Global Battery Deployment Surges 15%, BESS Gains 55%

2024 marked a year of continued growth and adaptation in the global battery industry. Global electric vehicle (EV) sales climbed 25% to 17.7 million units, with Battery Electric Vehicle (BEV) demand up 14%, while Plug-in hybrid electric vehicles  (PHEV) demand surged 50%.

For the first time, battery electric vehicles (BEVs) in China have reached price parity with fossil fuel vehicles. This milestone comes as China continues to lead the world in EV market penetration, with xEVs accounting for 45% of new car sales. Globally, automakers are adapting their strategies, with Chinese automakers expanding into Europe and the Global South, while some traditional OEMs cut back on EV targets and investments.

The BESS Decade Gains Momentum

The report found that  ‘BESS Decade’ continues to gain momentum, with 55% year-on-year growth. Battery Energy Storage Systems (BESS) now account for 15% of total battery deployments. This is rising from 7% in 2020, highlighting their rapid adoption. The new BESS installations in 2024 alone contributed over 45% of the current cumulative global capacity of 150 GW / 363 GWh, underscoring BESS’s significance as one of the most promising and fast-growing sectors in the battery industry landscape.

Battery Prices Drop

The study showed that, “Battery prices at the pack level saw the largest drop since 2017, declining by 20% from 2023 to a record low of $115/kWh. Global battery manufacturing capacity increased from 1.05 TWh to 1.45 TWh in 2024. Overcapacity across the battery supply chain drove cell prices to an unsustainably low level of $50/kWh for China-made LFP cells, resulting in intensified competition and investment pullback.”

They found that the new Chinese industrial policies aimed at phasing out low-quality capacity added further pressure. For battery producers navigating this challenging pricing environment, current strategic focuses include cost reduction, technological innovation, vertical integration, and diversification into overseas markets in search of higher profit margins. China continues to dominate the supply chain, owning about 80% of key cell components and cells.

Investment Landscape and Market Performance

The battery investment landscape in 2024 slowed, with fewer VC/PE deals due to higher interest rates and geopolitical tensions. While growth was supported by significant debt raises and government funding—such as Northvolt ETT AB’s €5 billion green offering and the U.S. DOE’s $9.6 billion loan to BlueOval SK—the bankruptcy of Northvolt highlighted risks in the sector, dampening investor confidence.

Public market performance was mixed, with established battery OEMs benefiting from new product launches, while shares in EV startups, charging infrastructure, and lithium companies underperformed. The U.S. DOE supported the sector by investing over $3 billion into 25 projects to bolster domestic battery production and supply chains in the United States.

Emerging Technology Trends

Emerging technology trends in 2024 include the introduction of medium-nickel high-voltage NMC and high-compaction-density LFP cathodes. Significant strides were made in the commercialization of dry electrode processing, LxFP, engineered silicon, and pre-lithiated anodes, all aimed at improving energy density, cost, and safety. Alternative cell chemistries, such as Na-ion, solid-state batteries (SSB), sulfur, and Li-metal, also progressed toward commercialization. Notably, sodium-ion and semi-solid-state products, primarily developed by Chinese manufacturers, are now being integrated into commercial EVs and BESS systems.