Battery adoption is rising and cannot be held back, says the energy transition think tank RMI, in a new post that illustrates how that momentum will cut global fossil fuel demand by half.
“Battery demand is growing exponentially, driven by a domino effect of adoption that cascades from country to country and from sector to sector,” say RMI analysts Daan Walter, Sam Butler-Sloss, and Kingsmill Bond, who recently co-authored a report with three other researchers about how the rise of batteries will speed up a global fossil fuel phaseout.
“At the core of the success of batteries lies a reinforcing feedback loop between market scale, cost, and quality,” states the report, which lays out the current state of play in six graphs. “As the battery market grows, unit cost keeps falling and quality keeps rising.”
Battery Sales Grow Exponentially
RMI’s graph of battery sales for the 30 years between 1992 and 2022 shows a classic S-curve, which usually “characterizes the growth of disruptive new technologies.” RMI explains in a previous report that the phenomenon results from “system feedbacks such as learning curves, economies of scale, technological reinforcement, and social diffusion” that lead to sales rates doubling every two to three years. In past years, that growth has increased further—from an average rate of 33% to nearer 40%.
While S-curves are named for their shape, where a shallow incline gives way to exponential growth before shallowing again into a plateau, the trendline for batteries has not yet reached begun to level off and shows only half an ‘S,’ with sales still rising, the RMI team says.
Costs Down, Quality Up
In a second graph for the years from 1991 to 2023, data on battery costs versus energy density fall into an ‘x’ pattern over time. The lines intersect at a point in the late 1990s—with cost falling by 99% and density rising five-fold—indicating that the value of battery energy density per dollar has risen dramatically in the last few decades.
“For every doubling of deployment, battery costs have fallen by 19%,” the analysts write. “Couple these cost declines with density gains of 7% for every deployment doubling, and batteries are the fastest-improving clean energy technology.”
A ‘Battery Domino Effect’
The next graph plots shows how new markets for battery technology open up as costs fall and energy densities improve. “We call this the battery domino effect: the act of one market going battery-electric brings the scale and technological improvements to tip the next,” the authors write. “Battery technology first tipped in consumer electronics, then two- and three-wheelers and cars. Now trucks and battery storage are set to follow. By 2030, batteries will likely be taking market share in shipping and aviation, too.”
RMI’s graph of the different target markets, complete with rightward arrows, gives the appearance of…falling dominoes.
Incumbent Modelers Are Behind the Curve
RMI’s fourth graph compares actual automotive demand for lithium-ion batteries from 2017 to 2030 against past projections by the International Energy Agency (IEA). With hindsight, the graph shows that the IEA’s forecasts—all of them based on linear adoption rates for batteries—increasingly and repeatedly fell short of the reality.
“The caution of such linear thinking may, on the surface, seem reasonable,” the RMI researchers write. “But in reality, it is simply wrong.”
Drivers of Change Are Accelerating
RMI lines up three graphs that show a reinforcing feedback loop between battery quality, cost, and market size. As battery quality rises, costs fall, and market size increases, leading to projections past 2023 for both “fast” and “faster” adoption scenarios.
The authors say they “do not see a scenario of slow adoption as credible; instead, we model two futures: fast or faster. Reality is likely to lie somewhere between the two.”
Enabling the Fossil Fuel Phaseout
The final graph shows how a domino effect in battery adoption can drive the shift away from fossil fuels. By 2050, increased use of batteries “puts over half of today’s fossil demand at risk,” and “propels us 60% of the way to a zero-carbon energy system.”
Those results show that “the best strategy to rapidly phase out fossil fuels is to accelerate the deployment of technologies that reduce fossil fuel demand,” write Walter, Butler-Sloss, and Bond.
