Automotive battery market worth more than $95 billion by 2025
The global automotive battery market size is expected to reach $95.57 billion by 2025, registering a CAGR of 7.9% during the forecast period. According to a new report by Grand View Research, large-scale availability of batteries in various sizes and specifications along with high current level are expected to drive the market over the forecast period. Lead acid batteries are relatively cheaper compared to other batteries and can be manufactured with relatively lower technology equipment, which in turn is projected to keep their demand high through 2025.
Sodium (Na)-ion batteries are the direct replacement of lithium (Li)-ion batteries, raw materials of which are costlier than the former. Moreover, Na-ion batteries are available in abundance. Compared to Li-ion batteries, they are a potentially safer and cheaper alternative. However, these batteries are still in the development stage and are not available for practical use. In 2015, researchers developed a prototype of sodium-ion batteries in the industry standard of 18650 cylindrical formats.
Consensus to reduce the carbon footprint is leading to a shift toward electric vehicles (EVs). Increasing fuel prices along with growing environmental concerns in developed countries are resulting in rising interest of individuals in electric vehicles. Several favorable regulatory initiatives are further supporting the sales of electric vehicles, which are estimated to augment the market.
Development of electric vehicles is also poised to be driven by an agreement promoted by the U.S., European Union, and Japan. The regions co-operate on the convergence of regulatory obligations to control cost pertaining to electric vehicles worldwide. Because electric cars represent a small share of the overall automobile sales, the agreement plays a crucial role in economic recovery and price-sensitivity of the industry.
Growing sales of vehicles and favorable government initiatives in developing economies such as India, China, Vietnam, and Mexico are likely to provide a boost to the automotive battery market over the forecast period. For instance, in 2013, the Indian government set up the National Electric Mobility Mission Plan (NEMMP) 2020 to incorporate various issues pertaining to vehicular pollution and national energy security. Penetration of electric vehicles in the India market is considerably low due to high cost of vehicles, low consumer disposable income, and absence of requisite infrastructure in the region. However, advent of low-cost EVs, such as the Mahindra e2o and Mahindra eVerito, is projected to bolster the adoption in coming years and provide substantial growth opportunities for the automotive battery market.
Further key findings from the report suggest:
- Although lead acid batteries are the most commonly used type, the lithium-ion battery segment is expected to post the highest CAGR during the forecast period.
- Sodium-ion batteries are anticipated to gain significant popularity after their commercialization, due to abundant availability of raw materials.
- In terms of vehicle, passenger vehicles are expected to command more than half of the market revenue throughout the forecast horizon.
- Asia Pacific dominated the market in 2016, accounting for over 48.0% of the market revenue.
- Manufacturers either outsource powertrain or batteries from specialized suppliers or carry out the entire manufacturing process. Key players in the market include Hitachi, Ltd.; NEC Corp.; Johnson Controls; LG Chem Ltd.; and Tesla, Inc. These companies have a firm foothold in the market with capabilities to cater to the local as well as the international market.
Find out more about the research report, " Automotive Battery Market Size, Share & Trends Analysis Report by Battery Type (Lithium-Ion Based, Lead-Acid Based), by Vehicle Type (Passenger Vehicles, Electric Vehicles), and Segment Forecasts, 2018 – 2025," at www.grandviewresearch.com/industry-analysis/automotive-battery-market.