Market Trends of Vietnam Battery Industry
Lead-acid Battery to Dominate the Market
- Starting lighting ignition (SLI) batteries start automobiles and other internal combustion engines. Though they are not used for deep discharge applications, they excel in applications requiring a high current for a brief time.
- SLI batteries are mostly lead-acid batteries used in automotive (excluding electric vehicles) applications. A significant fraction of the lead-acid battery is used for SLI applications.
- The energy-to-weight ratio of a lead-acid battery is low. However, it can supply large surge currents, indicating a high power-to-weight valuable ratio for SLI applications. Due to the low cost, lead-acid batteries are preferred when the price is more critical than the energy-to-weight ratio. For example, they are used in backup supplies for mobile phone towers, hospitals, and off-grid remote storage.
- Lead-acid batteries in automotive applications contribute to more than 60% of the market. Automotive (excluding electric vehicles) batteries are mostly SLI batteries. A lead-acid battery can also be used for in-vehicle entertainment systems, power steering, power locking, power window systems, etc.
- In a lead-acid battery, plates are made up of lead and lead dioxide, and a chemical reaction occurs when these plates are immersed in the sulfuric acid and water solution, leading to the production of DC voltage in the range of 6 to 12 voltage, which powers the system of the car.
- According to Vietnam Automobile Manufacturers' Association (VAMA), the sales volume of passenger vehicles in Vietnam amounted to about 284 thousand units in 2022, with an annual growth of 39.5 % compared to the previous year.
- PINACO is one of the dominant players in the car battery market, accounting for nearly 40-45% of the market share. The company is a battery supplier of automobile and motorbike manufacturers, such as Ford Vietnam, Suzuki Vietnam, Mercedes-Benz Vietnam, Thaco Truong Hai, Kia Motors, Hyundai Vinamotor, Vina Mazda, Honda Vietnam, Mekong Auto, and Samco.
- Moreover, increasing telecommunications penetration is driving the demand for telecom infrastructure. The upcoming 5G technology is expected to create additional subscribers, even when consumers may continue using 4G services, thus creating other demand for regional telecommunication towers.
- Hence, such factors are expected to boost the demand for lead-acid batteries and the Vietnam battery market during the forecast period.
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Growing Demand for Lithium-ion Batteries Expected to Drive the Market
- The penetration of electric vehicles is anticipated to provide a massive impetus for the growth of the lithium-ion battery market. Vietnam currently imports a significant share of lithium cells and batteries. However, with the growing EV business worldwide, the country is witnessing new developments in EV manufacturing plants and vehicles.
- In 2022, a lithium-ion battery pack will cost around 151 US dollars per kilowatt hour. Lithium-ion batteries are among the most efficient energy storage systems on the market. In recent years, large-scale production and capital investment in battery manufacturing has reduced lithium-ion battery packs' cost and efficiency.
- Vietnam's government is looking to use technology to develop its major cities into smart cities. Electric automobiles meet the criteria of smart city concepts as more and more people move to urban centres.
- Furthermore, in May 2023, Pan Asia Metals signed a non-binding memorandum of understanding (MoU) to examine the feasibility of establishing a standalone lithium conversion factory in Vietnam. With such agreements' approval, lithium-ion battery manufacturing is expected to increase in the country.
- In April 2023, Li-Cycle Holdings Corp., an industry leader in lithium-ion battery resource recovery and North America's lithium-ion battery recycler, and VinES Energy Solutions announced the signing of a definitive agreement for a long-term recycling relationship. According to the agreement, Li-Cycle will become VinES' strategic and preferred recycling partner for Vietnamese-sourced battery materials beginning next year. Such a trend will likely continue during the forecast period and attract more investments in the country's battery market.
- Therefore, the growing demand for lithium-ion batteries is expected to drive the Vietnamese battery market during the forecast period.
