Automotive Battery Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Automotive Battery Market is Segmented By Battery (Lead-Acid Batteries, Lithium-Ion Batteries, Others), By Engine (Internal Combustion (IC) Engine, Electric Powertrain), By Ampere Rating (Below 50 Ah, 50-70 Ah, Above 70 Ah), By Vehicle (Passenger Vehicles, Commercial Vehicles),  and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Market  Overview

Global Automotive Battery Market reached USD 65.2 billion in 2022 and is expected to reach USD 100.0 billion by 2031, growing with a CAGR of 5.5% during the forecast period 2024-2031. During the forecast period, advances in battery materials and development of new battery chemistries is likely to propel global market growth.

Ongoing research and development efforts are gradually yielding advancements in battery technologies, leading to improvements in energy density, safety, charging speed and overall performance. New materials and production technology will reduce battery costs and increase adoption over the medium and long term.

Automakers, battery manufacturers and tech companies formed strategic partnerships and invested heavily in the development of electric vehicles and battery technologies. For instance, in June 2023, Mazda, a Japanese automotive manufacturer announced a partnership with Japanese tech company Panasonic Corporation to develop lithium-ion batteries for their upcoming range of electric vehicles.  

Market Scope

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Market Dynamics

Increasing Global Production of Electric Vehicles (EVs)

Generous government subsidies and incentives along with growing adoption of zero emission regulations has caused automakers to shift towards increasing the production of electric vehicles (EVs). Global electric vehicle production surpassed 10 million for the first time ever in 2022. Furthermore, some automakers such as Volkswagen have announced that they will completely cease production of conventional vehicles and only offer electric vehicles in certain markets such as Europe starting from 2035. 

Another factor driving global electric vehicle sales is the development of battery charging infrastructure. Local goverments in partnerships with companies is deploying charging infrastructure for the benefit of electric vehicle owners. Lithium-ion batteries are the most preferred battery chemistry for electric vehicles since they have high energy density, longer lifespan and quick recharge capabilities. The lithium ion batteries require high-performance separators to ensure their safe and efficient operation. 

Ongoing advancements in electric vehicle battery technology have led to the development of batteries with higher energy densities and improved performance. The advancements often involve the use of advanced separator materials and designs that enhance the battery's efficiency, safety and overall performance. 

With rising demand, companies are investing in capacity expansion to ramp up production of battery separator materials. For instance, in March 2023, ENTEK International, a U.S.-based battery engineering company announced a USD 1.5 billion investment in building a new battery separator materials factory in Terre Haute, Indiana, U.S.

Advancements in Battery Technology

Battery technology has witnessed remarkable progress in achieving higher energy densities, meaning that batteries can store more energy in a smaller and lighter package. Battery technology advancements have led to batteries that are more durable and have longer lifespans. Improved battery chemistries and optimized cell designs have resulted in batteries that can withstand more charge and discharge cycles before experiencing significant capacity loss.

Advances in battery technology have contributed to a decline in the cost of lithium-ion batteries. Economies of scale, optimized manufacturing processes and reductions in the prices of raw materials have all played a role in lowering the cost of battery production. Companies are also entering into partnerships to commercialize new battery technologies. For instance, in May 2023, Amara Raja Batteries, an Indian battery manufacturer, signed an agreement with Gridtential Energy, a U.S.-based battery technology company to commercialize the production of bipolar battery technology. 

Supply Chain Constraints

Global battery demand has outpaced the supply of various critical materials such as nickel, cobalt and lithium. The demand-supply mismatch has created supply chain disruptions. The prices for major commodities such as nickel, cobalt and lithium fluctuates based on various geopolitical and economic factors. Price volatility impact the overall cost of battery production and directs impacts the competitiveness of electric vehicles. 

The manufacturing of automotive batteries requires specialized facilities and a skilled workforce. Scaling up production capacity to meet the growing demand for electric vehicles has been hihgly challenging for battery manufacturers. Production capacity constraints result in longer lead times for battery orders and limited availability, thus impacting market growth.

Segment Analysis

The global automotive battery market is segmented based on battery, engine, ampere rating, vehicle and region.

Lithium-Ion Batteries to Witness Faster Growth Over the Forecast Period

The rising global production of electric vehicles has led to a major increase in demand for lithium-ion batteries. Lithium-ion battery chemistry has some inherent advantages such as high energy density, enabling batteries to have a small form factor making it suitable for use in automotive applications, where space and weight constraints are critical. Furthermore, lithium-ion batteries have faster charging times and longer operational lifespans, making them reliable for use in automobiles. 

Although lithium-ion batteries are generally more expensive than lead-acid batteries, the various advantages offered by the battery are making it a more attractive choice for the automotive industry, which has led to increased adoption in recent years. Furthermore, governments are offering subsidies and grants for research into advancing lithium-ion battery technology. Advances in battery technology is likely to improve operational efficiency and reduce costs, thus increasing their adoption.  

With global electric vehicle production reaching all-time highs, automotive manufacturers are establishing lithium-ion battery manufacturing plants to expand production capacity in anticipation of future demand. For instance, in June 2023, Tata Group, a major Indian industrial conglomerate, announced an investment of Rs. 13000 crore (USD 1.58 billion) to establish a lithium-ion battery manufacturing facility in Gujarat, India.

Geographical Penetration

New Technological Advancements to Propel Market Growth in Asia-Pacific

Asia-Pacific is a rapidly developing and industrializing region. With its large population and strong economic growth, the region is expected to account for significant automobile demand over the coming years. According to data from the International Organization of Motor Vehicle Manufacturers (OICA), leading countries in the region such as China, India, Japan, South Korea and Thailand produced nearly 45.93 million passenger and commercial vehicles in 2022, accounting for nearly 54% of global production. Asia-Pacific thus generates significant demand for automotive batteries, especially in the OEM and aftermarket. 

China is currently are at the forefront of developing and integrating  new emerging automotive battery technologies. Supported by generous government subsidies, Chinese battery manufacturers have developed a range of new automotive battery technologies which are being gradually integrated into new vehicle models launched by domestic Chinese automotive manufacturers. 

For instance, in April 2023, Contemporary Amperex Technology Co., Limited. (CATL), Chinese battery technology company, unveiled a new battery with an energy density of 500 Wh/kg, at the Shanghai Auto Expo 2023, in Shanghai, China. Japan is also developing new automotive batteries. For instance, in June 2023, Toyota Motors, one of Japan’s leading automakers, announced plans to develop a new range of automotive batteries to power its upcoming range of electric vehicles.

Major Key Players

The major global players include Panasonic Corporation, LG Chem, GS Yuasa International Ltd., Robert Bosch GmBH, Hitachi, Ltd., Exide Industries Ltd., Contemporary Amperex Technology Co., Limited, A123 Systems LLC, Samsung SDI Co., Ltd and BYD Motors Inc.

COVID-19 Impact Analysis

The COVID-19 pandemic created several challenges for the global automotive battery market. With stringent restrictions and factory closures, automotive demand and production fell drastically during the pandemic period. It lead to a major reduction in demand for automotive batteries by OEM and the aftermarket. 

The pandemic also disrupted research and development activities into new battery technologies. Many companies’ cutback on research funding due to the economic uncertainty of the pandemic, thus creating delays and postponing the introduction of new battery technologies. With lingering supply chain disruptions in the aftermath of the pandemic, battery manufacturers were unable to immediately scale up production to take advantage of a robust demand recovery. 

Russia- Ukraine War Impact Analysis

The ongoing conflict between Russia and Ukraine has had wide ranging implications for the global market. Due to the economic sanctions and trade restrictions imposed on Russia, the global nickel prices have become extremely volatile due to supply shortages as Russia is a major nickel exporter. The price volatility is likely to impact automotive battery production. 

Furthermore, the Russian automotive battery market has been severely impacted by the war. All major western battery manufacturers have ceased local production operations and have left the Russian market. End-users are relying upon Chinese battery manufacturers and the grey market to fill the supply gaps. 

Key Developments

• In July 2023, Sunwoda, a Chinese battery manufacturing company announced an investment of USD 274.7 million to build a new battery production facility in Hungary.
• In July 2023, Stellantis, a multinational automotive manufacturing conglomerate announced an expansion of its partnership with Samsung, the South Korean tech conglomerate, to build a second battery plant in U.S.
• In July 2023, the Tata Group, an Indian industrial conglomerate, announced plans to invest USD 5 billion in a new battery factory in UK. 

Why Purchase the Report?

• To visualize the global automotive battery market segmentation based on battery, engine, ampere rating, vehicle and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development. 
• Excel data sheet with numerous data points of automotive battery market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as Excel consisting of key products of all the major players.

The global automotive battery market report would provide approximately 64 tables, 65 figures and 195 Pages.

Target Audience 2024

• Automotive Manufacturers
• Battery Manufacturers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies