The automotive transition to electrification will cause tremendous growth for electric vehicle (EV) battery pack shipments rising to 30 million in 2027, from just 10 million this year, according to new data from Juniper Research.
The reasons for the growth identified by Juniper include:
- Falling vehicles costs.
- Increased awareness of environmental impact of mobility services.
- Automotive OEM transition.
- Government mandates for transition away from gasoline and diesel engines.
The commercial segment will be the strong growth for EV battery packs, growing to more than 7 million by 2027 up from 1.4 million in 2022. As automotive OEMs begin to mass electrify their fleet of vehicles to meet environmental mandates, it provides an opportunity for manufacturers to develop batteries designed for energy-intensive commercial use cases.
“Developing longer range vehicles by leveraging higher capacity battery packs will be critical to meeting expectations that foster commercial vehicle electrification but will require extensive investment to develop new battery pack technologies,” said Damla Sat, researcher at Juniper.
With the electrification of the public transit system and of heavy good hauling vehicles entering into mass adoption, Juniper said that the production of new battery technologies will be critical including those of the solid-state variety as well as new chemical mixtures.
Upcoming materials shortage
The one wrinkle in the growth of EV battery pack shipments is a potential shortage in rare Earth minerals that are essential in battery production including cobalt.
According to Stellantis CEO Carlos Tavares said that although the transition to EVs is the largest event in automotive history, it is likely coming at a time when EV batteries and raw materials will be in short supply in the years ahead.
Tavares said the EV battery shortage will happen during the 2024 and 2025 time frame followed by a raw materials shortage lasting through 2028. This could dramatically shift how fast the transition happens for the automotive industry.
Juniper said that manufacturers need to rapidly move to higher capacity technologies soon and unlock energy intensive use cases now in preparation for a future when raw materials will be in short supply or exceeding expensive, which may already be happening.