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Add to Preferred SourcesThe International Energy Agency (IEA) has traced the evolution of lithium-ion batteries from post-oil crisis research to one of the defining technologies of the 21st century, according to a commentary published on 7 September 2026. The analysis, authored by Teo Lombardo, Ivo Walinga, Rebecca McKimm, Simon Bennett and Timur Gül, shows that the global lithium-ion battery market is now worth more than USD 150 billion. The technology has become central to the automotive industry, power grids, data centers, drones for defense, and robotics. The commentary draws lessons for countries seeking to build or strengthen their own battery industries. It highlights how public policy, patient capital, and international cooperation shaped today’s landscape.
An international story of innovation
Research into lithium-ion batteries began after the 1973-1974 oil crisis, when oil-importing economies sought relief from soaring crude oil prices. Publicly funded universities and laboratories in the United States, Europe, and Japan laid the scientific foundations and built the first prototypes. Electronics firms in Japan were among the first to recognize the commercial potential, securing a patent for the first pre-commercial prototype in 1986 and launching a commercial product in 1991. Portable electronics producers became the earliest customers, drawn to compact, lightweight, and rechargeable features. Korean producers later pioneered flatter, more flexible designs, helping Samsung overtake Panasonic as the world’s largest lithium-ion battery producer in 2011.
Scaling demand and falling prices
By 2010, global battery demand had increased more than tenfold compared with a decade earlier, and average cell prices had fallen by around 80% over the same period. Nissan prototyped the Prairie Joy in 1996 — the world’s first lithium-ion electric vehicle (EV) — and produced the Altra at commercial scale two years later. Tesla released its Roadster in 2008, followed by the Nissan Leaf in 2010, the first electric car to sell more than 100,000 units. By 2025, global annual battery demand had grown to almost 1,000 times its 2000 level, while average cell prices had fallen by 97%. These shifts were increasingly driven by the growing uptake of EVs.
China’s rise to global leadership
China identified EVs as a strategic industry in the early 2000s, elevating them across four consecutive Five-Year Plans starting with the 12th (2011-2015). Consumer subsidies introduced in 2013 and a purchase tax exemption in 2014 helped EV sales rise from fewer than 20,000 units in 2013 to over 300,000 in 2016. The number of domestic battery manufacturers tripled between 2013 and 2015, peaking at 217 in 2016. Today, China accounts for more than 70% of global electric car production and 85% of lithium-ion battery production, while its EV fleet avoided roughly 1 million barrels per day of oil demand in 2025. The country’s two largest battery producers alone account for more than half of global output.
Lessons for building competitive battery industries
The IEA notes that “competing in today’s lithium-ion battery industry requires both scientific excellence and large-scale, high-precision manufacturing.” Developing a competitive battery industry requires sufficiently large and predictable demand, patient capital, and sustained policy commitment. Global battery-related patents accounted for 40% of all energy patents in 2023, a level never commanded before by any single energy technology. Partnerships with established Japanese and Korean firms remain effective for accelerating battery industrial ecosystems in North America and Europe. The IEA will continue to monitor these trends through its Energy Technology Perspectives report series.