Market Trends of Automotive Battery Industry
The Electric Vehicles Segment is Anticipated to Drive the Market
Governments around the world are setting ambitious targets to reduce emissions, and promoting the use of electric vehicles is seen as one way to achieve these goals. For instance, the European Union aims to reduce its greenhouse gas emissions by 55% by 2030, and China has set a target of having 25% of new cars sold by 2025 to be electric. Lithium-ion batteries, which are used in most electric vehicles, have seen significant improvements in terms of energy density, charging time, and overall performance. This has made electric vehicles more practical and appealing to consumers.
The increasing demand for EVs will lead to technological advancements in battery chemistry and materials, which will require more sophisticated and efficient automotive batteries to ensure safety and performance. Many prominent automobile manufacturers are focusing on building long-term business relationships with automotive battery manufacturing companies. For instance,
In June 2023, according to a Panasonic Holdings representative, the Japanese corporation intends to increase the output of electric vehicle batteries at a Nevada factory jointly managed with Tesla by 10% within three years. Panasonic Energy plans to add a 15th production line to the Gigafactory Nevada. At a meeting, Panasonic Energy announced a proposal to boost the Nevada factory's manufacturing capacity by 10% by March 2026.
As the electric vehicle market is growing, many companies are involved in the development and manufacturing of automotive batteries for commercial vehicles as well. Stellantis NV and Samsung SDI announced in May 2022 that they would invest more than USD 2.5 billion in a new joint-venture battery plant in Kokomo, Indiana.
With the electric vehicle market set to continue its rapid growth, the demand for automotive batteries is expected to rise in tandem, presenting significant opportunities for companies operating in this space.
Asia-Pacific is Expected to Dominate the Automotive Battery Market
Asia-Pacific is expected to have the fastest growth in the value of automotive batteries, owing to the increasing demand for electric passenger and commercial vehicles. The region has most of the battery manufacturers' presence and automobile vehicle manufacturers. China is the largest manufacturer and consumer of electric vehicles in the world. Sales targets, favorable laws, and municipal air-quality targets are supporting domestic demand. For instance, China has imposed a quota on manufacturers of electric or hybrid vehicles, which must represent at least 10% of total new sales. Also, the city of Beijing only issues 10,000 permits for the registration of combustion engine vehicles per month to encourage its inhabitants to switch to electric vehicles.
China has approximately 80% of the world's Li-ion manufacturing capacity, and it is by far the front-runner in the battery race. The nation also controls other facets of the battery supply chain, such as the extraction and processing of lithium and graphite, two of the crucial minerals used in batteries. Several players in the region are establishing various business strategies to gain market offerings. For instance,
- In June 2023, Mazda Motor, a Japan-based vehicle manufacturer, and Panasonic Corporation agreed to enter discussions on establishing a medium- to long-term partnership to meet the demand for battery electric vehicles and automotive batteries in a rapidly expanding market.
- In May 2023, the Orano group and the XTC New Energy group signed agreements to create two joint ventures devoted to the production of critical materials for electric vehicle batteries.
Increasing product demand for automotive applications in various countries, including South Korea, India, Malaysia, and Indonesia, is likely to influence the region's growth between 2024 and 2030.
