Market Trends of India Battery Industry
Automotive Segment to Witness Significant Growth
- India is expected to be a major investment hotspot for battery companies in the coming years because of policy-level support from the respective governments encouraging the manufacturing sector.
- India is one of the largest automobile markets in the world, and in 2022, the total passenger vehicle production reached 259,318,67 units. The country produced 103,562,6 commercial vehicles in FY-2022.
- The two-wheeler segment dominates the automotive market owing to a growing middle class and a young population. Organized companies sell branded batteries with warranties, while unorganized companies provide no warranty or after-sales, sell recycled batteries, and offer products at a 30-35% discount to branded ones. The Indian automotive replacement battery market is leading the lead-acid battery market.
- In 2022-23, Maruti Suzuki India, the country's largest automaker, had its greatest wholesales, up 19% from 165,265,3 units in 2021-2022 to 196,616,4 units. Domestic shipments climbed by 21% in 2022-23 to 170,683,1 units from 141,427,7 units the previous fiscal year.
- With an increasing population and accessible financing facilities, the automobile sector is expected to grow significantly during the study period. Electric vehicle (EV) sales are expected to support the segment.
- The factors above are expected to help the automotive segment gain significant momentum in the country, which in turn, is expected to help the battery market grow during the forecast period.
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Increasing Demand for Electric Vehicles (EVs) to Drive the Market
- Electric vehicles (EVs) are expected to play a central role in achieving the UN Sustainable Development Goals. In India, the adoption of EVs is likely to grow significantly with the increasing demand for clean energy sources. The government has plans to achieve a target of 30% electric vehicle adoption by 2030, powered primarily by the electrification of two-wheeler, three-wheeler, and commercial vehicles in India.
- In India, more than 3 million fossil fuel-powered passenger vehicles are sold annually, and a few automakers, including Mahindra & Mahindra Ltd, Tata Motors Ltd, and Ashok Leyland Ltd, are making EVs domestically. Overseas companies such as Hyundai Motor Co. and Suzuki Motor Corp. are also entering the new segment as the government plans to have green vehicles comprise about a third of its fleet by 2030.
- The market will likely be dominated by electric vehicles that are majorly used by passenger carriers. The demand for supplying batteries to e-rickshaws and small privately-owned three-wheeler taxis is expected to grow by more than 20% in the forecast period.
- As of December 2022, there were more than 1.8 million electric vehicles in India. Over half of India's EVs were three-wheelers, accounting for around 920 thousand. India's electric vehicle market is changing rapidly; it was estimated that by 2035 the automobile market will be fully electric.
- Moreover, in February 2023, Renault and Nissan revealed a new long-term vision for India, including increased production and R&D activities, introducing electric vehicles, and shifting to carbon-neutral manufacturing. The firms will collaborate on six new production vehicles, including two fully electric cars, from their base in Chennai. They are expected to invest approximately USD 600 million to support the new projects.
- Therefore, the increase in the adoption of electric vehicles is expected to drive the battery market in India during the forecast period.
