Stunning growth of battery storage puts it at centre of global energy security needs, for cars and for grids

The stunning growth of battery storage technologies is expected to accelerate even further in coming years as the world looks to renewables and storage to boost energy security for both their car fleets and their electricity grids.

According to Benchmark Market Intelligence global lithium ion battery demand increased by 29 per cent in 2025 to reach 1.59 TWh, with grid scale batteries being the big mover with a growth of 50 per cent to 300 gigawatt hours, with 2026 expected to show even stronger growth to around 500 gigawatt hours.

Iola Hughes says the demand for lithium ion batteries – for both electric vehicles that currently dominate the market – and for grid scale battery installations will be heightened by the war in the Middle East and the renewed focus on energy security.

“The EV market is still growing very quickly …. and it’s really impressive to how quickly energy storage is becoming a driving factor of lithium demand, and in 2026 we’re expecting that story to continue,” Hughes says in the latest episode of Renew Economy’s weekly Energy Insiders podcast.

By 2030, Hughes says lithium ion battery demand could surge to around 3.5 terawatt hours across the EV, energy storage and other battery demand applications, with global production likely to reach 4 terawatt hours, nearly double the current production rates.

She says the Iran war is already having an impact on the grid scale storage market, particularly in the Asia region which has been so dependent on fossil fuel imports for its energy supplies.

“These are countries which are being very heavily reliant on imports from the Middle East, and ultimately, it kind of brings to the forefront the topic of energy security, and renewables and storage are seen as a key pillar of that.”

And Hughes points to the surge in solar installations in Pakistan in the last energy crisis in 2022, and for residential storage in Germany after the invasion of Ukraine. “I think there’s a strong argument for residential storage to see an uptick because of this (the Iran war).”

Battery storage, because of its falling costs, has been the most successful technology in terms of grid-scale installations in the last few years, and the success of the federal government’s home battery rebate has seen a huge surge in installations.

As Tristan Edis, from Green Energy Markets report, the installation of home batteries in Australia in the month of March accounts for around 10 per cent of global grid scale battery installations, an extraordinary number.

See: Australian home battery installations equal to almost 10 pct of global utility capacity brought online in March

EV sales are also on the rise in Australia, thanks to the surge in petrol and diesel prices caused by the impacts of the Iran war. It seems many people who had considered EVs and were thinking of buying have simply made snap decisions to do it now, to avoid the crushing impact of high petrol and diesel bills.

But the impact in Australia is dwarfed by what is happening elsewhere. New Zealand has been the standout, with year-on-year EV sales surging by 263% per cent, largely as a result of surging prices at the fuel bowser.

BMI says that in France, rising petrol prices, despite price caps from suppliers such as French oil giant TotalEnergies, has triggered ‘panic buying’ and supply disruptions at the pump. This helped drive BEV sales up 69% year-on-year, significantly outpacing the already strong 36% growth seen in January and February

Even in Norway, which has the highest penetration of EV sales in the world, demand also surged in March. Norway consistently has EV sales shares of 98 per cent, but 70 per cent of its stock remains in petrol and diesel cars, but it seems some owners were triggered to make the swap in March because of rising fuel prices.

“It was interesting to see how quickly the (Iran war) had an impact,” Hughes told Energy Insiders. “Norway is a market where your only choice really is to buy an EV, but you have people who’ve been holding on to their petrol cars and suddenly they go ‘OK, well I guess it’s the time now and we’ll switch over’, which is fascinating.”

Back to battery technologies, Hughes notices some developments in solid state batteries, semi-solid state batteries, sodium ion batteries and flow batteries. But Hughes says these technologies are still struggling on cost, and space.

Despite the recent rising cost of lithium, it is still “very cheap” to install battery storage. And the economic have been improved by gains in efficiency, which means that container units can now hold twice the capacity that they did just a few years ago.

“If you are building a gigawatt hour project and each 20 foot container is now seven megawatt hours compared to the containers of a few years ago that were three or four megawatt hours, suddenly you need a lot less containers, a lot less land, a lot less cabling.”

You can listen to the full interview with BMI’s Iola Hughes in the latest episode of the Energy Insiders podcast, and by clicking here: Energy Insiders Podcast: Batteries take centre stage as world wrestles with fuel crisis

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