3Q 2021

The Divergence Between Battery Chemistries for Distributed Solar and Storage

Advanced battery technologies for transportation and stationary energy storage have quickly evolved in recent years to prioritize performance and cost. Each storage application requires unique needs that have led to battery markets experiencing rapid developments in terms of chemistry and composition. Outside forces such as global supply chains have also heavily influenced what chemistries remain viable in the midst of accelerating adoption trends for EVs and energy storage systems (ESSs).

Battery chemistries are increasingly influencing market trends due to the diversity of chemistry options advancing through commercialization phases. For example, some chemistries are more attractive for one application over another and depending on the demand for that application, may become more popular in the future. Focus on supply chains is also increasing as many battery manufacturers are moving away from chemistries that use expensive components that are scarce. Stakeholders such as US policymakers are diverting resources to the battery supply chain to analyze the country’s competitiveness among other leading powers.

This Guidehouse Insights report takes a close look at the market trends surrounding battery chemistries, analyzes the different forces of the battery value chain, and concludes with recommendations for stakeholders. Battery chemistry trends can be highly susceptible to global raw material supplies and regulatory oversight, therefore the market dynamics around both of these issues should receive special attention. 

Pages 16
Tables | Charts | Figures 6
  • What are key considerations for battery chemistry?
  • What developments are being made by different stakeholders to advance different chemistries?
  • What should key industry players do to improve competitiveness?
  • What are differences between popular battery chemistries and their safety profiles?
  • Who are leading stakeholders that are influencing available battery chemistries?
  • EV manufacturers
  • Battery storage manufacturers
  • Energy storage developers
  • Battery storage integrators
  • Energy storage regulators and policymakers
  • Investor community




Lithium Ion Chemistries Dominate the Market

Stationary and Transportation Li-Ion Chemistries Are Cost-Effective
NMC and LFP Li-Ion Chemistries Gain Traction in Battery Markets

Limited Cobalt and Lithium Supplies Could Challenge Li-Ion Deployment

Demand for EVs Might Stymie the Material Supply for Stationary Storage Systems

Concerns Grow Over the Global Battery Value Chain

Key Industry Players Enact Innovation Across the Value Chain

Battery Supply Competition Increases Between the US and China

China Has a Strong Hold On LFP Batteries

The US Plans for Increasing Supply Chain Control

Global Players Affect Variances Between EV and Stationary System Chemistries

EVs and Stationary Storage Systems Have Differing Requirements

Divergence Between Chemistries Might Be Application-Based

All Stakeholders Should Assess Value Chain Opportunities

OEMs Should Be Forward-Looking

Integrators Can Improve Deployments by Tapping into Application-Specific Chemistries

Regulators May Alleviate Supply Uncertainties

  • Advantages of Li-Ion Over Lead-Acid
  • Battery Value Chain: 2021
  • US Competitive Position in Li-Ion Batteries
  • Large-Format Li-Ion Battery Cell Pricing Forecast, Base/High/Low Case, Global Averages: 2021-2030
  • Light Duty Battery EV Li-Ion Battery System Pricing by Component, 60 kWh, Global Averages, Base Case: 2021-2030
  • NMC and LFP Advantages and Disadvantages
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