Battery market expected to grow with 25% CAGR by 2030,

driven by xEV
Global Li-Ion battery market volume (in GWh)
1
Consumer electronics
Other portables 2
Consumer
3,776
2% 1%
3% 6% Power tools 3
3,301
+18% Industrial machinery 4
Tools
+25% 2,837

2,395 Behind the meter

5
2,012 Stationary In front of the meter
71%
1,665
+35%
1,337 BEV
1,041 PHEV
790 HEV
500 MHEV
3% 2%
203 228 241 5% Mobility 6 Heavy duty 7
6% Micromobility 8
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Other mobility 9

x% x% CAGR

1. Mobile phones, ultramobiles, and laptops 2. Drones and wearables 3. Power tools and garden tools 4. Material handling, construction equipment, airport handling vehicles, robotics, off-road utility vehicles, and other industrial
equipment 5. Also includes batteries for off-grid applications 6. BEV, PHEV, HEV, and MHEV, including passenger and light commercial vehicles 7. Medium- and heavy-duty trucks and busses 8. E-scooters, e-bikes, e-kick, two-wheelers,
and three-wheelers 9. Marine and aviation
Source: BCG analysis (December 2021)
Li-Ion Battery Trends and
Market Outlook 2030
June 2022
Six key insights driving the market at the moment

Battery demand Production will slightly Cell cost expected Supply chain and raw No technology Strong dynamics
estimated to grow shift geograohically to decrease by ~ 40% material limits prevail discontinuites expected on insourcing and
by 25% CAGR by 2030 strat. partnerships

Demand for Li-ion Asia with expected NMC(A) cost per cell Strong growth outlook LFP regaining share Strong OEM push
batteries to grow 46% market share still to reduce from for raw material as means to diversify to enforce supply chain
at 25% CAGR dominant but losing ~ $110/kWh in 2020 demand; significant from high-nickel inputs; resilience via
to 3,776 GWh in 2030 ~ 8% market share to ~ $62/kWh1 investment to elevate novel chemistries partnerships—upstream
(> 70% of which to Europe and the US in 2030—although mining capacities available in pilots and downstream
from BEVs) by 2030 slight increase in 2022 required to match (e.g., Li-air) but mass of the value chain
due to supply demand commercialization not
constraints expected before 2030

1. ~ $70/kWh on the pack level

Battery market expected to grow with 25% CAGR by 2030,
driven by xEV
Global Li-Ion battery market volume (in GWh)
1
Consumer electronics
Other portables 2
Consumer
3,776
2% 1%
3% 6% Power tools 3
3,301
+18% Industrial machinery 4
Tools
+25% 2,837

2,395 Behind the meter

5
2,012 Stationary In front of the meter
71%
1,665
+35%
1,337 BEV
1,041 PHEV
790 HEV
500 MHEV
3% 2%
203 228 241 5% Mobility 6 Heavy duty 7
6% Micromobility 8
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Other mobility 9

x% x% CAGR

1. Mobile phones, ultramobiles, and laptops 2. Drones and wearables 3. Power tools and garden tools 4. Material handling, construction equipment, airport handling vehicles, robotics, off-road utility vehicles, and other industrial
equipment 5. Also includes batteries for off-grid applications 6. BEV, PHEV, HEV, and MHEV, including passenger and light commercial vehicles 7. Medium- and heavy-duty trucks and busses 8. E-scooters, e-bikes, e-kick, two-wheelers,
and three-wheelers 9. Marine and aviation
Source: BCG analysis (December 2021)
Asian dominance expected to reduce over time; Europe to see
largest gain
Announced global battery … and share by region (in %)
production capacities
(in GWh) …

2,725 21%
3% Europe
26%
22% 22% APAC
North 21%
America
54%
26% 46%

1,079

23%
24% 46%
2%
2% 2% 3%
203 48%
Middle APAC to lose
54% South 8% of current market
America East &
2020 2025 2030 Africa share, mainly to
Europe & N. America

Note: Only announced production capacities displayed; expectation that further announcements
will follow to match global demand at ~ 3,776 GWh South and Central America North America Asia Pacific Europe Middle East and Africa Market share (in %) 2030
Source: BCG analysis (October 2021) 2020
Multiple Li-ion battery production projects announced
in US and Europe
Announced global battery production capacities (in GWh)
Selected battery plant projects
Europe
718

260 Asia-Pacific
North America 42 1,266
Gotion starts
Ford and SK On develop 607 2020 2025 2030 construction of
two Kentucky plants with
244 50 GWh plant
combined capacity of 86 518
43 in Hefei, to start
GWh, SOP in 2025 Northvolt forms JV with Galp
Energia to build 50 GWh plant in 110 operation in 2023
2020 2025 2030
Portugal, SOP 2026
2020 2025 2030

Middle East and Africa

35 85
South & Centr. America 5
Several projects on hold,
2020 2025 2030
esp. in lithium -rich Salar 3 22 49
de Uyuni region of Bolivia MM and Chinese partners to build
2020 2025 2030
32 GWh battery plant in SA by ’28

Note: Only selected, announced projects displayed

Sources: Ford; Northvolt; technode; CleanTechnica; DW; BCG analysis
We have a path to total cost of ownership and purchase
price parity in auto
Battery cell cost development (in $/kWH) Main cost reduction drivers
1

Cost of nickel-rich automotive battery cell ($/kWh) 1

Raw materials
130
Replacing Co with higher Ni content
120
110 Si-based anode to partially replace graphite
110
104 106 Li-metal toward end of decade
100 Pack level:
97 ~ $70/kWh
90 89
Average cell cost in 2020: Process/production
80 ~ $110/kWh 80
76
73 Substantial process efficiencies
70 69 70
Slight increase vs. recent 66 (automation and scrap reduction)
60 trajectory expected in 2022 due 62
to supply shortage Decreased CAPEX and energy reqs .
Cell level: (e.g., using dry electrode coating)
~ $62/kWh
0 Scale effects driven by increasing demand
2020 2022 2024 2026 2028 2030
TCO parity dates between BEV over ICE: 5-year: Purchase price parity: Pack technology

Cell to pack instead of modules

// Cell to chassis instead of separate pack

1. BCG forecast based on figures for 2020, 2025, and 2030—linear growth rates for remaining years
Sources: BCG analysis and forecast; expert interviews; analyst reports (UBS, HSBC, Bloomberg New Energy Finance)
Race toward emobility suggests raw material shortage

Demand and capacity side announcements indicate Critical battery cell materials
increasing shortage of critical cell materials
Lithium
Demand and capacity side announcements indicate
increasing shortage of critical cell materials
Nickel Cathode ma-
terial deep
“The industrialization of mines and refinery capacities may not progress as quickly as demand dive on next
increases. Should that happen, it would only delay e mobility Cobalt slide
but not prevent it.”
Ola Källenius , CEO Daimler
Manganese

Iron
Globally mined lithium production
hits record high in 2021 Aluminum
“Globally mined lithium production hit a record high in 2021 of 100,000 tons (excluding the
US), a 21% increase over 2020 (82,500 tons)[…]. ‘Lithium supply security has become a top Copper
priority for technology companies in Asia, Europe, and the United States,’ the USGS said in its
latest report.”
Graphite

Source: Reuters; mining.com; Cairn; BCG analysis Sufficient supply Critically insufficient supply
Further mining supply needed to overcome projected shortage
of raw metals

Cathode material split

Raw m aterial demand Today’s operating
(for Li-iob batteries supply (as % of 2025
Exp.share
Raw m aterial NMC NMCA LFP NCA by 2030) dem and)4 Comment
until 2030
EV share to rise from
Lithium1 11% - 23% 11% ~2,600 kT ~ 40% currently ~ 25% to ~ 80%
of Lithium demand in 2030

Supply growth until 2030

Nickel2 72% 80% - 54% ~1,600 kT ~ 25%
faster than Co and Li

Coutilization in EVs to
Cobalt 9% 10% - 18% ~270 kT ~ 50% decrease, also due to ESG
concerns around sourcing

Manganese3 Declining share over time

8% 5% - 17% ~250 kT ~ 80%
as shift to NMCA and LFP

Iron - - 77% -
Considering currently
available mining capacity; sig-
nificant mining activity
Other - 5% - -
increase expected as reaction

1. Regarded as lithium carbonate equivalents (LCE ) 2. Capacity review restricted to battery grade Nickel 3. Capacity review restricted to battery grade Manganese 4. Assuming similar split for EV as for global market
Sources: UBS, Cairn, Giyani Metals, Morgan Stanley Research, World Economic Forum, BCG CMI Nickel Market Model, BCG EV Demand Fo recast,IEA model ‘Sustainable Development Policies’
Innovation by ’25 through incremental Li-ion improvements
and solid state
2015 2020 2025 2030 Comment

Currently in use;
Li-ion (i.3.,LFP)
phasing out for advanced
200 Wh/kg1
Li ion (high Ni)

Sod-ion CATL with plan for

>200 Wh/kg1 industrialization in 2023

Adv anced Li-ion First applications in

(e.g.,NMC, NCA) 350 vehicles on the road

Semisolid state Pushed by

350 Wh/kg1 Nio

Solid state Small scale today, not

450 Wh/kg1 market leading before ’25

Li-S, Li-air, Mg-ion Early research stage,

>700 Wh/kg1 likely not avail. before ’30

Number of pack level

Laboratory phase Pilot phase Commercialization Further advancement Phase out innovations are increas-
ing, e.g., dual chemis-
1. Maximum achievable energy density on cell level for prismatic cell design tries
Source: Bloomberg; CDI; CRU; Darton Commodities; INSG ; Jefferies; Morgan Stanley Research; Roskill; Wood Mackenzie; CATL ; PV Magazine; BCG CMI Nickel Market Model
We observe different tech innovation paths by vehicle segment

Vehicle segment (exemplary models) Sales v ol. forecast Tech adoption path

# of BEV in M
Today Challenger2
CAGR 19%
2022 2030 ff. "Looking for latest
Premiumvehi- 9.2
battery innovation &
cles1 Tesla Mercedes Lucis
2.3
ModelS EQS Motors Air 2022 2029 differentiating power"
NMC/NCA Li Metal & Li S

2022 Starting 2022

CAGR 30%
Mid-level 14.4 "Looking for fast re
vehicles VW Mustang Kia 1.7 charging solution"
ID4 Mach-E EV6
2022 2029 NMC/NCA Variations of
NMC/NCA

2022 Starting 2023

CAGR 14%
"Looking for cost
Entry-level 9.2
competitive battery
vehicles
2.8
Nissan Skoda Fiat
Leaf Citigo 500e
2022 2029 LFP Na-Ion solution"

1. Premium/Mid-Level/Entry-Level based on IHS global production price class 2. Based on commercial availability of the technology
Source: Wood Mackenzie; IHS Markit Light Vehicle Powertrain March 2022; BCG analysis
OEMs expand their focus to more and more steps along battery
value chain
Non-cost driven

Factor-cost driven Factor-cost driven

Cell chem. & Vehicle

Raw material Cells Module Pack
components integration

Past level of
involvement

Current level of
involvement

Sources:Interviews with experts from cell manufacturers, T1s, and OEMs; Total Battery Consulting;Electrek;EVSpecifications;JP Morgan;BCG analysis
For further information

Mining operators Battery producers OEMs

Revisit investment plans for mining Win the “partnership race” with OEMs Scale up battery manufacturing part-
capacity of critical raw materials and scale up production footprint nerships and define the right level of
(especially nickel, lithium, cobalt, value depth
and manganese)
Closely monitor cathode material Build up recycling capabilities to Ensure access to critical raw materials
innovations in BEV to anticipate ensure sufficient raw materials and de-risk supply (e.g., multisource ap-
supply/demand disparities proach, backward
integration)
Add niche-play business models Continue to optimize battery designs
(e.g., customized cell chemistries) to (e.g., cell-to-chassis)
avoid volume/unit cost trap

Continue pushing Li-ion innovation

roadmaps
For further information

Brian Collie Nathan Niese

MD and Senior Partner, Chicago Partner and Associate Director, Chicago
[email protected] [email protected]

Aakash Arora Sebastian Schrapp

MD and Partner, Boston Partner,Munich
[email protected] [email protected]

Albert Waas Rolf Kilian

MD and Partner, Munich MD and Senior Partner, Stuttgart
[email protected] [email protected]

Daniel Kuepper Alex Xie

MD and Partner, Cologne MD and Partner, Shanghai
[email protected] [email protected]
THANK YOU