged clearly at the forefront across these sectors, despite facing economic and geopolitical hurdles. This momentum looks set to continue in 2025, driven by supportive policies, ongoing technological advances, and growing consumer demand.
Global lithium-ion battery (LIB) production is expected to reach over two terawatt-hours (TWh) this year, representing an impressive 21% annual increase. Lithium iron phosphate (LFP) batteries stood out, especially in China, where their affordability and safety have helped them capture about 80% of the EV battery market. Although the dramatic cost reductions for materials like lithium carbonate and cobalt salts have now leveled off, future cost savings are anticipated, mainly from improvements in manufacturing processes rather than raw materials.
China is expected to keep its top spot in battery manufacturing, supported by its well-established supply chain and technological expertise. The US and European markets are also poised to grow, but Europe is still tackling issues like import competition and slower local supply-chain development. Meanwhile, alternative battery technologies such as sodium-ion and flow batteries are beginning to find niche opportunities as their costs become more attractive.
Worldwide passenger EV sales exceeded 17 million units last year and are projected to top 20 million this year, with EVs expected to make up 27% of the total market by December. China continues to dominate, boosted by government incentives and competitive pricing strategies. Notably, plug-in hybrid electric vehicles (PHEVs) made up 44% of China’s EV sales, highlighting consumer interest in flexible and budget-friendly options. In contrast, Europe’s EV market faced a slight decline and continues to experience turbulence due to policy uncertainties and fluctuating subsidies. The US market saw steady but modest growth, limited by concerns about affordability and gaps in charging infrastructure.
The battery recycling industry also progressed significantly despite ongoing challenges. Global recycling capacity is expected to exceed eight million tonnes. China maintained its lead in recycling, while North America faced setbacks from weaker EV demand and falling lithium prices. Still, positive developments — like Ascend Elements’ successful launch of commercial recycled lithium carbonate production — point to a promising future for this market.