Case Study: EV Battery Market Sizing Case Study: Sizing a 1.2 TWh Opportunity

An EV battery market sizing case study is really two questions wearing one coat: how many gigawatt-hours will the market absorb, and how much of that demand can a given technology actually reach once China’s cell makers, a collapsing price curve and a chemistry split are priced in. This representative engagement shows how PerspireIP sized the opportunity for a specialty-materials company weighing a capacity expansion behind a next-generation cathode patent family, building a bottom-up TAM/SAM/SOM from public IEA, SNE Research and BloombergNEF data, then cross-checking the demand story against the one dataset a spreadsheet of unit forecasts always misses — the rate at which the industry is actually patenting.

The Challenge

A specialty-materials company came to us ahead of a board decision that turned on a single range: how big is the market its next-generation cathode chemistry could actually serve by 2030, and is it big enough to justify a nine-figure capacity expansion. The company held a defensible patent family around a high-nickel cathode formulation and had a pilot line running, but its internal model had been built by stacking third-party “EV market to reach \$X trillion” headlines on top of each other.

Those numbers were not wrong so much as unusable. They conflated vehicle sales value with battery value, ignored the chemistry split that decides whether a nickel-rich cathode is even in the running, and treated a market that two Chinese suppliers already more than half control as if it were open to anyone with a better cell. A capacity decision cannot be made on a market figure that answers a different question than the one the business is asking.

The board needed three things the headline numbers could not give them: a total addressable market expressed in the unit the business actually sells into (gigawatt-hours of cells, then tonnes of cathode material), a serviceable market that honestly subtracted the demand already locked up by incumbent chemistries and vertically integrated cell makers, and some independent signal that the underlying technology demand was real and growing rather than a bubble. Get the TAM too high and the expansion is a stranded asset; get the serviceable slice wrong and a technically superior material never finds a buyer.

Our Approach

We built the sizing bottom-up, in gigawatt-hours, and only converted to dollars at the end — the opposite of the top-down dollar figures the company had started with. The spine of the model was the International Energy Agency’s demand data: EV battery demand passed 950 GWh in 2024, a 25% rise on 2023, and total battery demand across EVs and stationary storage crossed the 1 TWh milestone that year. SNE Research’s installation data then gave us the 2025 actual — 1,187 GWh of EV batteries deployed, up 31.7% — which we used to calibrate the near-term curve rather than trusting any single forecaster’s slope.

From that top-line we segmented three ways. By chemistry, because the client’s nickel-rich material competes only in the nickel-manganese-cobalt (NMC) segment, and the fastest-growing part of the market is lithium iron phosphate (LFP) — the shift BloombergNEF credits for much of the price decline. By geography, because China both consumes and supplies most of the world’s cells. By end-use, separating passenger cars (over 85% of EV battery demand) from the electric-truck segment that grew more than 75% in 2024 off a small base. Each segment carried its own growth rate and its own source-cited assumption in a log the board could audit line by line.

Only then did we convert gigawatt-hours to dollars, using the BloombergNEF pack-price series — $115/kWh in 2024, $108/kWh in 2025 — and, critically, projecting that price down across the forecast. A market sizing that holds today’s price flat across a decade overstates revenue in exactly the years that matter most. Finally, we ran the demand story past a patent-filing cross-check, treating the rate of battery innovation as an independent proxy for where real technical and commercial demand is heading.

What the Research Found

The headline TAM survived scrutiny: a market deploying 1,187 GWh in 2025 and growing above 30% a year is unambiguously large, and at roughly $108/kWh the 2025 cell market alone runs into the low hundreds of billions of dollars before the material layer is even isolated. But the serviceable market was far smaller than the client’s original model implied, for two reasons the segmentation made unavoidable.

First, concentration. SNE Research’s 2025 data showed CATL alone installing 464.7 GWh for a 39.2% share, with BYD at 16.4% — the two together at 55.6% of the entire market, and every other maker in single digits (LG Energy Solution, the largest non-Chinese supplier, at 9.2%). A new cathode material has to be designed into a cell maker’s platform; more than half the market belongs to two vertically integrated players with their own material strategies.

Second, chemistry. LFP’s rise means a growing share of demand sits in a segment a high-nickel cathode does not address at all. Netting both effects out moved the realistically serviceable market to a fraction of the gross TAM — still a real opportunity, but one that had to be won design-win by design-win rather than assumed. The discipline here matters: a serviceable-market figure that quietly includes demand a technology cannot physically reach is the single most common way a market sizing misleads the people relying on it.

The patent cross-check is where the sizing gained its credibility. The joint EPO/IEA study found more than 7,000 international patent families in electricity storage published in 2018, after growing at 14% a year from 2005 — four times the 3.5% rate across all technology fields — and the IEA has since reported that batteries accounted for 40% of all energy patenting in 2023. That is not the filing profile of a mature, slowing market; it is sustained, accelerating innovation demand, which supported the client’s growth assumptions rather than contradicting them. The same data carried a warning, though: the top 25 applicants account for 47% of all battery patent families since 2000, so the client would be expanding into a field where a handful of incumbents already hold the surrounding art.

The Outcome

The board got a TAM/SAM/SOM it could defend to investors line by line, in gigawatt-hours and tonnes of cathode material rather than borrowed trillion-dollar headlines. The gross market was confirmed as large and fast-growing; the serviceable market was reset downward to reflect a two-supplier-dominated, chemistry-split reality; and the obtainable share was framed honestly as a design-win problem, not a demand problem. The patent cross-check turned the growth assumptions from an assertion into something anchored to an independent, sustained signal — and simultaneously flagged the crowded prior-art landscape as the next diligence item before any capital went out the door.

The practical result was a more conservative, more fundable case: a smaller but real serviceable market, a price curve that bent downward with the evidence, and a clear recommendation to pair the capacity decision with a freedom-to-operate review of the dense cathode patent thicket. A right-sized market that closes is worth more than an inflated one that frightens the diligence team.

What This Means for Similar Matters

• Size in the unit you sell, not the unit the headlines use. Vehicle-sales value and battery-cell value are different markets; a cathode supplier lives in gigawatt-hours and tonnes, so the model has to as well.
• Project the price curve down. Lithium-ion pack prices fell to $115/kWh in 2024 and $108/kWh in 2025; holding price flat across a forecast quietly inflates every out-year of revenue.
• Subtract concentration before you celebrate the TAM. When two suppliers hold 55.6% of a market, the serviceable slice for a new entrant is a design-win contest, not a share-of-TAM calculation.
• Use patent-filing trends as an independent demand proxy. A 14%-a-year filing growth rate corroborated the forecast; the 47% top-25 concentration flagged the prior-art risk that a pure market model would have missed.

Why Patent-Filing Trends Belong in a Market Sizing Model

Most market sizing stops at unit forecasts and price curves. For a technology business, that leaves out the most forward-looking dataset available: how fast the field is patenting. Filing activity leads commercialisation by years, so a rising patent-family count is early evidence that demand is real and that capital is flowing into the technology. In batteries the signal is unusually strong — the EPO/IEA study put electricity-storage filings at four times the all-field growth rate, and lithium-ion alone accounted for 45% of battery-cell patenting in 2018. Reading that curve alongside the GWh forecast is how a market sizing distinguishes a durable opportunity from a hype cycle, and how it surfaces the prior-art concentration that will shape any later freedom-to-operate work. This is the discipline behind our market sizing and opportunity analysis and our EV and battery technology research.

From Gigawatt-Hours to a Defensible TAM, SAM and SOM

The reason this engagement started in gigawatt-hours rather than dollars is that the sequence determines whether the final number can survive diligence. A top-down model starts with a huge dollar figure and shaves it with assumption after assumption until it reaches something the board likes; by the end, no one can trace which assumption did the work. A bottom-up model does the opposite. It begins with a physical quantity the industry actually reports — gigawatt-hours deployed — and builds upward, attaching one cited source and one growth rate to each segment so every layer is auditable.

The total addressable market was the full battery-cell demand the IEA and SNE Research data describe: 1,187 GWh in 2025, growing above 30% a year, converted to dollars with a declining BloombergNEF price series rather than a frozen one. The serviceable available market stripped that down to the NMC segment the client’s chemistry competes in, after removing LFP demand and the share locked inside vertically integrated cell makers. The serviceable obtainable market — the number the capacity decision actually rested on — was then modelled as a realistic set of design wins over the forecast period, not a flat percentage of the TAM. Framed that way, the smaller SOM was not a disappointment; it was the first version of the number a sophisticated investor would believe.

That is the through-line of every market sizing we deliver: anchor to a physical unit, segment honestly, project the price curve with the evidence, and cross-check demand against the independent signal of patent filings. The output is not the biggest number available — it is the one that still stands up after the expansion is funded and the diligence team starts pulling it apart.

Data Sources

The market and patent data referenced above comes from:

• IEA — Global EV Outlook 2025: Electric vehicle batteries — EV battery demand passed 950 GWh in 2024 (up 25% on 2023); total battery demand across EVs and storage reached the 1 TWh milestone; electric cars account for over 85% of EV battery demand.
• SNE Research / CnEVPost — Global EV battery market share 2025 — Global EV battery usage reached 1,187 GWh in 2025 (+31.7%); CATL 464.7 GWh (39.2%), BYD 16.4%, LG Energy Solution 108.8 GWh (9.2%); CATL and BYD combined 55.6%.
• BloombergNEF — Lithium-Ion Battery Price Survey — Volume-weighted average lithium-ion pack price fell to $115/kWh in 2024 (the biggest drop since 2017) and to $108/kWh in 2025, driven by overcapacity and the shift to LFP.
• EPO & IEA — Innovation in batteries and electricity storage — More than 7,000 international patent families in electricity storage published in 2018 after 14%/yr growth from 2005 (vs 3.5% across all fields); the top 25 applicants account for 47% of battery patent families since 2000.

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