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The lithium-ion battery market will peak and then decline well within the next twenty years. Lithium-ion batteries face a slow but inexorable replacement by other ion batteries, starting with sodium-ion, then perhaps water-based zinc-ion batteries, which are the subject of a flood of research in 2024.

The alternatives promise 40% lower costs, superior safety and in some respects better performance. In addition, new needs are emerging that lithium-ion cannot possibly satisfy. They range from laser guns (mostly battery-supercapacitor hybrids) to grid storage for months or more (mostly gravity and underground compressed air storage, some redox flow batteries). After lithium-ion, even sales of all ion-batteries combined may decline within 20 years as the market shifts to what they can never deliver.

Let’s take a closer look.

Electric cars cease to be the largest segment, electronics needs less storage

The overall market will saturate as electric cars, the largest lithium-ion market, become commoditised and increasingly penalised or banned in cities. Electronics and some electric vehicles will even become zero energy devices (ZEDs) thanks to on-board energy harvesting, which will provide the whisper of power needed by new ultra-low power circuits. In addition, second-generation 6G communications, around 2035, could include high-power Reconfigurable Intelligent Surfaces RIS in the propagation path.

These could activate client devices such as smartphones and IOT nodes by Simultaneous Wireless Information and Power Transfer SWIPT, so that they require little or no on-board energy storage. Like RFID and anti-theft tags on steroids. They are all backscatter. Meanwhile, smartphone sales are falling, as is the percentage of their cost that is battery.

New market for pulse and high power density

A new market is opening up for pulse and very high power density storage for electromagnetic weapons, ultra high speed train regeneration and acceleration, and thermonuclear power generation where lithium-ion is useless. These need things like 10,000 cycle life at 200Wh/kg and 2kW/kg power density. By 2024, the sodium-ion capacitor research in “Low-crystallinity conductive multivalence iron sulfide-embedded S-doped anode and high-surface area O-doped cathode of 3D porous N-rich graphitic carbon frameworks for high-performance sodium-ion hybrid energy storages” Energy Storage Materials Volume 68, April 2024, 103368, claims something close. A burgeoning $20 billion sector awaits.

Much larger, the largest energy storage market segment will be Long Duration Energy Storage LDES. It will mostly have durations (Wh divided by W rating) of 12 hours to a month, covering wind and solar dead for longer, and implying sizes up to 10GWh. Although there are GWh deployments of lithium-ion batteries for less than eight hours duration, they are only a stopgap in the face of scalable, non-flammable, non-toxic alternatives that are coming in at a tenth of the levelised cost of storage and 20 times the life at that duration (very little recycling).

For example, solar-rich Queensland, Australia, will install the largest pumped hydro storage facility to store electricity “for up to months”. There is other gravity storage, with many plants in China lifting blocks (zero self-leakage) and the UK’s RheEnergise High-Density Hydro up mere hills being trialled.

There is also a full order book for proven compressed air in underground caverns such as old salt mines, with 84 days being the current record. There are already many orders for 12 hours or more with subsequent discharge, not even considering lithium-ion batteries. LDES will account for at least 30% of the total market by 2044, another no-go area for lithium-ion.

The goalposts have moved

The new realities are that energy storage needs to be non-flammable, minimally toxic, with almost no ancillary equipment such as firefighting, thermal or battery management, no scarce, expensive material or spacing requirements for the large ones, and very long life. Lithium-ion is making little or no progress in most of these areas.

Even for solar homes, some battery-supercapacitor hybrids and redox-flow batteries have been installed for those who want longer life, greater reliability and safety, and sodium-ion is in line for lower cost, having first appeared in cars in 2023.

Here come cheaper, better ion batteries

Sodium-ion batteries are being delivered, and a much lower price is certain, with significant production capacity now being installed – 40 plants with a planned capacity of 320 GWh, according to Benchmark. Such batteries use abundant sodium, iron and manganese.

They also save costs by not using copper anodes. In theory, sodium-ion batteries can have both high energy and power densities, so statements that the technology will only marginally undercut lithium-ion in terms of price and low-temperature performance, and have a much lower energy density, are only describing the initial situation.

There is also a flood of research into zinc-ion alternatives. This is also a cheaper system than lithium-ion, but clear advantages over sodium-ion are still unclear, but theoretically we have the prospect of excellent safety, energy density/power density and other advantages.

The recent preference for vanadium cathode compounds in zinc-ion battery research for high energy density does not necessarily reduce cost, but now a surge in hydrogel electrolyte work for them promises low self-leakage, minimal packaging, use in structural electronics and other benefits.

No sudden death for lithium

As we have shown, a number of factors now make it inevitable that lithium-ion batteries will peak in value sales within 20 years, with their use in grid storage and basic cars and smaller electric vehicles being the most immediately vulnerable. Nevertheless, lithium-ion will continue to ride high for some time due to familiarity, production capacity and some retained advantages. Major advances continue, such as the recent announcement by CATL of a major increase in energy density, valuable in vehicles and mobile electronics.

Possible scenario

One of our scenarios is shown in the figure. We show lithium peaking in 2037. If the disruptors prove stronger, it could be 2030. We suggest you use this as a food for thought and modify it with your own insights, but above all do not believe the many analysts who simply extrapolate.