Automotive Battery Thermal Management System Market

Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2026)

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Automotive BTMS Gains Solid Traction Owing to its Critical Functional Role in EVs

There has been rapid increase in the adoption of electric vehicles (EVs) over the past decade. Batteries of EVs are designed to work efficiently but the operating performance of batteries might face some limitations such as efficiency, lifespan, and cost. Automotive battery thermal management system (BTMS) thus plays an important role in EVs. These systems manage batteries in multiple ways such as protecting the battery from external environmental factors and controlling the thermal nature of these batteries.

Attributing to their critical function in EVs, automotive battery thermal management systems are pegged to witness robust demand over the course of near future. Up from the market size of US$666 Mn recorded in 2020, global sales of automotive battery thermal management systems will excel at an impressive CAGR of nearly 36% over the forecast period (2021 – 2026). Soaring demand for high-performance, fuel-efficient vehicles in line with favourable government initiatives such as the California Zero Emission Vehicle Program (ZEV) aims at achieving 1.5 million ZEV cars by the year 2025 will favour the growth of market.

Governments Accelerate Automotive Battery Thermal Management System Sales with Pro-EV Regulatory Frameworks

Governments of various countries have adopted rigorous strategies to increase EV adoption. For instance, in the year 2013, the Chinese government first started to provide a subsidy ranging from RMB 4,000 to RMB 35,000 for every plug-in hybrid electric vehicle (PHEV) purchased and a subsidy ranging from RMB 35,000 to RMB 60,000 for every battery electric vehicle (BEV) on the basis of every vehicle’s driving range. The subsidies decreased by 5% in the year 2014 and by 10% in the year 2015. Such subsidies and supportive regulations in several other countries continue to encourage EV sales, thereby proliferate demand for automotive battery thermal management system.

Design Complications Dampen Demand for Automotive Battery Thermal Management Systems

The thermal components face issues such as verifying thermal designs of components, designing the optimal flow channels, lower power requirements, and reducing the overall vehicle weight and cost. Even an increase in temperature caused by high power is hazardous for it and may lead to short circuits or fires. Such complexities in fundamental designing of automotive battery thermal management systems continue to act as longstanding barriers to rapid market growth.

Phase-out of ICE Vehicles Creates Opportunity for Automotive Thermal Battery Management Market Players

Nearly 13 countries in the world, including Norway, the UK, Canada, and the Netherlands, have officially declared a phase-out for conventional internal combustion engine (ICE) vehicles to come in effect within the next few years. California will be the first from the US to ban new ICE vehicle sales soon. Such strong developments are creating a lucrative revenue generation opportunity for multiple stakeholders in the electric vehicle space such as EV makers, OEMs, battery and battery technology companies, and automotive BTMS manufacturers.

Asia Pacific Leads Primarily on Back of Favourable Government Initiatives

Asia Pacific houses the largest market for automotive thermal battery management systems that accounted for more than 60% of the global market revenue in 2020. Some of the fast- developing economies, including China, Japan, India, and South Korea have become major hubs for automobile production companies. An increase in the demand for EVs in the Asia Pacific region over the recent past plays a positive role in determining the market share for automotive battery thermal management system.

For instance, Japanese companies such as Mitsubishi and Chinese companies such as BAIC Motor Corp. have been investing huge amount of money in EVs. Asia Pacific is followed by North America and Europe owing to exponentially increasing demand for alternative fuel vehicles, which ultimately forms a fertile ground for the progress of automotive thermal battery management system market.

Passenger Vehicles Will Continue to Register Maximum Uptake

Owing to an unprecedentedly expanding market for EVs and alternative fuel vehicles, such as hydrogen vehicles, bio-diesel vehicles, and propane vehicles, passenger vehicles continue to represent the largest segment accounting for sales of automotive battery thermal management systems. Passenger vehicle manufacturers are particularly expected to enjoy flourishing sales in the immediate future as people are showing greater preference for private conveyance over public transport. Even those who currently do not own a car are also considering new purchase. Given this scenario, there are strong indications that EVs will gain preference among new buyers rather than conventional fuel vehicles. This, in turn, will mark another selling opportunity for automotive BTMS companies.

Contracts and Partnerships Drive Competition in Automotive BTMS Market

The market is dominated by companies such as MAHLE GmbH, VOSS Automotive GmbH, Dana Limited, Continental AG, LG Chem, Robert Bosch GmbH. These companies have increased their market shares by adopting various strategies, which include contracts, agreements, and establishment of new production plants. In October 2015, LG Chem and Tesla Motors signed a contract for upgrading Roadster, the company car, with battery improvement and replacement. With the help of this contract, the former experienced boosted demand.

In November 2015, Gentherm Incorporated expanded its production by opening a new manufacturing plant in Mexico, wherein the production of seat comfort and industrial products was the focal area of the company. Similarly, in December 2015, LG Chem supplied EV batteries which powered Chevrolet Bolt. Thus, the companies entered a partnership to supply Chevrolet to supply products such as DX cool plate for the Bolt.

Other prominent players steering the market for automotive battery thermal management include BYD Company Ltd, Contemporary Amperex Technology Co., Limited (CATL), Valeo, Continental AG, Calsonic Kansei Corporation, Gentherm Incorporated, Samsung SDI Co., LTD., Hanon Systems, and Grayson Thermal Systems.

The market faced a heavy setback due to the global COVID-19 pandemic that led to a temporary yet sharp sales decline in electric vehicles. With the industry recovering, the market for thermal battery management systems will also pick up its pace in the near future.

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