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With 2024 drawing to close, thoughts move to the future and what 2025 may hold in the EV and battery industry. Here are some key themes to watch for 2025 in the EV, battery, charging, ESS, recycling and motor & systems sectors.
EV & Battery
After a year of up and downs, strong growth has been seen overall in the EV & battery markets, this trend is expected to continue however the dynamics of this growth will change. The EU’s emissions legislation comes into force in 2025 leaving many automakers the possibility of facing fines into the billions. There have been calls for the standards to be eased or delayed, however, it remains to be seen how the bloc will react. That considered, EV sales are expected to grow across Europe after a stagnant year.
In North America, the region has seen consistent growth throughout 2024, but the start of 2025 coincides with Trump’s inauguration as president. With this, two key polices are expected to be reversed or cancelled. The EPA’s emission standards and the USD7,500 tax credit both of which are viewed as essential drivers to EV adoption in the US. Most of the OEMs based in the US have been preparing for the EPA’s emission standards and therefore are looking to sell more EVs. However, with these changes in the legislation OEMs’ approach to electrification could be altered.
China has had another record year of EV sales and next year is expected to be no different. LFP cathode market share rose sharply throughout the year in EVs. The role of LFP in the China market will continue to evolve alongside developments such as manganese doping and will be closely monitored in our monthly EV and battery database.
READ: The evolution of the US Battery Belt, what does the future hold?
Charging
The charging market has begun showing signs of consolidation with players either exiting the market or acquisitions. The roll out of slower AC charging systems has slowed throughout 2024 with charging players opting towards the roll out of fast DC charging systems and megawatt charging systems. This trend is expected to continue into 2025.
Further to this, BESS has begun to be used in conjunction with charging systems to act as buffers to the grid and improve the charger usage. Throughout 2025 we expect further roll out of BESS with charging systems.
WATCH: EV Charging Quarterly Outlook Q4 2024 Highlights Presentation
ESS
Everything is getting larger in BESS: capacity, duration and number of projects have all been on the rise in 2024, and 2025 will be no different. Large format cells (314Ah) and the higher energy density systems associated with them (5MWh+) are set to dominate in 2025, having already taken hold in the Chinese market. Impressive declines in cell and system cost in 2024 look likely to slow in the Chinese market in 2025, however greater declines in system price for ex China markets remains possible.
China and the US will continue to dominate the storage market. China’s significant pipeline for 2025 comes at the end of the country’s current Five-year plan ending, we’ll be closely watching the policy for the next Five-year plan and how that will shape the storage market in the second half of this decade. The full impact of the new administration on the US storage market remains unclear, however with 2025 projects already far into their development we foresee limited near-term impact.
New markets with nascent storage deployments are garnering developer interest amid potentially high operating revenues, and low upfront CAPEX, the Middle East and India are key markets to watch in 2025.
WATCH: BESS Quarterly Outlook Q4 2024 Highlights Presentation
Recycling
The battery recycling industry has had a challenging year as there has been intense competition for feedstock and revenues have remained limited. Available feedstock is forecasted to increase next year with more end of life (EoL) batteries and production scrap available, however with capacity expansions, feedstock acquisition will remain competitive. Subsequently, firms may struggle to sustain operations in this competitive environment.
Legislation changes are also set to come in for both the EU and China, with the EU restricting black mass exports, while China aims to lift a ban on black mass imports. The impact of these changes are expected to be limited.
Additionally, with Trump’s presidency, the US’ EoL scrap pool in the long term is expected be reduced, possibly negatively impacting investment into the US recycling industry in the near term.
READ: The realities of the battery recycling market, four key challenges Chinese recyclers are facing
Motors and systems
The dominance of permanent magnet synchronous motors (PMSM) in the EV industry is expected to persist in 2025. Players are looking to improve PMSM efficiency through the use of soft magnetic alloys.
More broadly system designs are continually evolving. Automakers are increasingly embracing higher levels of integration, with three-in-one systems becoming mainstream and some manufacturers introducing up to 12-in-one integrated powertrains. Additionally, technologies are trending towards higher rotor speed, with a growing number of OEMs pushing the 20,000-rpm envelope.
WATCH: EV Motors & Systems Quarterly Outlook Q3 2024 Highlights Presentation
More information
Keep an eye out for Rho Motion’s ‘What to watch in 2025’ briefing and webinar that will delve into these markets in more detail in January.
If you have any questions get in touch.