Battery Technology Powers EVs, But Faces Cost, Materials, Innovation Challenges
The automotive industry’s pivot to electric vehicles (EVs) from internal combustion engines depends on a common technology: batteries. As a recent article on this topic states, “batteries are the backbone” of an electric automotive future.
As a result, automakers are building giant facilities to manufacture lithium-ion batteries, which EVs largely run on today. General Motors is building battery plants in Ohio and Tennessee. Ford is building in Tennessee and Kentucky. Tesla has gigafactories planned for Texas, Nevada, and elsewhere. The list goes on.
Meanwhile, supply chain and geopolitical considerations related to raw materials such as nickel and cobalt, which are used in the manufacturing of these batteries, present significant obstacles. Accordingly, the innovation race is on to create next-generation battery technology as the industry seeks to develop batteries that are cheaper, faster to charge, and less vulnerable to raw material shortages.
This blog post takes a closer look at these challenges and that innovation race. But let’s start with a glimpse at the sizable growth that’s expected for this important segment of the automotive industry, and the cost issues that are influencing this growth.

High Voltage Growth for EV Batteries
In 2020, the global EV battery market size was nearly $22 billion. Last year, it was estimated to be more than $27 billion. By 2028, industry sources estimate the market to reach over $154 billion.
This projected growth is despite the fact that EV sales in the U.S. accounted for only about 4% of overall sales in 2021. Why the expected growth? Because things are changing. Automakers are wired for an electric future. As our recent EV trend report noted, EV investments rose by 41% just between 2020 and 2021, and will total $330 billion between 2021 and 2025. GM and Volkswagen plan to spend $35 billion and $42 billion respectively on electric and autonomous vehicles from 2020 to 2025. Jaguar plans to sell only electric cars by 2025, Volvo by 2030. GM hopes to be selling only electric passenger vehicles by 2035.
Consumers are also turning to EVs. Ford’s new electric F-150 pickup truck, the Lightning, which hasn’t even gone on sale yet, already has 200,000 reservations. In December, Europeans for the first time bought more electric cars than diesels, once the most popular option there. In addition, the rising price of gas caused in part by the conflict in Ukraine will further push consumers to EVs.
EV Battery Costs Will Influence Consumer Choices
That said, the massive growth that’s predicted for the EV battery market and the electric-vehicle market overall will hinge on the cost of EV batteries. Some in the industry say that batteries will help determine the price of new cars and could become the defining feature of vehicles.
Several industry sources say that the likelihood of mainstream adoption of EVs will be more a question of cost than range—the distance an EV will go on a fully charged battery. So much for all of that talk about range anxiety.
Costs, for now, have come down. Looking at what EV batteries used to cost and what they cost now, prices have declined. However—and this is a big however—increasing EV battery demand, global inflation, a struggling supply chain, and raw material shortages may move prices significantly higher.

EV Battery Production Faces Supply Chain, Geopolitical Challenges
China’s dominant position in the lithium-ion supply chain is expected to continue, at least for now. The majority of today’s battery manufacturing is done in China and South Korea. And those manufacturers—plus other Asian-based suppliers—continue to face supply chain constraints such as inflated air freight costs, ongoing shortage of cargo ships, clogged seaports, shutdowns due to the pandemic, and so on.
So, with these supply shortages, there has been a renewed push to onshore supply to North America. For example, President Biden’s infrastructure bill allocates $6 billion in funds to the Department of Energy (DOE) for domestic supply chain manufacturing. The idea: You reduce your supply chain risk by bringing production closer to the point of consumption. Hence the move by several OEMs to build their EVs closer to home.
However—yes, another however—a geopolitical challenge faces this onshoring plan because those Chinese, South Korean, and other Asian suppliers mentioned earlier control the majority of the natural resources and raw materials like nickel and cobalt that are needed for EV batteries. By some estimates, the mines of the Democratic Republic of the Congo in Africa hold around 70% of the world's reserves of cobalt, crucial for lithium-ion batteries, and most of those mines are Chinese-owned or controlled.
Therefore, to reduce the reliance on energy dense lithium-ion batteries that require these raw materials, the race is on to develop different kinds of batteries, with different chemical makeups.
An Innovation Race Toward Next-Generation EV Batteries
This innovation race is really a chemistry race. It’s a sprint to develop battery technology that’s less dependent on those raw materials mentioned, but also to develop technology that leads to cheaper, more efficient, and more durable EV batteries.
Most lithium-ion batteries used in EVs rely on nickel, manganese, and cobalt. Some industry sources predict that a shift will occur this year and next from nickel-manganese-cobalt compositions to lithium phosphate compositions or LFP batteries. LFPs reportedly cannot store as much energy per pound, but they are less expensive and last longer. Along these lines, there is also research and development occurring to create so-called solid-state batteries, which wouldn’t just change the chemistry and/or ingredients of EV batteries, but also the overall way they are constructed. A launch of solid-state battery types is likely several years away.
Protolabs and EV Battery Development
Given that the automotive industry is a segment our company serves, we’ve seen the development of both EVs and EV batteries closeup.
On the vehicle side, we’ve partnered with product designers and engineers from OEMs and other automotive-related companies to manufacture plastic injection-molded fixtures, housings, and other parts. On the EV-battery development side, we’ve helped companies prototype and test a range of items such as enclosures, housings, and other plastic components. Plastic components are often used in the automotive industry because the material helps with light-weighting.
Notably, the pace of this innovation is fast. Rapid prototyping is needed to bring next-generation battery technology to market. With our industry leading lead time, we are especially adept at quickly developing components used to iterate and test those designs.
Beyond just the batteries, it’s clear that the overall pivot to EVs is upon us, even though supply chain, raw material, design, and technology challenges lie ahead. Ultimately, the switch to EVs will create an emissions-free future and a dramatically changed automotive landscape.