Automotive Battery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The Automotive Battery Market was valued at USD 43 billion in 2020, and it is expected to reach USD 59 billion by 2026, registering a CAGR of 5.5% during the forecast period (2021 - 2026).

The impact of COVID-19 is inevitable on any industry as there were continuous lockdowns and halt of manufacturing units across the world. The COVID-19 pandemic has slowed battery supply chains as most battery cells are manufactured in China, thereby highlighting the dependence on China and the associated risks. This has spurred interest among various stakeholders for localization/regionalization of supply chains in the US and EU regions, paving the way for new opportunities in the market.

The global automotive battery market is anticipated to witness steady growth during the forecast period due to the increasing preference of end users for zero-emission hybrid and electric vehicles, owing to the falling battery price, reducing crude oil reserves, and environmental effects of conventional automobiles. In accumulation to this, an increase in the global battery production capacity has helped achieve economies of scale in the automotive battery industry, which is another major driver for market growth.

The highest growth rate is observed in Asia-Pacific, and the region is expected to grow further in the coming years. China, on the other hand, ranks as the fastest-growing automotive battery market, owing to the high demand for commercial and passenger vehicles. In addition, the new trend of vehicles with the latest features would be largely observed in North America and Europe, along with the United States and China. Increasing demands from other Asian countries such as India, Malaysia, Thailand, and the Philippines further impact the global market growth in a positively.

Scope of the Report

An automotive battery is a rechargeable battery, and it supplies electrical current to a motor vehicle. The batteries are mainly used for powering starting, lighting, and ignition system of a vehicle. Apart from this, it is also used to provide power to automobile accessories such as radio, wipers, music players, air conditioners, and charging plugs. The Automotive Battery Market Report covers the latest trends, COVID-19 impact, followed by technological developments in the market.

The scope of the report covers segmentation based on Battery Type, Vehicle Type, Engine Type, and Geography. By Battery Type, the market is segmented by Lead Acid, Lithium-Ion, and Other Battery Types. By Vehicle Type, the market is segmented by Passenger Car and Commercial Vehicles. By Engine Type, the market is segmented into IC Engines and Electric Vehicles. By Geography, the market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World. For each segment, market sizing and forecast have been done based on value (USD billion).

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Key Market Trends

The Lithium-Ion Battery Segment Expected To Have Significant Growth

The market for lithium-ion batteries is anticipated to observe the fastest growth during the forecast period. A lithium-ion battery is equipped for applications, which demand high-energy density solutions such as hybrid and electric automobiles. Additionally, in an effort to increase vehicle economies, manufacturers are continuously focusing on reducing the price of the battery, propelling the market growth, globally.

Compared to the traditional battery technology, lithium-ion batteries charge faster, last longer, and they have a higher power density for more battery life in a lighter package. The automotive lithium-ion battery has emerged as an eco-friendly, rechargeable power source compared to conventional batteries such as lead-acid and nickel-metal hydride batteries.

With the implementation of stringent fuel efficiency norms in countries such as the United States, India, Germany, and Japan, manufacturers are trying to reduce the cost of lithium-ion batteries, in turn increasing the demand for electric vehicles. For instance, in September 2019, Maruti Suzuki partnered with Toshiba and Denso to set up the world’s largest automotive lithium-ion battery manufacturing unit in Gujrat (India).

Numerous governments are providing incentives/ tax credits to promote the use of electric vehicles, which is expected to increase the demand for automotive lithium-ion batteries. For instance, the IRS (Internal Revenue Service) tax credit is USD 2,500-7,500 per new electric vehicle purchased for use in the United States. Similarly, California provides USD 2,500 rebates, Delaware provides USD 1,000 rebates, and Colorado provides USD 5,000 tax credits on the purchase of electric vehicles.

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