Automotive Battery Market Size, Share & Industry Analysis, By Battery Type (Lead Acid, Lithium-Ion, and Others), By Vehicle Type (Passenger Cars and Commercial Vehicles), By Engine Type (IC Engine and Electric Vehicle), and Regional Forecast, 2024-2032

The global automotive battery market size was valued at USD 49.70 billion in 2023 and is projected to grow from USD 52.44 billion in 2024 to USD 82.90 billion by 2032, exhibiting a CAGR of 5.9% over the 2024-2032 period.

The automotive battery market is experiencing robust growth driven by several key factors. Firstly, the increasing adoption of electric vehicles (EVs) and hybrid vehicles is a major catalyst for market expansion. With a growing global emphasis on sustainable transportation and stringent emission regulations, automakers are increasingly shifting toward electric and hybrid vehicles, necessitating high-performance batteries. Additionally, advancements in battery technology, particularly in lithium-ion batteries, are enhancing energy density, durability, and charging capabilities, further driving market growth.

Moreover, the rising demand for automotive electronics, including Advanced Driver Assistance Systems (ADAS) and infotainment systems, is fueling the need for reliable batteries to power these components. Geographically, Asia Pacific dominates the automotive battery market, driven by the presence of key automotive manufacturers and the increasing adoption of electric vehicles in countries, such as China and India. Overall, the automotive battery market is poised for continued expansion as the automotive industry transitions toward electrification and the demand for efficient energy storage solutions continues to rise.

The COVID-19 pandemic had a mixed impact on the automotive battery market. While initial disruptions in production and supply chains led to temporary slowdowns, the market gradually recovered as restrictions eased. Increased focus on sustainability and government incentives for electric vehicles post-pandemic are expected to drive market growth. However, challenges, such as semiconductor shortages and fluctuating raw material prices, continue to pose uncertainties for the automotive battery market.

Automotive Battery Market Trends

Growing Electromobility Trend to Drive Market Growth

Increasing e-mobility adoption across developed economies and the changing automotive market in developing countries are likely to drive the demand for auto batteries globally. Manufacturers’ focus on the launch of new generation EVs, coupled with increasing automotive sales and improving the standard of living among the populace, is fueling the electrification in the automotive industry. Therefore, the growing demand for lithium-ion batteries in electric vehicles (EVs) is estimated to boost the growth of the market in years to come.

In the previous decade, worldwide EV sales registered a fast growth rate. For instance, as per the International Energy Agency, worldwide EV sales crossed 10 million units in 2022. Electric cars contributed 18%, up from 14% in 2022, and their share is rapidly increasing with time. Growing fuel prices and stringent norms and regulations regarding emission control are some of the factors fueling electric vehicle sales globally.

Furthermore, a significant reduction in the cost of lithium-ion batteries and efforts initiated by the manufacturers to deploy mass production facilities of Li-ion batteries will further reduce their price in the coming years. For instance, according to the Global Change Data Lab, Li-ion battery costs have been reduced by around 97% in the past 30 years. The price of a battery capacity of one kilowatt-hour dropped from USD 7,500 in 1991 to USD 181 in 2018, which is 41 times less. The reduced price of an electric vehicle battery is expected to influence the adoption of EVs and create lucrative revenue growth opportunities for the market in the next few years.  

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Automotive Battery Market Growth Factors

Growing Preference for Zero-Emission Automobiles to Drive Market Growth

The growing preference for the adoption of emission-free hybrid and all electric vehicles due to health and environmental concerns along with falling battery prices and rising fossil fuel prices is anticipated to drive the market growth. Moreover, government support & financial incentive for the adoption of EVs combined with stringent emission norms on conventional vehicles is anticipated to propel the market growth.

Technological Advancements in Automotive Industry to Fuel Growth of the Market

Recent development and technological advancement in the automotive industry have increased the energy storage capacities of vehicular batteries, such as high energy density lithium-ion batteries. The enhanced capacity further increases the traveling range of electric vehicles. Hence, automakers’ plan to equip their upcoming automobiles with these advanced batteries is expected to drive the growth of the market in the years to come. Moreover, the availability of advanced products, such as fast automotive battery chargers for enhanced performance, will further accelerate the market growth in the next few years.

Surge in Automotive Sales to Boost Growth of the Market

The worldwide surge in automotive sales due to overburdened public transport and the utilization of electric vehicles in the mobility as a service market is likely to create new market growth opportunities. In addition, government initiative for the electrification of public transit is projected to propel the demand for lithium-ion batteries. Moreover, the growing electrification of commercial vehicles in developed countries is also expected to influence the growth of the market.

RESTRAINING FACTORS

Low Penetration of Electromobility in Some Underdeveloped Economies May Hinder Market Growth

The slow adoption rate of electric automotive in some developing and underdeveloped regions due to low electromobility penetration and changing government policies for import-export of an automotive battery may restrain the growth of the market in the future.

Automotive Battery Market Segmentation Analysis

By Battery Type Analysis

Growing E-Mobility Trend to Augment Growth of Lead-Acid Segment

Based on battery type, the market share is split into lead-acid, lithium-ion, and others (nickel-metal hydride and others).

The lead-acid segment held the largest market share in 2023. Lead-acid batteries are highly adopted in conventional automobiles. Therefore, a large number of conventional vehicles present worldwide is driving the segment growth. Increasing demand for lead-acid battery in the aftermarket sales channel is influencing the segment growth. Additionally, lead-acid batteries are also used in electric vehicles to supplement other energy loads, such as electronic devices and sensors, used in vehicles. Hence, the growing adoption of electromobility is also expected to provide significant revenue growth opportunities for the segment during the forecast period.

The lithium-ion segment will witness the fastest CAGR during the forecast period. Falling prices of lithium-ion batteries, owing to technological advancement and mass production are expected to propel the segment growth over the forecast period. Additionally, government initiatives to increase e-mobility adoption by providing financial incentives and enforcing stringent norms & regulations are anticipated to fuel the demand for lithium-ion batteries worldwide. For instance, European Union implemented various emission control norms such as Euro 5 and Euro 6 across Europe to reduce carbon emission. Moreover, the running cost of electric automobiles is low as compared to conventional vehicles. Hence, rising fossil fuel prices are shifting customers’ interest in electric vehicles.

The others segment consists of batteries such as nickel-metal hydride and others. Nickel-metal hydride battery is highly utilized in hybrid electric vehicles. Therefore, increasing demand for hybrid vehicles globally is anticipated to fuel the growth of the segment over the forecast period.

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By Vehicle Type Analysis

Surge in Global Passenger Car Sales to Fuel the Segment Growth

Based on vehicle type, the market is classified into commercial vehicles and passenger cars.

Passenger cars dominated the market in 2023 and will continue to hold a significant market share during 2024-2032. Increasing passenger cars sales are fueling the segment growth. As per the International Organization of Motor Vehicle Manufacturers, roughly 67 million units of passenger cars were sold worldwide in 2023.  Additionally, rapidly growing passenger cars electrification and the manufacturers’ initiatives to launch a premium range of passenger EVs to grab early revenue growth opportunities in the transforming automotive industry are anticipated to fuel the growth of the segment in the ensuing period.

The commercial vehicles segment is estimated to register an impressive CAGR from 2024 to 2032. High use of lead-acid batteries in commercial vehicles and gradual electrification of commercial vehicles worldwide are some of the prominent factors driving the growth of the segment. Moreover, the surge in demand for the replacement of dead lead-acid batteries in commercial vehicles will accelerate the segmental growth in the ensuing period.

By Engine Type Analysis

Dropping Electric Vehicle Prices to Boost Segment growth

Based on engine type, the market is segmented into IC engine and electric vehicle.

The IC engine segment held the largest market share in 2023, owing to high sales of conventional vehicles worldwide. High availability and low cost of IC engine vehicles as compared to electric vehicles are expected to fuel their adoption worldwide. Moreover, high preference for IC engine vehicles in economies with low EV penetration, such as India, and increasing demand for IC engines for heavy-duty automotive, such as heavy-duty trucks and trailers, are anticipated to boost the segment growth in future.

The electric vehicle segment is expected to witness the fastest CAGR in the coming years. Increasing adoption of electromobility due to environmental concerns and rising fossil fuel prices are the prominent drivers of the segment growth. Additionally, dropping lithium-ion battery prices and government initiatives to provide financial assistance for the adoption of EVs are anticipated to propel the segment in the ensuing period. Moreover, manufacturer’s focus on converting their entire automotive offering emission-free to grab early revenue growth opportunities in future mobility solutions will positively influence the segment.

REGIONAL INSIGHTS

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Asia Pacific held the dominant share of USD 27.43 billion in the automotive battery market in 2023. The region is expected to register the fastest growth rate in the near future. Increasing passenger cars sales across China are fueling the market growth. For instance, as per the International Organization of Motor Vehicle Manufacturers, roughly 25 million units of vehicles were sold in China in 2020, which was significantly greater than any other country. Moreover, the growing sales and production of EVs in China will further accelerate the market growth in the near future. Additionally, the increasing penetration of EVs in emerging countries of Asia Pacific, including India, Taiwan, and others, and the availability of raw materials in the region are anticipated to boost the growth of the market from 2024 to 2032.

North America is expected to witness a significant CAGR over the forecast period. The surge in the adoption of electric vehicles is increasing the demand for lithium-ion batteries. In addition, increasing sales and production of commercial vehicles across the U.S. will propel the demand for lead-acid batteries over the forecast period. Moreover, technological advancement in the region and the presence of major electric automakers, such as Tesla, General Motors, and others, will further influence the market growth over the forecast period.

Europe is estimated to register considerable CAGR in the years to come. The presence of a well-established auto industry in developed economies of Europe, including France, Germany, Italy, the U.K., and others, is anticipated to fuel the market growth. Government-enforced stringent norms and regulations in Europe have already boosted the adoption of electric vehicles. For instance, as per the International Council on Clean Transportation, in 2020, EV registrations across Europe exceeded 600,000 EV units, and the registrations are anticipated to increase in upcoming years. Moreover, European Union’s effort to boost the lithium-ion battery manufacturing capacity in the region is anticipated to create lucrative revenue growth opportunities in the European market.

In 2023, the rest of the world held the considerable market share, owing to a weak automotive industry and sluggish economic growth compared to other regions. Nonetheless, the market is anticipated to grow in the upcoming years due to automakers’ future expansion plans in these regions.  

List of Key Companies in Automotive Battery Market

Strategic Partnerships to Drive Competition

The rivalry in the market is increasing due to the presence of various manufacturers. Raw material suppliers play a major role in automotive battery production. Hence, players are focused on strategic partnerships with the major raw material suppliers to increase manufacturing capacity and improve consolidation in the global market.

Additionally, automakers’ initiative for strategic partnerships with the key players for an uninterrupted supply of automotive batteries further accelerates the competition. For instance, in July 2020, Contemporary Amperex Technology (CATL) and automaker Honda signed an agreement to form a comprehensive strategic alliance on a new energy vehicle for the stable supply and development of batteries.

Moreover, varying raw material prices are the major barriers for new entrants to enter the market. However, players are also establishing automotive battery recycling facilities to avoid disruption in manufacturing due to the unavailability of raw materials.

Contemporary Amperex Technology Co. (CATL) is the Prominent Manufacturer in Market  

Contemporary Amperex Technology Co. (CATL) is a prominent battery manufacturer based in Ningde, China. CATL is an expert in the development and manufacturing of lithium-ion batteries for electric vehicles and energy storage systems. Moreover, it also offers a battery management system (BMS).

Furthermore, CATL’s battery recycling facilities for New Energy Vehicles (NEV) further promote sustainable development of NEVs and ensure proper handling & disposal of vehicles along with used batteries. CATL supplies automotive battery packs to premium automakers worldwide. For example, in June 2021, CATL signed a contract to supply batteries to leading electric vehicle manufacturer Tesla. As per the contract, CATL will supply batteries to Tesla till December 2025. The contract will strengthen the stable and long-term cooperative relationship between the company and Tesla, which is in line with the interests of the company and its shareholders.

LIST OF KEY COMPANIES PROFILED:

• EXIDE INDUSTRIES LTD. (India)


• Panasonic Corporation (Japan)


• LG Chem (South Korea)


• GS Yuasa International Ltd. (Japan)


• Robert Bosch GmbH. (Germany)


• Hitachi Group Ltd (Japan)


• Contemporary Amperex Technology Co. Limited (China)


• A123 Systems (U.S.)


• SAMSUNG SDI CO. LTD (South Korea)


• BYD Company Ltd. (China)


• East Penn Manufacturing Company (U.S.)


• Exide Technologies (U.S.) 

KEY INDUSTRY DEVELOPMENTS:

• March 2024: Morocco announced the establishment of its first industrial zone dedicated to electric vehicle battery production, with initial investments totaling USD 2.3 billion. The 283-hectare industrial zone is expected to attract investments from companies, such as Chinese firm CNGR and Moroccan-based African private investment fund Al Mada.


• February 2024: JSW Group plans to invest USD 4.82 billion to establish electric vehicle and battery manufacturing projects in Odisha. The conglomerate, which formed a joint venture with China's SAIC Motor in November, aims to compete with domestic and international players in India's growing EV market.


• November 2023: India unveiled its USD 80 billion plan to boost electric vehicle battery production. Several companies, including South Korea's LG Energy Solution Ltd., and prominent local entities such as Mahindra & Mahindra Ltd., Amara Raja Energy & Mobility Ltd., Exide Industries Ltd., and Larsen & Toubro Ltd., reportedly expressed interest during a consultation meeting with government officials.


• May 2022: Exide Industries announced an investment of USD 773.43 million to build the gigawatt-scale li-ion plant with SVOLT. The plant is expected to start over the next 3-4 years, and the plant would have an initial production capacity of 6 gigawatt-hours (GWh) with a goal to expand the capacity to 12 GWh within 8-10 years.


• October 2021: Omega Seiki Mobility announced the partnership with Exicom Telesystems for lithium-ion batteries for Omega's electric cargo vehicles. The partnership will provide Exicom's recently launched 10.8kW fixed batteries that offer a range of 120 km on a full charge to Omega Seiki Mobility. These batteries also come with added features, such as real-time battery analytics, high environment protection, long cycle life, and rugged design.

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.

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