Market Trends of India Lead-Acid Battery Industry
This section covers the major market trends shaping the India Lead-Acid Battery Market according to our research experts:
SLI Batteries Application to Dominate the Market
- Starting, lighting, and ignition (SLI) batteries have been in almost every car for the past 100 years. Generally, SLI batteries are used for short power bursts, such as starting a car engine or running light electrical loads. Moreover, these batteries supply extra power when the vehicle's electrical load exceeds the supply from the charging system (alternator) and act as a voltage stabilizer in the electrical system that evens out voltage spikes, thereby preventing them from damaging other components in the electrical system.
- SLI batteries are designed for automobiles and therefore are always installed with the vehicle's charging system, which means a continuous cycle of charge and discharge in the battery whenever the vehicle is in use. The 12-volt batteries have been the most-used batteries for more than 50 years. However, its normal voltage (while in use in the car and charged by the alternator) is close to 14 volts.
- The major factor attributing to the growth of the SLI battery market is the increasing demand for these batteries to power starter motors, lights, and ignition systems or other internal combustion engines with high performance, long life, and cost-efficiency. Moreover, lead-acid battery is the technology of choice for all SLI battery applications in conventional combustion engine vehicles, such as cars and trucks in India.
- Over the past few years, India has witnessed tremendous growth in per capita income. This, in turn, improved the level of disposable income. As a result, there has been a sharp increase in the sales of automobiles, particularly of the two and four-wheeler varieties. This has surged the demand for SLI batteries. According to the Society of Indian Automobile Manufacturers (SIAM), a total of 17.51 million vehicles were sold in India in 2021, which was down by 5.9%, compared to the previous year, when 18.62 million vehicles were sold. The decline was mainly due to the COVID-19 pandemic, which led to the temporary shutdown of the manufacturing facilities, thus leading to a decline in demand for SLI batteries.
- However, according to the Federation of Automobile Dealers Associations, passenger vehicle sales in December 2022 stood at 2,80,016 units compared to 2,58,921 units in December 2021, registering a 8.15% growth. In India, EV sales, witnessed a growth of 218.36 % compared to FY2021 and reached 4.29 lakh units in FY2022. Thus, with the recovering economy and demand for automobiles, the demand for SLI batteries is likely to increase during the forecast period.
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Increasing Demand for Telecommunication and Datacenter Applications
- The telecommunication industry in India is the second-largest in the world, with a total of 1.17 billion subscribers as of August 2022. Stationary batteries are used for a wide range of applications where power is necessary on a standby or emergency basis. These batteries are not discharged frequently due to minimal duration, and they do not require high storage capacity. Thus, lead-acid batteries provide a viable solution to the telecom sector.
- The growing population, the age of digitalization, and the launch of 4G services were prominent factors for the growing subscriber base in India during the last decade, which is projected to witness substantial growth with the upcoming launch of 5G services across the country. With increasing subscribers, companies are required to increase the number of telecom towers in the country, which has created a considerable demand for lead-acid batteries for backup purposes.
- According to the GSM Association (GSMA), the mobile economy of India is rising rapidly, and it will contribute significantly to India's gross domestic product (GDP). With increasing growth in the e-commerce industry and digitalization, lead acid battery manufacturers are set to expand their market shares across the country.
- According to the Telecom Regulatory Authority of India, as of November 2022, total telephone subscriptions accounted for 1170.18 million. India has the world's second-largest telecom market. The total subscriber base, wireless subscriptions, and wired internet subscriptions have all increased steadily. Tele-density was 84.61% and overall broadband subscriptions increased to 825.38 million as of November 2022.
- Moreover, the increase in the data centers and tower installations during the forecast period is likely to drive the demand for lead-acid batteries, until a viable alternative comes up that can be used instead of lead-acid batteries for battery-based power backup purposes. The lithium-ion battery has been emerging as a viable alternative to the lead acid battery. However, lithium-ion batteries are not expected to take over in the near future. In recent times, data centers have become an alternative real estate segment in the country, driving the market demand for lead-acid batteries. As of 2022, India has approximately 138 data centers, along with 502 service providers.
