Automotive Battery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Automotive Battery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Automotive Battery Market was valued at USD 43 billion in 2020, and it is expected to reach USD 59 billion by 2026, registering a CAGR of 5.5% during the forecast period (2021 - 2026).

The impact of COVID-19 is inevitable on any industry as there were continuous lockdowns and halt of manufacturing units across the world. The COVID-19 pandemic has slowed battery supply chains as most battery cells are manufactured in China, thereby highlighting the dependence on China and the associated risks. This has spurred interest among various stakeholders for localization/regionalization of supply chains in the US and EU regions, paving the way for new opportunities in the market.

The global automotive battery market is anticipated to witness steady growth during the forecast period due to the increasing preference of end users for zero-emission hybrid and electric vehicles, owing to the falling battery price, reducing crude oil reserves, and environmental effects of conventional automobiles. In accumulation to this, an increase in the global battery production capacity has helped achieve economies of scale in the automotive battery industry, which is another major driver for market growth.

The highest growth rate is observed in Asia-Pacific, and the region is expected to grow further in the coming years. China, on the other hand, ranks as the fastest-growing automotive battery market, owing to the high demand for commercial and passenger vehicles. In addition, the new trend of vehicles with the latest features would be largely observed in North America and Europe, along with the United States and China. Increasing demands from other Asian countries such as India, Malaysia, Thailand, and the Philippines further impact the global market growth in a positively.

Key Market TrendsThe Lithium-Ion Battery Segment Expected To Have Significant Growth

The market for lithium-ion batteries is anticipated to observe the fastest growth during the forecast period. A lithium-ion battery is equipped for applications, which demand high-energy density solutions such as hybrid and electric automobiles. Additionally, in an effort to increase vehicle economies, manufacturers are continuously focusing on reducing the price of the battery, propelling the market growth, globally.

Compared to the traditional battery technology, lithium-ion batteries charge faster, last longer, and they have a higher power density for more battery life in a lighter package. The automotive lithium-ion battery has emerged as an eco-friendly, rechargeable power source compared to conventional batteries such as lead-acid and nickel-metal hydride batteries.

With the implementation of stringent fuel efficiency norms in countries such as the United States, India, Germany, and Japan, manufacturers are trying to reduce the cost of lithium-ion batteries, in turn increasing the demand for electric vehicles. For instance, in September 2019, Maruti Suzuki partnered with Toshiba and Denso to set up the world’s largest automotive lithium-ion battery manufacturing unit in Gujrat (India).

Numerous governments are providing incentives/ tax credits to promote the use of electric vehicles, which is expected to increase the demand for automotive lithium-ion batteries. For instance, the IRS (Internal Revenue Service) tax credit is USD 2,500-7,500 per new electric vehicle purchased for use in the United States. Similarly, California provides USD 2,500 rebates, Delaware provides USD 1,000 rebates, and Colorado provides USD 5,000 tax credits on the purchase of electric vehicles.

The Asia-Pacific Region to Dominate the Automotive Battery Market

The Asia-Pacific region is expected to have the fastest growth in the automotive battery market value, owing to the increasing demand for such vehicles and high sales of passenger cars, commercial cars, and motorcycles. However, North America dominates the automotive battery market outlook as all the string lead-acid battery manufacturers are in the region, leading to the increasing demand for electric vehicles. The area also has strict norms toward using eco-friendly products, ensuring the automotive battery market share's sharp rise.

Growing product demand in automotive applications in various countries, including South Korea, India, Malaysia, and Indonesia, is likely to influence the region's growth during the forecast period positively. Furthermore, ongoing product developments by various companies to manufacture cost-efficient and high-performance vehicles are projected to contribute to the regional market's growth. In addition, government initiatives to provide subsidies based on the price difference between EVs and Internal Combustion Engine (ICE)-enabled vehicles, with a maximum limit of CNY 85,000, are also providing a fillip to the market in the Asia-Pacific region.

Apart from the aforementioned factors, various electric vehicle manufacturers have been signing contracts or deals with Asia's vehicle battery manufacturers, augmenting the demand for automotive batteries in the region. For instance, BMW and Volkswagen signed contracts to buy batteries from CATL, and Korean producers, LG Chem and Samsung SDI.

Competitive Landscape

The Automotive Battery Market is highly competitive, owing to the presence of numerous manufacturers. The market is dependent on raw material suppliers and manufacturers. Mergers and acquisitions and joint ventures are among the key strategies adopted by market players in an attempt to consolidate their market presence. For Instance,

• Exide Technologies operates in China through its joint venture with Shenyang Dongbei Storage Battery Co. This helps in the mass production of automotive batteries in the market.
• Panasonic and Toyota announced their plan to produce batteries for electric vehicles jointly. Panasonic announced that the mass production of batteries for electric vehicles began in the Gigafactory set up by the collaboration of Panasonic and Tesla in Nevada.

Some other key players operating in the market include A123 Systems LLC, LG Chem, BYD Co. Ltd, East Penn Manufacturing Company, Robert Bosch GmBH, EnerSys, Exide Technologies, and GS Yuasa Corporation.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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