Industry research
Scope
US
Companies
53
Table of contents
What does the Battery market landscape look like in the US?
China remains a leader in the global market, capturing ~80% share across every stage of the value chain - from the mining and processing of critical materials to the final manufacturing of batteries. The US remains behind in the race but aims to achieve independence by focusing on research and development initiatives, introducing government measures to counter Chinese competitors (e.g. tariffs) and advancing efforts to reshore battery manufacturing. In addition, the US market will see an increase in consolidation and strategic partnerships to vertically integrate operations, share expertise and secure greater access to critical materials, such as OEMs and automakers investing in battery players to innovate and ensure accelerated development.
What is the level of investor activity in the US Battery industry?
PE-led interest has been moderate, with ~38% of identified assets being sponsor-backed (January 2025). Investors are primarily attracted by the crucial role of batteries in the ongoing sustainability trend, the US government’s efforts to reduce dependence on China by promoting domestic battery manufacturing and continuous innovations that drive higher battery performance at lower costs. On the other hand, the scarcity of raw materials, US government initiatives to boost short-term oil and gas production and Asian manufacturers continuing to expand their US presence through vertical integration serve as detractors for investors.
What are the key ESG considerations in the US Battery industry?
ESG topics mainly revolve around environmental and social aspects. Players in the battery market positively contribute by facilitating the storage of sustainable energy and enabling the transition away from fossil fuels. However, battery manufacturing itself generates significant pollution (e.g. emissions, toxic fumes) and consumes substantial natural resources (e.g. water, rare earth minerals). Incumbents aim to address this by implementing energy efficiency measures and adopting recycling strategies. On the social side, issues primarily relate to unethical practices in raw material sourcing and workplace safety. As such, identified players prioritize full traceability across their supply chains and establish dedicated teams to ensure environmental health and safety.
The North American lithium-ion battery market is expected to grow from ~$15.6bn in 2023 to ~$35.6bn in 2028, demonstrating a CAGR of +18.0% (Technavio, February 2024)
According to McKinsey & Company (August 2023), the global market for battery energy storage systems was estimated at ~$50bn in 2022 and is forecasted to be worth ~$135bn by 2030 (+15.2% CAGR 2023-2030)
Ongoing sustainability trend supported by international agreements that aim to accelerate the transition away from fossil fuels and limit global warming to a maximum of +1.5°C by 2050. Batteries are crucial to the energy transition, bridging renewable energy generation and final consumption, with demand expected to rise significantly in the short term (interview by Gain.pro; BBC, January 2025; International Energy Agency, April 2024)
The US government's ongoing efforts to reduce dependence on China through substantial investments promoting domestic battery manufacturing. This is further strengthened by import tariffs that disadvantage Chinese competitors, providing additional tailwinds for US incumbents (Carnegie, October 2024; Foreign Policy, October 2024; Iris Metals, March 2024)
Continuous battery innovations result in improved performance at lower costs, enabling large-scale deployment in industrial applications (e.g. power grids). Batteries serve a crucial role in managing grid congestion by balancing electricity supply and demand, saving up to ~$20bn annually in the US by enabling access to the lowest-cost generation (RMI, January 2025; Wood Mackenzie, May 2024; Rabobank, January 2024)
The scarcity of critical raw materials (e.g. cathode and anode active materials) poses significant challenges to scaling domestic battery manufacturing and results in inflated costs for US battery players. To meet the demand for these materials, US incumbents must rely on cross-border suppliers, forcing them to compete with foreign peers (Utility Dive, November 2023)
US government initiatives aimed at boosting short-term oil and gas production along with measures slowing down EV adoption (e.g. removal of EV tax credits) hinder the transition to EVs and sustainable energy storage, hampering demand for battery manufacturers (Reuters, November 2024; BPM, November 2024; ING, June 2024)
Asian manufacturers with a dominant position in the US continue to expand their manufacturing operations and seek further vertical integration, thereby threatening US incumbents (McKinsey & Company, April 2024; IEA, April 2024)
With the full report, you’ll gain access to:
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 53 private companies, incl. financials, ownership details and more.
A view on all 190 deals in the industry
ESG assessments with highlighted ESG outperformers
