The automotive manufacturers have been increasing spending towards launching electric vehicles to limit the dependency on fossil fuels, namely crude oil and natural gas. The supportive government initiatives aimed at upscaling the charging infrastructure output of electric vehicles in their respective countries have opened new avenues. For instance, in February 2023, the U.S. government announced plans to establish a domestically produced electric vehicle charging network. This initiative is expected to increase the network of more than 500,000 EV chargers in the U.S. and is expected to ensure the government to ensure that EVs account for at least 50% of new car sales by the end of 2030.

Over the past few years, EVs have been gaining popularity on a global level. According to IEA,  global EV volumes witnessed growth of 40% in 2020 and is expected to continue to increase in the next few decades. The electric mobility manufacturers have been focusing on ensuring the delivery of a powerful car battery that charges quickly and retains its capacity for long durations. As a result, automobile manufacturers are prospecting for advanced chemicals that are capable of inducing some of the attributes of batteries, such as quick charging features, high heat resistance and superior efficiency. This demand aimed at striving for the inclusion of chemicals and materials which are customized for specific applications of EVs, is expected to expand the scope of battery additives and finished formulations in the near future.

The battery additives market is expected to witness market growth at a rate of 9.33% in the forecast period of 2021 to 2028.


Booming Electric Vehicle Market has led to Innovation in Battery Chemicals and Material Products

Inclusion of Best Quality Chemicals Aimed for Imparting the Attributes in EV Battery

Chemical manufacturing companies have developed numerous product forms that are intended for improving the maintaining the properties of lithium-ion battery elements such as cathode, anode, and electrolytes. These products include specialty additives, coatings and binders. For instance, specialty additives are incorporated in influencing the electrochemical reactions in the battery and thus improve the battery’s performance.

Shifting inclination towards limiting the battery costs to achieve efficiency among EV manufacturers is expected to open new avenues. As a result, the majority of OEMs recognized that the inclusion of advanced materials such as plastics, silicone, mica, and other thermal materials for the production of electric vehicle batteries is projected to play a key role in reducing system costs.

It is well known that the overheating of Li-Ion batteries results in reducing the battery’s performance and thus causes breakdown. The inclusion of alternative composite materials as alternatives to metals plays a key role in enhancing the battery’s performance. As a result, EV manufacturing companies are using silicon in the battery’s electrodes, which will increase the life of electric vehicles by several times.

Some of the key chemical companies have been actively showing interest in launching advanced products aimed at enhancing battery life. For instance, in June 2023, PETRONAS launched a new graphene-based solution conductive additive for Lithium-ion (Li-ion) batteries under the brand name, ProCharge+. These specialty additives find applications in batteries that are aimed at manufacturing EVs, automatic guided vehicles, and robotic equipment. Petronas claimed that ProCharge+ is capable of being compatible with various Li-ion battery chemistries and thus enables its seamless integration into the existing production processes. ProCharge+ will reduce electrode volume resistivity by 90 percent and more than 60 percent as compared with carbon nanotubes (CNT).

Strong Sentiment Towards Acceptance of EVs on a Global Level

The automotive sector has been prospecting various ways to shift the dependency on crude oil refined products. As per IEA, it was estimated that more than 10 million electric cars were sold worldwide in 2022 and is expected to grow by more than 35% to reach more than 14 million. The majority of electric car sales were contributed from the three countries namely the U.S., China, and Europe. Having said this, China accounted for more than 60% of global electric car sales by the end of 2023. Furthermore, Europe and the U.S. have witnessed YOY growth rate (s) 15% and 55%, respectively in 2022 as compared to 2021.

U.S. has remained one of the prominent country markets for EVs due to supportive outlook towards limiting greenhouse emissions. Furthermore, in 2023, leading companies such as Toyota, Honda, Ford Motor Company, General Motors, and Panasonic have announced plans for manufacturing EVs in automotive clusters such as North Carolina, Michigan, Ohio, Missouri, and Kansas. The U.S. government announced the Inflation Reduction Act, which provides incentives for buyers of new and used EVs. Furthermore, this act also encompasses the crediting to the manufacturers retool existing facilities and build new manufacturing, and grants to deploy zero-emission heavy-duty vehicles in the U.S.

The successful implementation of regulations employed by the European Commission aimed at reducing greenhouse gas emissions coupled with a positive outlook towards the adoption of green economy in key country markets, including Germany, U.K., and France, is expected to have a positive impact on the Europe EV industry. It was estimated that more than 900,000 new vehicles were registered in Europe in August 2023 and has witnessed an increase of 102% from August 2022. This growth is attributed to the increasing demand for battery electric vehicles in countries namely Germany, Greece, Belgium, Portugal, and Luxembourg.

A push of various governments towards a green economy has paved the way for lucrativeness for EV industry participants in emerging economies namely Thailand, India, and Indonesia. For instance, the government of India has launched a series of policies such as FAME-II, PLI SCHEME, Battery Swapping Policy, and Special Electric Mobility Zone, from the period of 2015 to 2023. Such initiatives have the worth of USD 3.2 billion incentive program, which has attracted investments of more than USD 8.3 billion. Thailand and Indonesia had reported increased shares of electric cars in total domestic sales to 3% and 1.5%, respectively. The aforementioned factors coupled with expanding the electric charging infrastructure in Thailand, India and Indonesia is expected to promote the scope of EV value chain industry participants in the near future.

Positive Response from Chemical Companies to Ensure Continuous Supply to EV Manufacturers

Supportive government policies aimed at enhancing the chemical industry output in India have paved the way for companies to launch new products aimed at specialty applications such as EVs, agrochemicals and pharmaceuticals. For instance, in February 2024, GFCL EV Products announced an investment of more than INR 6,000 crore to expand the production capacity of EV battery materials in the next four years. The company is planning to ensure access to specialty chemicals and materials aimed at targeting the 200 GWh/year of EV and energy storage system (ESS) battery solutions.

Leading chemical company BASF SE has been closely monitoring the market movement and has been actively strategizing new ways to keep engaged in the EV value chain. In 2023, BASF inaugurated a cathode material factory in Schwarzheide, Germany which will be catering to the demand for 400,000 electric vehicles per year. Furthermore, in May 2022, BASF SE and Nano One Materials Corp signed a joint development agreement (JDA) to develop a process with reduced by-products for the commercial production of next-generation cathode active materials (CAM). These products will be based on BASF’s HEDTM-family of advanced CAM through the use of Nano One’s patented One-Pot process and metal direct to CAM (M2CAM) technologies.

In June 2021, Finland-based Terrafame announced the production of a new battery chemicals plant and equipment testing. This plant will be capable of delivering battery material named nickel sulfate, and will be capable of ensuring the batteries to more than one million electric cars per year. The expansion of production capacity in battery chemicals and materials by above mentioned companies is expected to ensure the access of raw materials to EV manufacturers over the next few years.

Innovation Aimed at Development of Next-Generation Materials for Electric Battery

The innovation in battery packs and their mass production has resulted in promoting the requirements for smart, automated, electrified and low-carbon solutions. In November 2022, U.S. based Dow Chemical launched a new high bonding adhesives under the brand name ORATRON™ MA 8200S. The product is capable of improving the safety, durability, integrated assembly and overall performance of EV battery packs. Dow Chemical claims that VORATRON™ MA 8200S comply with the European Union RoHS and REACH regulations, which approve the products’ sale in Europe.

In May 2022, General Motors and POSCO Chemical announced plans to build a new battery materials plant at Quebec, Canada. The government of Canada will support the plant for building a facility of producing cathode active material (CAM) with an investment of USD 400 million. These materials will be finding applications in manufacturing GM’s Ultium batteries for vehicles such as Chevrolet Silverado EV, GMC Hummer EV and Cadillac Lyriq. It is planned that GM will be boosting EV production capacity to more than 1 million by 2025 in North America. The company is planning to ensure access of raw materials such as lithium with Controlled Thermal Resources, rare earth materials, alloy flakes, and permanent magnets. As a result, GM and other EV companies are expected to push for backward integration to ensure access of battery materials for their captive production.


Positive outlook towards the EV industry as a result of supportive outlook towards enhancing the electric mobility production output on a domestic level by various governments is projected to expand the scope of chemicals, additives and materials used in batteries. Furthermore, the rising spending by EV manufacturers towards limiting battery costs and enhancing efficiency is expected to increase the utility of additives and chemicals used in EV production.

The continuous access of raw materials and strong labor support in China and India is projected to pave the way for chemical producing companies to increase spending on the development of advanced materials aimed for specific applications, including EVs. Furthermore, investment-friendly policies from countries of Saudi Arabia and UAE towards shifting reliance from the upstream sector, along with the establishment of new EV battery production unit in Algeria is expected to open new avenues for EV value chain industry participants, including battery additives and chemicals manufacturers.

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