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The Global Battery Market is predicted to be valued at $298.1 million by 2031, surging from $98.0 million in 2021, at a noteworthy CAGR of 12.1%.
The battery industry, like many other industries, has been affected by the COVID-19 pandemic. The global economic slowdown has led to a decrease in demand for batteries used in various applications such as automotive, consumer electronics, and energy storage systems. Moreover, supply chain disruptions and the closure of manufacturing facilities have also affected the production and delivery of batteries. In the automotive sector, the demand for batteries for electric vehicles (EVs) has been impacted due to the COVID-19 pandemic. The production of EVs has been affected due to supply chain disruptions, and decreased demand for vehicles in general, which has resulted in a decline in demand for batteries used in EVs. Also, in the consumer electronics sector, the demand for batteries has increased due to the shift towards remote work and online learning. However, the overall demand for consumer electronics has also been affected due to the global economic slowdown, which has led to a decline in demand for batteries used in these devices.
Government incentives and regulations are important drivers of the battery market, as they can influence demand for batteries and create favorable conditions for battery manufacturers and suppliers. Incentives are frequently provided by governments around the globe to entice people to buy electric vehicles, which are significant battery consumers. These incentives, which can come in the form of tax credits, rebates, or subsidies, support the expansion of the electric vehicle market by fostering demand for batteries. Governments are enacting regulations that make battery manufacturers accountable for the recycling and disposal of their goods on a more frequent basis. Manufacturers are encouraged by these regulations to develop more environmentally friendly battery technologies and to invest in recycling infrastructure.
However, the main challenge faced by the battery market is the limited lifespan of batteries. All batteries have a limited number of charge cycles before they start to degrade, and eventually they will need to be replaced. This presents a challenge for applications where batteries need to be replaced frequently, such as in portable electronics or electric vehicles.
The need for more adaptable and effective ways to store and distribute energy is what is driving the rapidly expanding energy storage market within the larger battery market. Batteries and other technologies are used by energy storage systems to store excess energy produced by renewable resources like wind and solar and release it when needed. Energy storage systems can be used to balance the grid and store excess energy generated during periods of low demand, which can then be released during periods of high demand. Energy storage systems can be used in homes to store energy generated from rooftop solar panels, allowing homeowners to use their own renewable energy and reduce their reliance on the grid. Energy storage systems can be used in commercial and industrial settings to store energy and reduce peak demand charges, which can be a significant cost for businesses. Owing to all these factors, the energy storage systems present a significant opportunity for the battery industry, as demand for renewable energy sources continues to grow around the world.
The global battery market is segmented based on battery type, application, and region.
Battery Type:
The battery type segment is further classified into lithium-ion batteries, lead-acid batteries, and others. Among these, the lithium-ion batteries sub-segment accounted a dominant market share in 2021. The growing demand for electric cars as an alternative to conventional fuel-based cars is projected to foster the usage of Li-ion batteries. The automotive sector is the largest user of such power sources. Currently, the main cause of EVs' higher cost than internal combustion engines (ICE) vehicles is their expensive batteries. Many nations are providing subsidies for EVs by taking this into account. Additionally, as a result of the establishment of numerous massive manufacturing facilities, primarily in Asia-Pacific, Europe, and North America, battery prices will decline, bringing down the price of electric cars.
Application:
The application segment is further classified into automotive & transportation, consumer electronics, energy & power, telecom, and others. Among these, the automotive & transportation sub-segment accounted a dominant market share in 2021. The primary factors propelling the automotive battery market are the rising consumer preference for clean-running electric and hybrid vehicles and the rising demand for ideal automotive batteries that can offer adequate reserve capacity, which denotes the amount of electrical energy the battery can deliver when it is fully charged. The implementation of supportive policies by federal, state, and local administrative bodies to sustain long-term benefits for successful EV manufacturing, as well as new hybrid and electric automotive models from OEMs, are driving the growth of the battery market. Additionally, the automotive & transportation battery market is positively impacted by rising vehicle production and sales, increased transportation, technological advancement, rising demand for advanced technologies, changing lifestyles, and an increase in disposable income.
Region:
The battery market in the Asia-Pacific region is projected to show the fastest growth during the forecast period. The utilization of lithium-ion batteries is anticipated to experience significant growth in the region due to the growing deployment of electric vehicles in nations like China and India as well as the high demand for electronics due to urbanization and rising power purchase parity. According to estimates, a sizeable portion of the population in Asia-Pacific lacks access to electricity and relies on traditional fuels like kerosene and diesel for their lighting and mobile phone charging needs. Due to the technical advantages and declining lithium-ion battery prices, lithium-ion battery integrated energy storage solutions are likely to see an increase in adoption. One of the biggest markets for electric vehicles is China, where the EV adoption is rising in line with the country's clean energy policy. In addition, the Chinese government has been offering both monetary and non-monetary incentives to encourage the use of electric vehicles. A Chinese energy storage company named Contemporary Amperex Technology (CATL) announced plans to erect a li-ion battery production base in Guangdong in February 2021. The project will cost USD 1.9B/25 GWh in the first phase and 150 GWh by the end of 2031.
Some of the leading battery market players are
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