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Automotive Product Finder Magazine | E mobility and connected vehicles drive automotive batteries market
E mobility and connected vehicles drive automotive batteries market
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The automotive battery market is anticipated to register a CAGR of about 6.5 per cent, from 2019 to 2024, as per the Mordor Interlligence Forcast. The automotive battery market in India has witnessed significant growth in the recent years till 2018. This article takes a look at the factors contributing to the demand for automotive batteries.
The automotive battery market is expected to be driven by enhanced demand for electrified, micro-hybrid, and full-hybrid powertrains. This growth of the automotive battery market can be attributed to the increase in demand for automobiles and stringent emission standards set by numerous government agencies. The growth will be further driven by increasing environmental concerns on emissions from traditional automotive batteries and offering of different advantages with the advanced technologies which are used in present batteries.
Auto electronics demand: Today, vehicles have become more technologically advanced and batteries have to keep pace with those changes. Modern vehicles also use a lot of gadgets which put more demand on the battery in terms of capacity and performance. An Exide spokesperson believes, “While designing new batteries for the market, we have to keep in mind that cars use electronics and gadgets too. In future batteries will become more intelligent and battery management systems might become cloud based. For example, a car owner might be able to check the health of his battery from an app in his computer. Such batteries will be continuously uploading data about itself and the user can check that data.”
Industry awaiting BS VI implementation
In a bid to have a clear picture over the industry and its demand, automotive battery manufacturers have delayed their expansion plans till the BS VI norms are implemented. Excide believes that OEM demand will stabilise but will have to wait and watch how the industry behaves post BS VI implementation.
Facility expansion plans by battery majors are on hold, considering the market conditions.
Excide has currently held its large scale capacity expansion for automotive batteries until the OE demand does not pick up, there is no capacity shortage in the industry.
Excide has announced their plans to enter the lithium-ion battery manufacturing business in collaboration with their Swiss partner, Leclanche. However, detailed business plans are yet to be announced. An official from the company, states, “One has to remember that lithium-ion battery technology is complex and different types of applications require different types of technologies. For example, a lead acid battery for a large bus is technologically not much different from a car battery. This is not so in the lithium ion space. We will have to define the space within which we will operate and then make a public announcement.”
Segments on rise
Relative segments like warehousing and vehicles plying over short routes like three-wheelers have also helped automotive batteries to extend its hand to a stable growth. “The e-rickshaw battery market is estimated to grow at a CAGR of 16 per cent over till 2020 to Rs 41 bn,” states Jinesh Gandhi, Research Analyst, Motilal Oswal Securities Ltd.
“Even the warehouses have boosted demand for forklifts, pallet trucks, stackers, order pickers, and reach trucks among others, in turn driving demand for motive power batteries. Assuming motive power contributes 15 per cent to the industrial segment by 2022 (v/s 1 per cent currently), this segment offers an opportunity of Rs 25 to 30 bn as against less than Rs two bn currently,” speculates Gandhi.
The Indian battery market is experiencing a transformational change and is still at a very nascent stage to adopt Lithium-ion batteries. It will take time to make it more economical. EVs are gearing up due to the much expected rise in electrification initiative by Government of India. Introduction of EV across the nation by all major automobile giants have definitely paved way for a positive approach of EV adoption but it is estimated that by 2025 EVs will be functional on having the entire allied infrastructure which will help it to take it to another level. Lead acid batteries which are widely used across will continue to sustain its market. “Lead acid batteries have high range of applications in three wheelers and all other automobiles as well for SLI purpose. With more connected technologies, the size of the battery may decrease but it will still have its own set of applications,” says Sanket D More, Founding Partner, Emerging Power Systems and Producers Pvt. Ltd. (EPSPPL), Gazhiabad.
The lead acid batteries will not be completely wiped-out; rather it will coexist with the new system. “Contrary to general perceptions, electric cars (EV) have a 12v lead acid battery (LAB) as auxiliary battery for SLI (starter, lighting and ignition) applications. We believe LAB will remain relevant even in the EV world. We expect localisation of Li-ion battery to be highest priority for OEMs to reduce cost of batteries and lower forex exposure. Given the criticality of the battery and scope of differentiation it offers, we expect OEMs to manufacture EV batteries in-house. Li-ion batteries could be a USD 42 bn opportunity by 2030 (9x the automotive LAB opportunity). Based on this, the cell manufacturing opportunity would be USD 15 bn,” says Gandhi.
Given the criticality of the battery and scope of differentiation it offers, we expect OEMs to manufacture EV batteries in-house. Li-ion batteries could be a USD 42 bn opportunity by 2030.
Jinesh Gandhi, Research Analyst, Motilal Oswal Securities Ltd.
Lead acid batteries have high range of applications in three wheelers and all other automobiles as well for SLI purpose.
Sanket D More, Founding Partner, EPSPPL
E Mobility And Connected Vehicles
Drive Automotive Batteries
Emerging Power Systems And Producer
Motilal Oswal Securities
Lead Acid Batteries
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