The Great Transformation of the Global Battery Market in 2025: Commercialization of Solid-State Batteries and the Rise of Next-Generation Energy Storage Technologies
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The Paradigm Shift in the Battery Industry Becomes a Reality in 2025
As of December 2025, the global battery industry stands at the heart of dynamic changes like never before. Particularly, with the full-scale commercialization of solid-state battery technology, cracks are appearing in the dominance of lithium-ion batteries, which have ruled the market for the past 30 years. According to market research firm SNE Research, the global battery market size reached $185 billion in 2024, marking a 28% increase from the previous year. More notably, it is expected to grow at a compound annual growth rate (CAGR) of 15.8% to reach $450 billion by 2030.
The backdrop of this rapid growth includes the explosive expansion of the electric vehicle market and the soaring demand for energy storage systems (ESS). According to the latest report by the International Energy Agency (IEA), global electric vehicle sales in 2024 reached 14.7 million units, a 35% increase from the previous year, with total battery capacity amounting to 950GWh. Notably, the Chinese market accounts for 63% of the total, maintaining its position as the largest market, while growth in the European and North American markets is also rising sharply. In Europe, 3.2 million electric vehicles were sold, a 42% increase from the previous year, and the U.S. recorded a 28% increase with 1.8 million units sold.
However, the biggest topic in the battery industry in 2025 is undoubtedly the commercialization of solid-state batteries. Japan’s Toyota began small-scale production of solid-state batteries at the end of 2024, showcasing advantages such as 2.5 times higher energy density compared to existing lithium-ion batteries, charging times reduced to under 10 minutes, and significantly lower fire risks. Toyota’s solid-state batteries achieved an energy density of 500Wh per kg, a 67% improvement over the highest level of commercialized lithium-ion batteries (300Wh/kg). Consequently, the driving range of electric vehicles is expected to increase significantly from the current 400-500km to 800-1,000km.
Korean battery companies are also swiftly responding to these changes. Samsung SDI announced the completion of a solid-state battery pilot line in November 2024 and plans to begin full-scale production in 2026. Samsung SDI’s solid-state batteries aim for a volumetric energy density of 900Wh/L, approximately a 50% improvement over current lithium-ion batteries. LG Energy Solution, as of the end of 2024, holds over 1,200 patents related to solid-state batteries and is accelerating research and development with a target for commercialization by 2027. SK Innovation has established a solid-state battery R&D center at its Georgia plant in the U.S., investing $5 billion annually to focus on next-generation battery technology development.
Chinese companies are also making notable moves. The world’s largest battery manufacturer, CATL (Contemporary Amperex Technology), surprised the market by launching the ‘Qilin’ battery 3.0 in the first half of 2024. This battery can drive 400km on a 10-minute charge and operates normally even at minus 30 degrees Celsius. CATL’s market share in the third quarter of 2024 was 37.8%, significantly ahead of second-place BYD (16.2%) and third-place LG Energy Solution (13.6%). BYD, based on its self-developed ‘Blade Battery’ technology, holds a dominant position in the lithium iron phosphate (LFP) battery market, recording a 43% market share in 2024.
Tesla, in the U.S., holds a unique position as both a battery manufacturer and the largest consumer. Tesla expanded its annual production of self-manufactured 4680 cylindrical battery cells to 100GWh in 2024, enough to supply approximately 1.3 million electric vehicles. Tesla’s 4680 batteries boast 5 times the energy density, 6 times the power output compared to the existing 2170 batteries, and a 14% reduction in manufacturing costs. CEO Elon Musk announced during the October 2024 earnings release that “by 2025, we plan to increase 4680 battery production to 300GWh, supplying 70% of Tesla’s total battery demand.”
The Explosive Growth of the Energy Storage Market and New Opportunities
Another growth driver for the battery industry is the rapid expansion of the energy storage system (ESS) market. As renewable energy generation surges, the need for large-scale energy storage facilities to stabilize power grids is becoming increasingly prominent. According to Bloomberg New Energy Finance (BNEF), the global ESS market size was $42 billion in 2024 and is expected to grow at an annual average rate of 22% to reach $145 billion by 2030. Particularly, utility-scale ESS installations are projected to increase nearly fourfold from 31GW in 2024 to 120GW by 2030.
In the U.S., the ESS market is rapidly growing due to the effects of the Inflation Reduction Act (IRA). In 2024, new ESS installations in the U.S. reached 14.3GW, a 95% increase from the previous year, with utility-scale installations accounting for 12.1GW of the total. California installed 5GW, accounting for 35% of the total, establishing itself as the largest market, followed by Texas (2.8GW) and Florida (1.9GW). Tesla’s Megapack system leads the U.S. ESS market with a 43% market share, with a single Megapack unit capable of storing 3.9MWh of electricity, enough to power approximately 3,600 households for a day.
China’s ESS market is also rapidly growing, supported by the government’s proactive policies. China’s new ESS installations reached 22.6GW in 2024, ranking first globally, a 78% increase from the previous year. The Chinese government has set a goal to expand cumulative ESS installation capacity to 120GW by 2030, providing subsidies covering 30% of ESS installation costs. CATL maintains a dominant 38% market share in China’s ESS market, followed by BYD (24%) and Guoxuan High-tech (12%).
South Korea’s ESS market has overcome a temporary slump due to fire incidents in 2019 and is back on a growth trajectory. In 2024, South Korea’s new ESS installations reached 2.8GW, a 34% increase from the previous year, with renewable energy-linked ESS accounting for 1.9GW, or 68% of the total. The South Korean government announced plans to expand cumulative ESS installation capacity to 25GW by 2030 under the ‘K-Battery Belt’ initiative, investing a total of 15 trillion won over the next six years. LG Energy Solution leads the South Korean ESS market with a 45% market share, followed by Samsung SDI (28%) and SK Innovation (18%).
ESS batteries require different characteristics compared to those for electric vehicles. While EV batteries prioritize energy density and fast charging performance, ESS batteries emphasize long-term safety and cycle life. Consequently, lithium iron phosphate (LFP) batteries are gaining attention in the ESS market. LFP batteries have 20% lower energy density compared to nickel-cobalt-manganese (NCM) batteries, but their cycle life is more than twice as long, they have excellent thermal stability, and they are 30% cheaper. BYD’s LFP batteries are verified to handle over 8,000 charge-discharge cycles and can be used for 25 years.
The competition for developing next-generation battery technologies is also intensifying. Sodium-ion batteries are gaining attention as an alternative to address the limitations and rising prices of lithium resources. CATL commercialized the world’s first sodium-ion battery in 2021, with an energy density of 160Wh/kg and capable of 80% charge in 15 minutes. Sodium is over 1,000 times more abundant than lithium and 70% cheaper, making it highly applicable for ESS use. China’s sodium-ion battery market size is expected to grow from $1.2 billion in 2024 to $8.7 billion by 2030.
Lithium-sulfur batteries are also being highlighted as next-generation technology. They theoretically achieve 5 times higher energy density (2,600Wh/kg) compared to lithium-ion batteries, and sulfur is an abundant resource on Earth. Companies like the UK’s Oxis Energy and Germany’s Sion Power are conducting research and development for the commercialization of lithium-sulfur batteries, expected to be first commercialized for drones and aircraft around 2027. South Korea’s LG Chem is also actively pursuing technology development, filing over 150 patents related to lithium-sulfur batteries in 2024.
The battery recycling market is also emerging as a new growth driver. As the replacement cycle for first-generation electric vehicle batteries begins in earnest around 2030, the volume of waste batteries is expected to surge. According to Circular Energy Storage, global waste battery volumes are expected to reach 950,000 tons by 2030, with the potential to recover key raw materials worth $14 billion, including 110,000 tons of lithium, 180,000 tons of nickel, and 20,000 tons of cobalt. South Korea’s SungEel HiTech has developed technology to recover over 95% of lithium from waste batteries and plans to operate a recycling plant with an annual processing capacity of 10,000 tons starting in 2025.
Future Outlook and Investment Opportunities
As we enter the second half of 2025, the future of the battery industry looks brighter than ever. Goldman Sachs recently projected that the global battery market will grow at an annual average rate of 18% to reach $520 billion by 2030. Particularly, the solid-state battery market is expected to explode from $300 million in 2025 to $25 billion by 2035. This corresponds to an annual growth rate of 63%, marking the fastest technological transition in the history of the battery industry.
From an investment perspective, South Korea’s three major battery companies (LG Energy Solution, Samsung SDI, SK Innovation) are still considered attractive investment destinations. Morgan Stanley raised its target price for LG Energy Solution from 550,000 won to 680,000 won, citing the commercialization of solid-state batteries and benefits from the North American IRA as key reasons. Samsung SDI’s operating profit margin improved by 2.1 percentage points to 8.3% in the third quarter of 2024 compared to the same period last year, and it is projected to achieve an operating profit margin of over 10% in 2025 with preparations for solid-state battery mass production and ESS business expansion.
The technological pursuit and price competitiveness of Chinese companies cannot be ignored. CATL’s third-quarter 2024 revenue increased by 38% year-on-year to 135 billion yuan (approximately 26 trillion won), and net profit increased by 45% to 13.2 billion yuan (approximately 2.5 trillion won). CATL plans to operate 20 battery plants in 10 countries worldwide by 2025, with a total production capacity of 800GWh. This is enough to supply about 10 million electric vehicles, accounting for 40% of the global electric vehicle market.
Changes in U.S. government policy are also expected to have a significant impact on the battery industry. The Biden administration announced in December 2024 that it would increase tariffs on Chinese battery materials from the current 25% to 50% and confirmed plans to exclude federal tax credits for electric vehicles using Chinese battery materials starting in 2026. Consequently, opportunities for South Korean and Japanese battery companies to expand their market share in the U.S. are expected to increase.
From a technological perspective, 2025 is expected to be the ‘tipping point’ for the battery industry. With the simultaneous commercialization of various innovative technologies such as the commercialization of solid-state batteries, the application of silicon nanowire anodes, and the introduction of AI-based battery management systems (BMS), a significant improvement in battery performance is anticipated. In particular, AI BMS has been verified to extend battery life by over 30% and improve charging efficiency by 20%, and it is expected to be applied to premium electric vehicles starting in the second half of 2025.
The future of the battery industry will transcend mere energy storage to play a central role in the entire energy ecosystem. As electric vehicles, ESS, smart grids, and renewable energy are connected into an integrated system, batteries are expected to become the key infrastructure connecting all these elements. By around 2030, the concept of a ‘battery internet’ is expected to become a reality, with millions of batteries connected in a network to trade and optimize energy in real-time. In this paradigm shift, companies that simultaneously drive technological innovation and market expansion will emerge as winners in the next-generation energy era.
*This analysis is based on publicly available market information and industry reports, and additional research and expert consultation are recommended for investment decisions.*
