Automotive Battery Market to Boom in Asia-Pacific

With the growing number of people on earth, automotive production and sales continue to surge. Due to this, among their various components, the demand for batteries is booming too. Every vehicle, whether it runs on electricity or diesel or petrol (gasoline), requires a battery. Thus, the automotive battery market will have a rather prosperous future, says market research firm P&S Intelligence. Presently, since electric vehicles (EVs) are all the rage, the integration rate of batteries in them will shoot up.

Compared to an internal combustion engine (ICE)-based vehicle, an EV requires a much-larger and -powerful battery because this component is its main power plant (in case of battery electric vehicles [BEVs]). Moreover, apart from powering the motor, the battery supplies electricity to all the auxiliary components and systems, including lights, heating, ventilation, and air conditioning (HVAC) systems, advanced driver assistance systems (ADAS), navigation and entertainment units, and digital dashboards.

Automotive batteries are generally available in two broad chemistries: lithium-ion (Li-ion) and sealed lead–acid (SLA). Of these, SLA batteries have been more popular till now because they have been available for ages and are cheap. But, their energy density isn’t as high, which becomes a problem for EVs, while their disposal also has environmental issues. Thus, with the growing demand for sustainable mobility, Li-ion batteries have begun gaining preference.

This is because they accumulate more charge than an SLA battery of a similar size, which allows the EV to travel longer on a full charge. Currently, range anxiety is one of the biggest issues plaguing EV sales, especially since the charging infrastructure is vastly inadequate. In addition, most of the charging stations that exist are AC variants, which take up to 8 hours to charge the battery completely, which makes EVs a non-feasible option for fleet operators, such as delivery service providers and shared mobility companies.

Moreover, Li-ion batteries can be charged more times than SLA batteries, which means they have a longer life. Thus, with people keeping their vehicles longer than before, Li-ion batteries help people save on operational costs, by requiring less-frequent replacement. Another advantage of Li-ion batteries is that their disposal is not harmful to the environment and that their contents can be salvaged and recycled.

Moreover, with continuous advancements in technology and augmentation in the production output, Li-ion battery prices have come down massively, and they continue to drop further. From $500–800 per kilowatt-hour (kWh) in 2012, the International Renewable Energy Agency (IRENA) has observed a decline in the cost of automotive Li-ion batteries to $137 per kWh in 2020! With the battery accounting for almost 40% purchase cost of an EV, a reduction in their prices will go a long way in boosting the demand for EVs and, in turn, for the batteries themselves.

With such advancements taking place in the electric mobility ecosystem, Asia-Pacific (APAC) has been the largest automotive battery market till now, and the situation will remain unchanged in the coming years. Driven by strong environmental concerns, strict emissions regulations, and supportive regulations, China has been the world’s largest EV and automotive battery manufacturer for ages, and it is also the one that buys them in the largest numbers. Similarly, India is home to the largest electric rickshaw fleet, which again creates a high demand for SLA and Li-ion batteries.

Hence, with the booming EV sales, the demand for automotive batteries will keep rising.