Automotive Battery Market Size, Share & COVID-19 Impact Analysis, By Battery Type (Lead Acid, Lithium-Ion, and Others), By Vehicle Type (Passenger Cars and Commercial Vehicles), By Engine Type (IC Engine and Electric Vehicle), and Regional Forecasts, 2021-2028

The global automotive battery market size was USD 43.32 billion in 2020 and is projected to grow from USD 45.10 billion in 2021 to USD 65.62 billion in 2028 at a CAGR of 5.5% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 2.79% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market demand and growth, returning to pre-pandemic levels once the pandemic is over.

As automotive sales are increasing worldwide, so is the demand for automotive battery. It is an essential component for the running of automobiles. Various batteries are adopted in automobiles for long-lasting performance. Some of them include lead-acid, lithium-ion, nickel-metal hydride, and others. They are rechargeable and are adopted in conventional and electric vehicles for running automotive and provide energy for electronic devices in headlights, motors, sensors, and others.

The surge in demand for global transportation is fueling the automotive battery market growth. In addition, the rising demand for energy due to an increasing number of electronic devices in automotive combined with the availability of high capacity automotive batteries is expected to boost the market growth during the forecast period. Moreover, growing consumer preference for electric vehicles as a future mobility solution is anticipated to propel the market growth.

Government Enforced Restrictions to Hinder the Automotive Production

The COVID-19 pandemic created a negative impact on the demand for automobiles. Additionally, disrupted transportation services and travel limitations due to lockdown during the pandemic have adversely affected the market growth. For instance, supply chain disruption and closed production facilities of vehicular batteries worldwide resulted in slower market growth. However, the market is likely to rebound post-pandemic due to the removal of limitations and demand for automotive batteries returning to pre-pandemic levels. Moreover, interrupted global public transportation networks due to lockdowns are anticipated to fuel personal automotive sales and drive market growth.

LATEST TRENDS

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Growing Electromobility Trend to Drive Market Growth

An increasing e-mobility adoption across developed economies and the changing automotive market in developing countries are likely to drive the demand for auto batteries globally. Manufacturers’ focus on the launch of new generation EVs coupled with increasing automotive sales and improving the standard of living among the populace is fueling the electrification in the automotive industry. Therefore, the growing demand for lithium-ion batteries in electric vehicles (EVs) is estimated to boost the growth of the market in years to come.

In the previous decade, worldwide EV sales registered a fast growth rate. For instance, as per the International Energy Agency, worldwide EV sales reached 2.1 million units in 2019, exceeding the 2018 figure. Electric cars contributed 2.6% of total car sales worldwide in 2019, and their share is rapidly increasing with time. Growing fuel prices and stringent norms and regulations regarding emission control are some of the factors fueling electric vehicle sales worldwide.

Furthermore, a significant reduction in the cost of lithium-ion batteries and efforts initiated by the manufacturers to deploy mass production facilities of Li-ion batteries will further reduce their price in the coming years. For instance, according to the Global Change Data Lab, the Li-ion battery costs reduced by around by 97% in past 30 years. The price of battery capacity of one kilowatt-hour was dropped from USD 7,500 in 1991 to USD 181 in 2018, which is 41 times less. The reducing price of an electric vehicle battery is expected to influence the adoption of EVs and create lucrative revenue growth opportunities for the market in the next few years.  

DRIVING FACTORS

Growing Preference for Zero-Emission Automobiles to Drive Market Growth

The growing preference for the adoption of emission-free hybrid and all electric vehicles due to health and environmental concerns along with falling battery prices and rising fossil fuel prices is anticipated to drive the market growth. Moreover, government support & financial incentive for the adoption of EVs combined with stringent emission norms on conventional vehicles is anticipated to propel the market growth.

Technological Advancements in Automotive Industry to Fuel Growth of the Market

Recent development and technological advancement in the automotive industry have increased the energy storage capacities of vehicular batteries, such as high energy density lithium-ion batteries. The enhanced capacity further increases the traveling range of electric vehicles. Hence, automakers’ plan to equip their upcoming automobiles with these advanced batteries is expected to drive the growth of the market in the years to come. Moreover, the availability of advanced products, such as fast automotive battery chargers for enhanced performance, will further accelerate the market growth in the next few years.

Surge in Automotive Sales to Boost Growth of the Market

The worldwide surge in automotive sales due to overburdened public transport and the utilization of electric vehicles in the mobility as a service market is likely to create new market growth opportunities. In addition, government initiative for the electrification of public transit is projected to propel the demand for lithium-ion batteries. Moreover, the growing electrification of commercial vehicles in developed countries is also expected to influence the growth of the market.

RESTRAINING FACTORS

Low Penetration of Electromobility in Some Underdeveloped Economies May Hinder Market Growth

The slow adoption rate of electric automotive in some developing and underdeveloped regions due to low electromobility penetration and changing government policies for import-export of an automotive battery may restrain the growth of the market in the future.

SEGMENTATION

By Battery Type Analysis

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Growing E-Mobility Trend to Augment Growth of Lead-Acid Segment

Based on battery type, the market share is split into lead-acid, lithium-ion, and others (nickel-metal hydride and others).

The lead-acid segment held the largest market share of 51.79% in 2020. Lead-acid batteries are highly adopted in conventional automobiles. Therefore, a large number of conventional vehicles present worldwide is driving the segment growth. For instance, according to the International Energy Agency (IEA), in 2019, conventional vehicles accounted for 97.4% of global car sales. Increasing demand for lead-acid battery in the aftermarket sales channel is influencing the segment growth. Additionally, lead-acid batteries are also used in electric vehicles to supplement other energy loads, such as electronic devices and sensors, used in vehicles. Hence, the growing adoption of electromobility is also expected to provide significant revenue growth opportunities for the segment during the forecast period.

The lithium-ion segment will witness the fastest CAGR of 8.6% during the forecast period. Falling prices of lithium-ion batteries, owing to technological advancement and mass production are expected to propel the segment growth over the forecast period. Additionally, government initiatives to increase e-mobility adoption by providing financial incentives and enforcing stringent norms & regulations are anticipated to fuel the demand for lithium-ion batteries worldwide. For instance, European Union implemented various emission control norms such as Euro 5 and Euro 6 across Europe to reduce carbon emission. Moreover, the running cost of electric automobiles is low as compared to conventional vehicles. Hence, rising fossil fuel prices are shifting customers’ interest in electric vehicles.

The others segment consists of batteries such as nickel-metal hydride and others. Nickel-metal hydride battery is highly utilized in hybrid electric vehicles. Therefore, increasing demand for hybrid vehicles globally is anticipated to fuel the growth of the segment over the forecast period.

By Vehicle Type Analysis

Surge in Global Passenger Car Sales to Fuel the Segment Growth

Based on vehicle type, the market is classified into commercial vehicles and passenger cars.

Passenger cars dominated the market in 2020 and will continue to hold a significant market share during 2021-2028. Increasing passenger cars sales are fueling the segment growth. As per the International Organization of Motor Vehicle Manufacturers, roughly 54 million units of passenger cars were sold worldwide in 2020, and the sales of commercial vehicles were nearly 24 million units. Additionally, rapidly growing passenger cars electrification and the manufacturers’ initiatives to launch a premium range of passenger EVs to grab early revenue growth opportunities in the transforming automotive industry are anticipated to fuel the growth of the segment in the ensuing period.

The commercial vehicles segment is estimated to register an impressive CAGR from 2021 to 2028. High use of lead-acid batteries in commercial vehicles and gradual electrification of commercial vehicles worldwide are some of the prominent factors driving the growth of the segment. Moreover, the surge in demand for the replacement of dead lead-acid batteries in commercial vehicles will accelerate the segmental growth in the ensuing period.

By Engine Type Analysis

Dropping Electric Vehicle Prices to Boost Segment growth

Based on engine type, the market is segmented into IC engine and electric vehicle.

The IC engine segment held the largest market share in 2020, owing to high sales of conventional vehicles worldwide. High availability and low cost of IC engine vehicles as compared to electric vehicles are expected to fuel their adoption worldwide. Moreover, high preference for IC engine vehicles in economies with low EV penetration, such as India, and increasing demand for IC engines for heavy-duty automotive, such as heavy-duty trucks and trailers, are anticipated to boost the segment growth in future.

The electric vehicle segment is expected to witness the fastest CAGR in the coming years. Increasing adoption of electromobility due to environmental concerns and rising fossil fuel prices are the prominent drivers of the segment growth. Additionally, dropping lithium-ion battery prices and government initiatives to provide financial assistance for the adoption of EVs are anticipated to propel the segment in the ensuing period. Moreover, manufacturer’s focus on converting their entire automotive offering emission-free to grab early revenue growth opportunities in future mobility solutions will positively influence the segment.

REGIONAL INSIGHTS

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Asia Pacific held the dominant share of USD 22.92 billion in the automotive battery market in 2020. The region is expected to register the fastest growth rate in the near future. Increasing passenger cars sales across China are fueling the market growth. For instance, as per the International Organization of Motor Vehicle Manufacturers, roughly 25 million units of vehicles were sold in China in 2020, which was significantly greater than any other country. Moreover, the growing sales and production of EVs in China will further accelerate the market growth in the near future. Additionally, the increasing penetration of EVs in emerging countries of Asia Pacific, including India, Taiwan and others, and the raw material availability in the region are anticipated to boost the growth of the market from 2021 to 2028.

North America is expected to witness a significant CAGR over the forecast period. The surge in the adoption of electric vehicles is increasing the demand for lithium-ion batteries. In addition, increasing sales and production of commercial vehicles across the U.S. will propel the demand for lead-acid batteries over the forecast period. Moreover, technological advancement in the region and the presence of major electric automakers, such as Tesla, General Motors, and others, will further influence the market growth over the forecast period.

Europe is estimated to register considerable CAGR in the years to come. The presence of a well-established auto industry in developed economies of Europe, including France, Germany, Italy, the U.K., and others, is anticipated to fuel the market growth. Government-enforced stringent norms and regulations in Europe have already boosted the adoption of electric vehicles. For instance, as per the International Council on Clean Transportation, in 2019, EV registrations across Europe exceeded 560,000 EV units, and the registrations are anticipated to increase in upcoming years. Moreover, European Union’s effort to boost the lithium-ion battery manufacturing capacity in the region is anticipated to create lucrative revenue growth opportunities in the European market.

In 2020, the rest of the world held the lowermost market share, owing to a weak automotive industry and sluggish economic growth compared to other regions. Nonetheless, the market is anticipated to grow in the upcoming years due to automakers’ future expansion plans in these regions.  

KEY INDUSTRY PLAYERS

Strategic Partnerships to Drive Competition

The rivalry in the market is increasing due to the presence of various manufacturers. Raw material suppliers play a major role in automotive battery production. Hence, players are focused on strategic partnerships with the major raw material suppliers to increase manufacturing capacity and improve consolidation in the global market.

Additionally, automakers’ initiative for strategic partnerships with the key players for an uninterrupted supply of automotive batteries further accelerates the competition. For instance, in July 2020, Contemporary Amperex Technology (CATL) and automaker Honda signed an agreement to form a comprehensive strategic alliance on a new energy vehicle for the stable supply and development of batteries.

Moreover, varying raw material prices are the major barriers for new entrants to enter the market. However, players are also establishing automotive battery recycling facilities to avoid disruption in manufacturing due to the unavailability of raw materials.

Contemporary Amperex Technology Co. (CATL) is the Prominent Manufacturer in Market  

Contemporary Amperex Technology Co. (CATL) is a prominent battery manufacturer based in Ningde, China. CATL is an expert in the development and manufacturing of lithium-ion batteries for electric vehicles and energy storage systems. Moreover, it also offers a battery management system (BMS).

Furthermore, CATL’s battery recycling facilities for New Energy Vehicles (NEV) further promote sustainable development of NEVs and ensure proper handling & disposal of vehicles along with used batteries. CATL supplies automotive battery packs to premium automakers worldwide. For example, in June 2021, CATL signed a contract to supply batteries to leading electric vehicle manufacturer Tesla. As per the contract, CATL will supply batteries to Tesla till December 2025. The contract will strengthen the stable and long-term cooperative relationship between the company and Tesla, which is in line with the interests of the company and its shareholders.

LIST OF KEY COMPANIES PROFILED:

• EXIDE INDUSTRIES LTD. (India)


• Panasonic Corporation (Japan)


• LG Chem (South Korea)


• GS Yuasa International Ltd. (Japan)


• Robert Bosch GmbH. (Germany)


• Hitachi Group Ltd (Japan)


• Contemporary Amperex Technology Co. Limited (China)


• A123 Systems (U.S.)


• SAMSUNG SDI CO. LTD (South Korea)


• BYD Company Ltd. (China)


• East Penn Manufacturing Company (U.S.)


• Exide Technologies (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2021: Daimler Truck AG and CATL to Expand Global Partnership


• In May 2021, premium automaker Daimler Truck AG and leading lithium-ion battery manufacturer CATL announced the expansion of their global strategic partnership to develop advanced next-generation batteries for truck-specific applications. 


• In March 2021, General Motors partnered with lithium metal battery developer SolidEnergy Systems to form a joint venture for EV battery development.

REPORT COVERAGE

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The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.

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