Batteries constitute a relevant component of the global energy system, their impact being especially significant in two key sectors for the energy transition: transportation and energy. In the last decade, lithium batteries have positioned themselves as the dominant technology, both in electric vehicles and in storage actions, being favored by a cost reduction of more than 80% and greater performance derived, largely , of continuous technological advances and economies of scale. In addition, its energy density is higher than that of other types of batteries, such as lead-acid batteries, therefore accumulating a greater amount of energy per unit of volume. China leads the global market for batteries for the use of electric vehicles, if However, its dominance has been diminished in recent years due to the growing support mechanisms and regulatory advances in other economies. In 2023, the Asian country's share of the global battery market was 55%, followed by the European Union and the United States, with a joint contribution of 30%. In the coming years, the demand for batteries is expected to grow with intensity, mainly for the use of electric vehicles and light means of transport, which could place the battery market in a strategic and decisive position worldwide. These can act as a “master key” to unlock industrial transformations and relevant economic benefits. The leadership of the automobile market will increasingly depend on advanced battery technology, and they will also drive the deployment of wind and solar photovoltaic energy systems, being able to attract investments by mitigating their intermittency and stabilizing the network. Batteries will, for Therefore, an essential factor in the transition from fossil fuels, being able to improve efficiency through electrification and greater use of clean energy sources. However, to achieve the climate goals set by countries at COP28, including tripling global renewable energy capacity by 2030 and ensuring security of electricity supply, battery storage capacity would need to be multiplied by six, which requires coordinated efforts by policymakers and industry. The role of governments and regulators will be decisive in this process of developing safe, resilient and sustainable battery supply chains. Clear, well-defined and stable regulatory frameworks must be established, which generate the trust and legal security necessary to attract investments and accelerate the energy transition and move towards a decarbonized economy. Achieving these objectives will depend, to a large extent, on the world's ability to boost batteries quickly and efficiently.Pilar Más, BBVA Research.Follow all the Economy and Business information on Facebook and xor in our weekly newsletter
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