GLOBAL AUTOMOTIVE BATTERY MARKET
INTRODUCTION
Battery is a critical component in any automobile. Whether it’s starting or ignition, powering the electronics, laminating the lights and most importantly complete propulsion in an electric vehicle the battery plays crucial role. Advanced gadgets and lighting, latest infotainment system and the shift towards EV across the world have been driving the battery market. The safety related to the support infrastructure however at certain instances remains as one of the concern.
AUTOMOTIVE BATTERY MARKET SEGMENTATION
By Type
- Lead-acid
- Lithium-ion
- Nickel based
- Others
By Vehicle Type
- ICE
- BEV
- PHEV
By Distributor Channel
- OEM
- Aftermarket
By Battery Size (KWH)
- <30
- 30-60
- 60-80
By Geography
- US
- Europe
- China
- India
- ROW
AUTOMOTIVE BATTERY MARKET DYNAMICS
Rising consumer preference for hybrid and electric vehicles will boost the battery market.
The strict emission standards set by the governments has led to increase in numbers of BEVs and PHEVs globally, this will increase the battery market as the batteries constitute for as many as 30-40% of the production price
BY TYPE
Lead-acid batteries are the oldest type of batteries still used extensively in the cars. The find numerous applications the major being Start Lighting & Ignition (SLI) application which is fundamental in every vehicle. The features such as start-stop functionality implemented in almost every new model will increase the lead-acid battery share in passenger cars segment. The new technology in infotainment will boost the lead-acid market. The high discharge rate from these batteries makes them primary choice to use them for start and ignition
Under Lead-acid batteries we witness 2 types based on its construction
- Valve Regulated Lead-Acid (VRLA)
- Flooded Lead Batteries
VRLA batteries hold the highest share in the market as they are superior in performance than the flooded batteries. The VRLA witnesses the higher penetration in the cars as they need less maintenance and there is no situation of electrolyte spillage unlike in flooded type.
The lithium-ion batteries are the fastest growing type of batteries and their application in PHEV and BEV has propelled its market. The Lithium-ion batteries possess high energy density making them most in-demand batteries for longer shelf life,
BY VEHICLE TYPE
The ICE powered passenger cars holds the majority of share in the market, solely due to its higher population. The automotive battery penetration among electric vehicles especially passenger car segment is expected to witness high rise. EVs account for 2.5% of overall passenger car sales across the world. The number is subjected to increase in the future considerably. This will boost the high capacity batteries market.
The graph below shows the battery market share by vehicle type:
BY DISTRIBUTOR CHANNEL
Aftermarket segment has occupied largest share in the market. Also, the aftermarket replacement of batteries is expected to see a rise. The OEM battery market is expected to witness a steady growth owing to increase in EV sales.
US AUTOMOTIVE BATTERY MARKET
USA has the leading lead-acid battery manufacturers and this will promote market growth. Strict emission control laws will propel the battery production in the country. US BEVs has the highest capacity of batteries compared to all other regions around 60KWH. The need for the high capacity battery will increase the US market share.
EUROPE AUTOMOTIVE BATTERY MARKET
There is a growing demand for Absorbent Glass Mat (AGM) batteries which are also called as advanced lead acid batteries. European Union has spent $550 million on R&D of the battery projects targeting to be the leader in the battery market.
CHINA AUTOMOTIVE BATTERY MARKET
China is the largest EV market and holds more than 50% of market share in global EV sales. This is the major boosting the battery market. Moreover, there is an increase in brands coming up with the battery production plants in China. China is among the leading lithium producers, the easy availability of raw materials will boost the lithium-ion battery market.
INDIA AUTOMOTIVE BATTERY MARKET
Lead-acid batteries hold the major share in the Indian market. The highest number of 2 wheelers and low penetration of EV cars in India has resulted in lead-acid battery to be market leader. However, increase in electric 2 wheeler and car models will expand the lithium-ion battery market in the region.
The BS-VI norms arrival in India will boost the penetration of higher capacity batteries in two wheeler segment.
AUTOMOTIVE BATTERY MARKET SIZE AND FORECAST
Battery manufacturers are focused on producing compact and cost effective batteries. Thus the various opportunities will boost the market in future.
China’s plan to extend the subsidies and incentives to EV car owners will revive the EV car sales. This will help quicken the battery market in future.
The growth and development of the automotive battery market is steered by the rising demand for electric vehicles that contribute to zero-emissions. The growth is also dependent on factors such as the decrease in cost and complexity of the BMS (battery management system) and increase in the awareness of climate change globally. With the advancement in Li-ion battery packs, demand for electric vehicles and government regulations on climate control, the growth of this sector is expected to rise.
However, the impact of the COVID-19 pandemic has been inevitable on any industry due to lockdowns and manufacturing halts. The pandemic has reduced the growth predicted for the automotive battery markets as most of the battery packs are manufactured in China. To subside the dependence on China, companies across the world have paved the way for new technologies and opportunities.
The highest growth rate is estimated in the Asia-Pacific region, where China represents the fastest developing automotive battery market due to the high demand in commercial as well as personal zero-emission vehicles.
Governments across the globe are introducing incentives and tax benefits to promote the incorporation of electric vehicles which in turn uplifts the demand for Li-ion automotive battery packs. The US provides IRS tax credit (Internal Revenue Service) in the amount of $2500-$7500 per new EV purchased.
In the Asia-Pacific region, governments are providing subsidies as incentives based on the difference between price of EV and ICE-enable vehicles with a maximum limit of 85,000 CNY, it is providing a flip in this market.
The battery market for the automotive sector was valued at worth $XX Billion in the year 2020, the market is expected to increase in value with XX% CAGR at $XX Billion by the year 2026.
RECENT AUTOMOTIVE BATTERY MARKET TREND
- In March 2021, LG Chem announced estimates to double the manufacturing capacity of batteries in China for Tesla. It will also delegate the increasing demand for Tesla’s Model 3 from factories in China and Korea to Tesla’s production units in Germany and USA.
- In March 2021, Amara Raja Batteries, the second largest producer of automotive batteries in India, opened operations to develop Li-ion cells as its maiden technology center facility in Andhra Pradesh.
- Exide Technologies introduced dual lid DIN batteries and a new generation of UPS-Power NXT IoT enabled.
- As of March 2021, Varta AG has received a public funding of EUR 300 million for its battery cell manufacturing facility (IPCEI).
- Companies are introducing battery swapping and battery-as-a-service (BaaS) as part of new business models. These allow the customers to swap/change batteries once discharged and saves time on recharging.
- In November 2020, CATL and RCS global group announced partnership to identify CATL’s lithium, cobalt and graphite suppliers. RCS will account for conformance with the human and environmental rights for the suppliers developing a responsible and clean supply chain system.
- The company in August 2020, introduced a new EV battery without nickel or cobalt. The company’s economical strategy has reduced significant production costs as cobalt is one of the most expensive materials used in the battery.
- In June 2021, CATL and SAIC motor group have launched the second phase of the advanced traction battery project for industrialisation.
- In April 2020, Samsung SDI announced the replacement of the liquid electrolyte with a solid electrolyte in the battery cells to improve battery performance.
- Panasonic Corporation in collaboration for a new battery visualisation technique with Japan Fine Ceramics Center (FJCC) and Institute of Materials and System Nagoya University has introduced a technique to Visualize real time Li-ion battery dynamics in solid state batteries with a nanometer scale. The technique uses scanning transmission electron microscopy (STEM) and machine learning.
- As of March 2020, Samsung SDI has acquired an addition of 15% shares in the Samsung SDI-ARN power battery company (SABP) . It is now the majority stakeholder with the ownership of 65% in the company.
- As of July 2020, LG Chem has declared the recycle and reuse of its batteries by developing technologies to estimate the remaining life from the batteries used by customers.
- BMW and Volkswagen have announced contracts to buy battery packs from Asian companies like CATL, LG Chem and Samsung SDI.
- Microvast has partnered with Gaussin power to introduce state-of-the-art modular battery packs with varieties of cell chemistry and has expanded into the French E-Bus market.
- The company has also entered into a joint development agreement with Oshkosh Corporation to facilitate battery innovation and collaboration for the future, where Oshkosh will invest $25 Million.
- The USABC (United States Advanced Battery Consortium LLC) has announced a $4.5 million contract to the company as part of the development project for low-cost fast-charge batteries for EVs.
- SK Innovation from South Korea to supply batteries for BAIC electric cars scheduled to release in the second half of 2020.
- Nissan has signed an agreement with APB Corporation to mass produce low cost lithium-ion batteries for EV in Japan.
- Brookfiel Business Partners under the name Clarios has completed the acquisition of US based battery manufacturer Johnson Controls.
- GS Yuasa’s has set up a plant in Hungary and has started producing 12-V lithium-ion batteries for European car makers.
- BYD, Chinese EV and battery manufacturer has launched its new product ‘Blade Battery’ and it is expected to optimise the space utilisation up to 50% only 1.35 cm in thickness and mitigate concerns about battery safety in EV.
- Due to the ongoing COVID-19 pandemic, it will cause the shortage in demand of lithium, thus affecting the battery supply at least till mid-2021.
- Cummins has completed acquisition of Johnson Matthey automotive battery manufacturer from the UK.
COMPETITIVE LANDSCAPE
Some of the leading players in the global market are BYD (China), Microvast (US), Exide Technologies (US), GS Yuasa (Japan) and Varta (Germany).
The automotive battery production market is extremely competitive because of the presence of a high number of manufacturers. As the market is dependent on suppliers of raw materials and manufacturers; mergers, joint ventures and acquisition by companies are the key strategies in attempts to consolidate the market presence.
- Exide Technologies through the joint venture with Shenyang Dongbei Storage battery company operates in China for the mass production of automotive batteries.
- Panasonic and Toyota have announced the joint venture of producing battery packs for EVs.
- Panasonic and Tesla have announced the collaboration for the mass production of batteries for automotive use to begin in the Gigafactory setup in Nevada.
The BYD group had the revenue of $23.66 million, out of which approximately 8% represented for the rechargeable batteries and photovoltaic products. The majority 53% represented automobiles and related products while the rest 39% represented mobile handset components and assembly services for the year 2020.
“The price of the battery pack manufactured by CATL decreased to $130.7/kWh in the year 2020 with a reduction of 8.6%. However, the revenue increased to $7.77 billion with an increase in the net profit to $860 million. In the year 2020, the company’s sale of Li-ion batteries also rose to 46.84 GWh with an increase of 14.36 %.”
Bosch GmbH reported a sales revenue of EUR 71.5 billion with a total profit after tax reduction of about EUR 749 million in the year 2020. The company has EUR 1.7 billion in EBIT employing 73,000 engineers and researchers across the globe.
Varta AG has reported the revenue of EUR 869.58 Million with a whooping increment of 139.8% in the year 2020 as opposed to the year 2019. The company generated a consolidated result of EUR 95.5 Million with an increase of 89.3% in the 2020 as that of EUR 50.5 Million in the year 2019.
Exide Technologies had a net turnover of INR 9,857 Crores with an increase of 9.5%, operating at the profit of INR 1,365 Crores with an increase of 7.4% in the fiscal year 2020. Although the growth was slower than anticipated due to the drop in sales of electric vehicles and halts in manufacturing units across the globe, the company maintained a steady pace.
COMPANY PROFILE
- Exide Technologies
- Microvast
- BYD Co Ltd
- GS Yuasa
- Clarios
- Bosch GmbH
- A123 Systems
- Varta
- East Penn US
- Furukawa Japan
