USA EV Battery Market Outlook to 2030

USA EV Battery Market Overview

• USA EV Battery Market was valued at USD 5 billion, driven by the rapid increase in EV adoption and the push toward renewable energy. The countrys expanding EV infrastructure, higher consumer demand for electric vehicles, and significant advancements in battery technology are all driving market growth.
• USA EV Battery Market is dominated by several key players, including Panasonic, Tesla, LG Energy Solution, General Motors, and Samsung SDI. Panasonic, in collaboration with Tesla, plays a vital role in the U.S. market, producing a significant portion of EV batteries through the Gigafactory in Nevada. LG Energy Solution and Samsung SDI have also established a presence with their advanced battery technology, while General Motors has entered the race with their Ultium battery platform.
• In 2024, Ford announced a realignment of its U.S. battery sourcing plan aimed at reducing costs and maximizing capacity utilization. The company is adjusting its North America vehicle roadmap to include a wider range of electrification options, such as lower-priced and longer-range electric vehicles.
• The U.S. EV battery market is predominantly centered around cities with high EV adoption rates, such as San Francisco, Los Angeles, and New York. These cities lead the market due to their robust infrastructure, supportive government policies, and higher consumer awareness of electric vehicles. Additionally, regions like Texas and Michigan are emerging as significant players, thanks to investments in EV manufacturing and battery production facilities.

USA EV Battery Market Segmentation

By Battery Type: The USA EV battery market is segmented by battery type into lithium-ion batteries, solid-state batteries, and nickel-metal hydride batteries. In 2023, lithium-ion batteries dominated the market due to their widespread use in electric vehicles and their high energy density. They have become the standard in EV manufacturing because of their proven performance, long lifecycle, and improved charging capabilities.

By Vehicle Type: The market is also segmented by vehicle type into battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs). In 2023, BEVs held a dominant market share due to their zero-emission profile and significant investments by automakers. Tesla's Model 3 and Ford's Mustang Mach-E have led the BEV market, with growing popularity among consumers driven by government incentives and the rapid expansion of charging infrastructure across the country.

By Region: The regional segmentation divides the USA EV battery market into North, South, Midwest, and West. The West dominated the market in 2023, primarily due to California's stringent emission regulations and the state's aggressive push towards electric vehicle adoption. The region's supportive government policies, consumer awareness, and vast charging infrastructure make it a leader in EV battery demand.

USA EV Battery Market Competitive Landscape

• Samsung SDI: In 2024, Samsung SDI has officially signed an agreement with General Motors (GM) to establish a joint venture for electric vehicle (EV) battery production in the United States. This partnership will see the construction of a battery cell manufacturing plant in New Carlisle, Indiana, with an initial investment of approximately $3.5 billion. The plant will focus on producing nickel-cobalt-aluminum (NCA) prismatic batteries for GM's upcoming EV models.
• Panasonic: In 2023, Subaru Corporation and Panasonic Energy Co. Ltd have strengthened their partnership by signing an agreement for the supply of cylindrical lithium-ion batteries for electric vehicles (EVs). This collaboration aims to support the growing demand for battery electric vehicles and contribute to societal challenges like carbon neutrality. Subaru plans to increase its electrification target to 50% pure BEVs by 2030.

USA EV Battery Industry Analysis

Growth Drivers:

• Increased Consumer Demand for EVs: The growing adoption of electric vehicles (EVs) is driving the demand for EV batteries. In 2023, global EV battery demand surpassed 750 GWh, marking a 40% increase from 2022, with EVs accounting for 95% of this demand. This surge in demand is supported by increased consumer awareness, tax incentives, and stricter emission norms. More automakers are launching new EV models to meet consumer demand, further increasing the need for high-capacity EV batteries.
• Advancement in Battery Technology: New developments in battery technology, particularly the shift toward solid-state batteries, are propelling the EV battery market forward. Major manufacturers are focusing on solid-state battery technology, which promises higher energy densities and improved safety. For instance, Panasonic's new Tesla-specific 4680 battery cell offers six times higher power capacity and five times more energy than previous models, indicating a significant leap in battery performance.
• Government Tax Credits and Subsidies: The U.S. government has introduced substantial incentives to encourage EV adoption and local battery manufacturing. The Inflation Reduction Act (IRA) includes provisions for $10 billion in manufacturing tax credits specifically for EV projects, as well as $6.135 billion for battery material processing and recycling grants. These incentives are directly increasing the market demand for EV batteries in the country.

Challenges:

• Supply Chain Disruptions for Raw Materials: The EV battery market is heavily dependent on key raw materials like lithium, cobalt, and nickel, and disruptions in the supply chain are a major challenge. Global cobalt production came from the Democratic Republic of Congo, where political instability and labor issues have led to supply constraints. This has resulted in delays and increased costs for EV battery manufacturers in the U.S.
• Recycling and Environmental Concerns: The growing number of electric vehicles is creating a significant challenge in terms of battery recycling. Only a few EV batteries in the U.S. were recycled, posing environmental concerns due to the hazardous materials involved in battery production and disposal. Without advancements in recycling technology or stricter regulations, the industry could face environmental backlash, especially as battery production scales up in the coming years.

Government Initiatives:

• The Bipartisan Infrastructure Law: It was enacted in 2021, after being signed into law. This legislation represents a significant investment in the United States' infrastructure, with a total allocation of approximately $1.2 trillion, which includes $550 billion in new spending aimed at modernizing and improving various infrastructure sectors. This initiative is critical in ensuring that the charging infrastructure can keep up with the growing number of electric vehicles on the road.
• The Inflation Reduction Act (IRA): The Inflation Reduction Act (IRA) is considered one of the largest investments in clean energy and climate initiatives in U.S. history, with approximately $391 billion allocated for various programs and incentives designed to stimulate economic growth and job creation while promoting green technologies. This is expected to lower battery production costs and increase local manufacturing capabilities.

USA EV Battery Future Market Outlook

The future of the USA EV battery market looks promising, driven by strong government support, technological advancements, and growing consumer demand. By 2028, the market is expected to be characterized by widespread adoption of solid-state batteries, which will offer superior performance, safety, and energy efficiency compared to traditional lithium-ion batteries.

Future Trends

• Shift to Solid-State Batteries: The EV battery market will see a significant shift toward solid-state battery technology. These batteries promise higher energy densities, faster charging times, and improved safety compared to current lithium-ion technology. Several automakers, including Toyota and Ford, have already announced plans to launch EVs with solid-state batteries, which will further drive market growth.
• Increased Domestic Battery Production: The U.S. will significantly reduce its dependence on imported EV batteries. New manufacturing facilities by companies like Tesla, Ford, and LG Energy Solution will ramp up domestic production, helping to secure the supply chain and lower costs. The U.S. Department of Energy's initiatives to increase domestic mining and processing of critical materials like lithium will also support this shift.