Vehicle Battery Market
Global Industry Analysis (2019 – 2020), Growth Trends and Market Forecast (2021 – 2030)
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Vehicle Battery Market
In the past decade, the automotive industry has witnessed tremendous growth trajectory. Yet, is it at the cusp of minimizing its detrimental impact on the environment. With this motto, the industry is continuously striving to make mobility a sustainable solution. Players thus have been making extensive electronic components integration into the vehicles; a move that has percolated to vehicle batteries. Fairfield Market Research predicts that the global vehicle battery market will achieve a growth rate of 4.64% during the forecast years of 2020 and 2030 as electrification emerges as the next best solution towards reducing environmental impact. The global vehicle battery market revenue is anticipated to reach US$43.48 Bn by 2030.
Defining features such as connected devices, autonomous driving, shared mobility and electrification of powertrains are likely to fuel significant development in the automotive industry. Together, these advancements are not only disrupting the value chain but also influencing the key players in the automotive eco-system. The developments that are unfolding on technological fronts is raising the demand for power required for electronic gadget operations. The increasing electronic content in vehicles is likely to outpace the automotive industry growth rate itself, predicts the research. This is likely to propel the demand for auxiliary power source, preferably, an electric battery system in the near future.
A battery in the vehicle is the auxiliary or secondary power source that powers most of the electronic components. The electric vehicle does not house an IC engine for propulsion rather it sources its propulsion from the integrated battery pack that utilizes the stored chemical energy that gets converted to kinetic energy.
Electric Mobility Makes Noticeable Headways with Electric Powertrain Technologies
Rising demand for electric vehicles, burgeoning electronic content in the new age vehicles and stringent environmental norms against mounting pollution levels are likely to propel the vehicle battery market.
Regulatory frameworks like the Clean Air Act, Euro 6 and BS 6 deployed in compliance with worldwide air pollution norms are expected to transform internal combustion vehicles to electric vehicles. This trend will be further encouraged by increasing consumer preference towards maintenance and emission-free vehicles over the forecast period.
Government initiatives and supportive schemes towards promoting electric vehicles coupled with headways in fuel-saving technologies driven by battery supportive system are expected to provide the necessary thrust for market growth. Efforts towards better electric vehicle charging infrastructure are also building market and consumer confidence.
Rapidly evolving lithium-ion and similar battery technologies are likely to be one of the mainstream technologies in the near future.
Key players have been seeking the development of fast-charging batteries in an attempt to enhance market growth with heightened consumer sentiments. As a result, the rising demand for fast-charging stations can aid individuals to embark on a longer travel durations without worrying about the battery being discharged.
Demand for EVs across Europe to Give Vehicle Batteries Market Shot in the Arm
The major challenge with the vehicle batteries continues to be the cost and the inherent safety risk. This has restricted application of vehicle batteries to a noticeable extent. With rising economies of scale, as demand for EVs soars, the advancements in the battery’s chemical compositions are expected to see better safety, performance and life span. This is also likely to give OEMs a chance to reduce battery costs, making them an affordable option in due time.
China, as one of the major hubs for battery manufacturers, has been witnessing the heat of the nationwide lockdown due to the pandemic. The Chinese government have been taking necessary measures to weather the COVID-19 storm and revive the battery manufacturing business smoothly. However, interrupted supply chains have led to severe business losses for the automakers and battery manufacturers. The loss is also because of plummeting automobile sales that shall revive only post normalization of the pandemic, as consumer sentiments too strengthen.
COVID-19 caused insurmountable disruption in production and supply chain. The pandemic has been catastrophic, causing severe impact worldwide and significantly affecting the capital and R&D investments.
On the flip side, despite lockdowns and production being shut globally, the demand for electric vehicles continued its momentum in the European and few other regions. This in turn has bolstered the demand for vehicle battery market growth.
Lithium-ion Batteries Spearhead Vehicle Battery Market
In the last decade, automakers have heavily invested in research and development of cutting-edge technology to boost use of electronics in vehicles. To suffice the energy demand of the integrated electronics in vehicles, meeting adequate auxiliary power requirement without affecting the performance of the vehicle has been an evident challenge.
Some of the noticeable battery technologies in the automotive industry are, lithium titanate (LTO), lithium-manganese spinel (LMO), lithium-nickel-cobalt-aluminium (NCA), lithium-nickel-manganese-cobalt (NMC) and lithium-iron phosphate (LFP). Out of these, the prevailing battery in the consumer application is lithium cobalt oxide (LCO). However, LCO is mostly less apt for automotive applications owing to the safety risks. Hence, lithium-ion turn out to be a better choice compared to other battery technologies.
Integration of the hybrid and electric drivetrains are likely to bring about the incorporation of efficient electric vehicle batteries in the near future. The lithium-ion battery is likely to witness substantial demand in the near future and is poised to surge at a CAGR of nearly 15% to reach US$28.3 Bn by 2030. These batteries are expected to guarantee longer life span, better energy density and safety.
Asia Pacific Paces Ahead as China Retains Dominance Over Manufacturing of Vehicle Batteries
Asian countries comprising of the emerging nations such as Japan, China and Korea are spearheading the market, wherein the vehicle battery market is anticipated to substantially augment over the coming couple of years. More than 80% of the demand was from these countries in 2018, while European countries showed lesser vehicle batteries demand.
Of the total vehicle battery factories, over 45% are based in China. European region unlike China does not have a reasonable policy framework that could attract battery manufactures. As a result, the numerous challenges faced by most of the industry incumbents coupled with difficulties in executing planned investments have steered away some of the battery manufacturers off the shore towards China.
The competitive rivalry in the vehicle battery market is likely to get stiff in the coming years technology evolves. Tech-giants are joining hands with other companies, universities and researchers to innovate high-density vehicle batteries. Hence, large battery manufacturers are directing their investments towards innovations in vehicle battery to amplify storage capacity and its commercialization in ICE and electric vehicles.
Owing to which, the key players are relying on different strategies such as business expansion preferably through organic and inorganic growth and new product development. Businesses are adopting strategies such as higher R&D investments and joint ventures with the intent to grab market share. For the same, manufacturers are likely to embrace strategic partnerships that shall enable them to acquire technical expertise and geographic expansion.
BYD Company Limited, Panasonic Corporation, Johnson Controls International PLC, SAMSUNG SDI Co., Ltd, Contemporary Amperex Technology Co., Limited, LG Chem Ltd., A123 Systems Inc. are some of the major manufacturers among others that are steering the vehicle battery market.