EV Battery Market Surges 30% to 1.2 TWh in 2025; LFP Dominates >55% Share, Driving 8% Price Drop Amidst Non-China Nickel Push

September 20, 2026

Crux Investor UK

Overview

The EV battery market expanded by 30% to 1.2 TWh in 2025, driven significantly by the cost-effectiveness of Lithium Iron Phosphate (LFP) batteries, which captured over 55% of global deployments. This growth spurred lithium demand across both LFP and nickel-rich chemistries, with LFP offering a >40% cost advantage over NMC, resulting in an 8% average battery price drop that intensified profit pressures throughout the supply chain. Despite China maintaining over 80% of manufacturing capacity, non-Chinese markets still rely on nickel-containing chemistries for approximately 80% of their batteries, highlighting the urgent need for diversified, non-China nickel supply chains.

In Depth

Key Findings

The electric vehicle (EV) battery market experienced a phenomenal 30% year-on-year growth in 2025, reaching 1.2 terawatt-hours (TWh) of deployment. This rapid expansion was largely influenced by an 8% average reduction in battery prices and the dominant market share of Lithium Iron Phosphate (LFP) batteries, which accounted for over 55% of global deployments.

Technical / Market Details

The 2025 surge in EV battery deployments significantly boosted demand for lithium in both LFP and nickel-containing chemistries. LFP batteries emerged as a market leader due to their substantial cost advantage, being over 40% cheaper than their Nickel Manganese Cobalt (NMC) counterparts. This aggressive pricing strategy accelerated EV adoption but simultaneously exerted considerable profit pressure across the entire battery supply chain, from raw material extraction to finished product manufacturing. China continues to be a pivotal player, controlling more than 80% of global EV battery manufacturing capacity. However, outside of China, approximately 80% of deployed EV batteries still rely on nickel-containing chemistries, making the securement of non-Chinese nickel supply a critical strategic imperative for international markets aiming to reduce geopolitical and supply chain risks.

Background & Context

The rapid evolution of the EV market transcends mere automotive innovation; it is a primary driver for advancements in the broader energy storage sector. The ascendancy of LFP batteries signals a growing preference for cost-efficiency, safety, and diversified resource sourcing over maximum energy density in many applications. Global supply chain resilience and mitigating geopolitical risks have become paramount, pushing many nations to seek diversification away from China-centric supply networks for critical materials like nickel. While declining battery prices are excellent for consumer adoption, they mandate relentless cost optimization and technological innovation at every stage of the value chain, from mining and refining to cell production and integration.

Strategic Significance & Outlook

The 2025 market trends clearly delineate the future trajectory for next-generation energy storage. One path involves the accelerated pursuit of cost-performance through LFP technology, while the other emphasizes the urgent need for non-Chinese nickel supply sources and a fundamental restructuring of global battery supply chains to reduce dependencies. These dynamics will catalyze further investments in novel mining and refining techniques, advanced recycling technologies, and the development of diverse battery chemistries. In the long term, sustained reductions in battery prices and continued performance improvements will broaden EV adoption and foster the development of grid-scale energy storage systems integrated with renewable energy sources. The intensifying competition will spur innovation, accelerating the transition towards a more sustainable and distributed energy infrastructure worldwide.

Source: https://www.cruxinvestor.com/posts/30-ev-battery-growth-expands-markets-for-lithium-non-china-nickel-supply

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