Battery Revolution

In a rapidly evolving world where the race to achieve sustainability is intensifying, it has become increasingly clear that battery technologies stand at the forefront of this transformation. I firmly believe that governments around the globe should prioritize support for battery producers and investors, creating an environment where these innovations are recognized as the most attractive investment opportunity. By doing so, we can accelerate the clean energy transition, ensuring that batteries—key enablers of renewable energy, electric vehicles, and efficient energy storage—become the cornerstone of our sustainable future.

A Surge in Global Energy Investment Toward Clean Energy in 2024

According to a report by the International Energy Agency (IEA), global energy investment is projected to surpass USD 3 trillion for the first time in 2024, with a significant shift toward clean energy technologies and infrastructure. Over USD 2 trillion of this investment will be funneled into renewable energy, grids, and storage, reflecting a rapidly growing commitment to sustainable energy solutions. This marks a considerable change from the past, as investments in clean energy have not only accelerated since 2020 but have now overtaken the total expenditure on fossil fuels such as oil, gas, and coal.

Clean Energy on the Rise Despite Economic Challenges

As the global economy grapples with the end of the era of cheap borrowing, certain investments are being hampered by rising financing costs. However, these challenges have been somewhat mitigated by the easing of supply chain pressures and a notable reduction in prices for key components. Solar panel costs, for instance, have plummeted by 30% over the past two years. Similarly, the prices for essential minerals and metals, particularly those required for battery production, have seen significant declines, bolstering the feasibility of clean energy projects.

Regional Disparities in Clean Energy Investment

The IEA report has long highlighted the uneven distribution of energy investment, particularly the shortfall in clean energy investments in emerging market and developing economies (EMDE) outside of China. While there are signs of improvement, with clean energy investments in these regions expected to reach USD 320 billion in 2024—an increase of over 50% since 2020—these figures still trail behind the progress seen in advanced economies and China. The bulk of these gains stem from increased investments in renewable power, now accounting for half of all power sector investments in these regions. Countries such as India, Brazil, and several in Southeast Asia and Africa are seeing the benefits of new policy initiatives, well-executed public tenders, and enhancements in grid infrastructure. Notably, Africa’s clean energy investments are expected to nearly double from 2020 levels, reaching over USD 40 billion in 2024.

Yet, despite this progress, the growth in clean energy investment in many of the world’s least-developed economies remains from a low base. These regions face significant obstacles, including high levels of debt, which continue to stymie their progress. By 2024, EMDE outside of China are expected to account for just 15% of the global clean energy investment—a figure far too low to meet the dual objectives of ensuring universal access to modern energy and addressing the growing energy demands sustainably.

Solar Power Leading the Transformation

In the power sector, investment in solar photovoltaic (PV) technology is expected to exceed USD 500 billion in 2024, surpassing investments in all other power generation sources combined. Despite a slight moderation in growth due to declining PV module prices, solar power remains at the forefront of the ongoing transformation in the energy sector. Remarkably, each dollar invested in wind and solar PV in 2023 yielded 2.5 times more energy output than a similar investment made a decade ago.

In 2015, for every dollar invested in clean energy, about two dollars were invested in fossil fuels. By 2024, this is expected to change drastically, with ten dollars going into clean energy for every dollar in fossil fuels. This big shift towards solar and wind energy has significantly lowered electricity prices in many countries. In some cases, prices have even dropped below zero during times when solar and wind power are generating a lot of energy. This situation highlights the increasing need for more investment in energy storage and grid upgrades to better manage these fluctuations.

The Role of Nuclear Power and Grid Investments

In addition to renewables, investments in nuclear power are poised to rise in 2024, with its share of clean power investments climbing to 9%, following two years of decline. Total investment in nuclear energy is expected to reach USD 80 billion in 2024, nearly doubling the lowest level recorded in a decade in 2018.

Grids, often described as the bottleneck of energy transitions, are finally seeing increased investment. After stagnating around USD 300 billion annually since 2015, grid spending is set to hit USD 400 billion in 2024, spurred by new policies and funding, particularly in Europe, the United States, China, and parts of Latin America. However, while advanced economies and China dominate global grid investment, spending remains alarmingly low in other regions.

The Next Frontier

Investment in battery storage, another critical component of the clean energy transition, is on the rise and is projected to exceed USD 50 billion in 2024. However, the distribution of this investment remains heavily skewed, with advanced economies and China dominating the market. In 2023, for every dollar invested in battery storage in these regions, only a cent was invested in other EMDEs, highlighting a stark disparity.

Furthermore, according to data from Statista, battery makers have emerged as the leading recipients of venture capital investments in both early-stage and growth-stage financing. In 2023, growth-stage investments in battery manufacturers reached an impressive 3.46 billion U.S. dollars. This figure significantly outpaces the 806 million U.S. dollars allocated to battery recycling and reuse ventures at the same stage, highlighting the intense focus and confidence investors have in the battery manufacturing sector as a key driver of the clean energy transition.

Noted by Mordor Intelligence, the global battery market is expected to register a compound annual growth rate (CAGR) of 16.64% during the forecast period, reaching a value of USD 132.44 billion by the end of 2024. The market, which faced setbacks during the COVID-19 pandemic in 2020, has since recovered to pre-pandemic levels. Over the long term, the market’s growth is anticipated to be driven by factors such as declining lithium-ion battery prices and the increasing use of automotive batteries in electric vehicles. However, the market faces challenges, including a mismatch in the demand and supply of raw materials for battery manufacturing, which could hinder growth.

Automotive Batteries Expected to Witness Significant Growth

The automotive battery segment is expected to see substantial growth during the forecast period, largely due to the shift from internal combustion engine (ICE) vehicles to electric vehicles (EVs) driven by environmental concerns. Lithium-ion batteries, which are crucial for EVs due to their high energy density and low maintenance requirements, are at the forefront of this growth. In 2021, the global stock of electric cars reached 16.49 million units, a 9% increase from the previous year, further propelling the demand for lithium-ion batteries.

Significant advancements in automotive battery technology are also contributing to this growth. For instance, Nexeon Limited licensed its advanced silicon anode materials technology to SKC Co. Ltd in 2022, and Panasonic Corporation announced the establishment of a new production facility for large cylindrical lithium-ion batteries in Japan.

Strategic Shifts in Global Clean Energy Manufacturing

The surge in clean energy spending is not solely driven by environmental goals. Major economies are increasingly adopting new industrial strategies to boost clean energy manufacturing and strengthen their market positions. In the United States, clean energy investment is projected to exceed USD 300 billion in 2024, a 1.6-fold increase from 2020, outpacing investments in fossil fuels. The European Union is expected to allocate USD 370 billion to clean energy, while China, leveraging its large domestic market and rapid growth in key industries like solar cells and lithium battery production, is set to spend nearly USD 680 billion in 2024.

The Pivotal Role of Government Support

Government support is not merely a matter of providing financial incentives; it is about creating an ecosystem where innovation in battery technologies can thrive. This involves ensuring access to raw materials, fostering research and development, and enabling the construction of essential infrastructure like gigafactories. By prioritizing battery technologies, governments can drive down costs, accelerate technological advancements, and enhance the global competitiveness of their industries.

Moreover, this support must extend beyond mere production to include the entire lifecycle of batteries, from recycling to reuse. As the Statista data shows, while significant venture capital is flowing into battery manufacturing, investments in battery recycling and reuse are lagging behind. Governments can bridge this gap by implementing policies that promote circular economy principles, ensuring that batteries are not only produced sustainably but are also disposed of or recycled in an environmentally friendly manner.

The Future of Energy Storage and Sustainability

As we move forward, the integration of batteries into various sectors will be key to achieving energy sustainability. Batteries are central to the viability of renewable energy sources like solar and wind, which are inherently intermittent. By storing excess energy generated during peak production times and releasing it when production dips, batteries can smooth out the supply of renewable energy, making it a more reliable and consistent power source.

In the transportation sector, the rise of EV is perhaps the most visible sign of the shift toward battery-powered solutions. As the automotive battery market continues to grow, driven by advancements in lithium-ion technology and increasing consumer demand for EVs, the future of transportation looks increasingly electric. However, this shift also brings challenges, particularly in terms of raw material supply and recycling. It is here that government intervention can play a decisive role in ensuring that the growth of the EV market is both sustainable and equitable.

A Global Perspective on Battery Market Growth

According to Mordor Intelligence, the global battery market is set to grow at a compound annual growth rate (CAGR) of 16.64%, reaching a value of USD 132.44 billion by the end of 2024. This growth, while promising, is not without its challenges. The supply-demand mismatch for raw materials, for example, could create bottlenecks that stymie growth unless addressed through strategic interventions.

Asia-Pacific is expected to dominate the global battery market, with China, India, Japan, and South Korea leading the charge. This region’s dominance is driven by its robust manufacturing base, growing demand for EVs, and strong governmental support for clean energy initiatives. However, to ensure global energy equity, it is crucial that other regions, particularly emerging markets and developing economies, also receive the support they need to develop their battery industries.

Israel’s battery and energy storage startups are poised to play a crucial role in the global transition toward cleaner energy and more efficient storage solutions. Among these innovators, StoreDot stands out with its groundbreaking ultra-fast charging technology, which could revolutionize the EV industry. By enabling vehicles to recharge in just minutes, StoreDot is addressing one of the key barriers to widespread EV adoption: charging time. As the demand for EVs continues to soar globally, StoreDot’s future looks bright, with potential partnerships with major automakers and an expanding influence in the EV market. Similarly, Addionics is reshaping the landscape of battery design with its smart 3D electrodes. This technology promises to significantly enhance battery performance by increasing energy density, power, and longevity, which could be crucial for a variety of applications, from consumer electronics to electric vehicles. As industries continue to seek more efficient and longer-lasting batteries, Addionics is well-positioned to lead in providing next-generation solutions that meet these needs.

Phinergy brings a different approach to the energy storage challenge with its metal-air batteries, which utilize metals like aluminum and zinc to store energy. These batteries offer a high energy density, making them ideal for applications that require long-term energy storage, such as in electric vehicles or backup power systems. As the world increasingly looks for sustainable alternatives to lithium-ion batteries, Phinergy’s metal-air technology could become a vital component in the energy storage mix, especially in sectors where energy efficiency and sustainability are paramount. Electriq~Global is pioneering a novel hydrogen-based energy storage solution, which is both safe and efficient, offering a compelling alternative to traditional hydrogen storage methods. This technology could find applications across various sectors, including transportation and stationary power, particularly as the world transitions to hydrogen as a key component of the clean energy ecosystem.

Collectively, these and other startups are not only driving innovation within Israel but are also positioning themselves as key players in the global energy market. Their technologies address some of the most pressing challenges in energy storage and electric mobility, and as these sectors continue to grow, the future for these Israeli startups looks exceedingly promising. With the increasing focus on sustainability and the global push for renewable energy, these companies are likely to attract significant investment, forge strategic partnerships, and expand their influence on the world stage. Their success could be instrumental in shaping the future of energy storage and electric transportation, contributing to a more sustainable and efficient global energy system.

Conclusion: The Imperative of Strategic Investment

In conclusion, the path to a clean and sustainable future is one that is paved with batteries. From enabling the widespread adoption of renewable energy to driving the electric vehicle revolution, batteries are at the heart of the energy transition. However, this transition will only be successful if it is supported by strategic government interventions that prioritize battery technologies and make them the most attractive investment opportunities.

As we look to the future, it is clear that the world’s energy landscape is being reshaped. With the right policies, investments, and innovations, we can ensure that this new landscape is one where clean energy is accessible, affordable, and abundant. In this journey, batteries are not just a technology—they are the key to unlocking a sustainable future for all.