AUTOMOTIVE LEAD ACID BATTERY MARKET ANALYSIS

The global digital automotive lead acid battery market size was valued at US$ 29.34 Billion in 2023, exhibiting a Compound Annual Growth Rate (CAGR) of 4.1% from 2023 to 2030.

An automotive lead acid battery, commonly known as a starting, lighting, and ignition (SLI) battery, is a rechargeable battery used primarily to start an automobile's engine and supply it with electricity. Batteries are essential in majority of the electrical components for providing the necessary energy supply. These batteries are made using different material, like lithium-ion, zinc diode, lead acid, etc. Automotive lead acid batteries' main function is to power the starter in vehicles, which ignites the engine. In a lead acid battery, two different types of lead are combined with an acidic solution to accomplish an electrochemical reaction that transforms chemical energy into electric current, which in turn generates voltage in an automobile. Lead acid batteries not only power the vehicle but also the accessories like the radio, wipers, music player, and charging connectors for the air conditioner. Advancement in battery technology is leading to the improvement in the performance of the electronic components that make use of such batteries. This would lead to the increased adoption of these batteries and drive the growth of global automotive lead acid battery market during the forecast period.         

Global Automotive Lead Acid Battery Market- Regional Analysis

Asia Pacific held a dominant position in the global automotive lead acid battery market in 2022, followed by North America and Europe.

Figure 1. Global Automotive Lead Acid Battery Market Share (%), By Region, 2022

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Asia Pacific held a dominant position in the global automotive lead acid battery market in 2022, owing to factors like rapidly expanding automotive sector, rising EV (Electric Vehicle) infrastructure backed by the rapid economic development in the region, is driving the growth of automotive lead acid battery market during the forecast period. The demand for personal as well as commercial vehicles in the countries like India, China, Bangladesh, etc. is growing substantially. This growing demand in the automotive sector is resulting in the increased production of vehicles in the Asia Pacific region which is further leading the way for rise in demand for different components used by the automotive manufacturers including the lead-acid battery.

North America is another strong market for the lead acid battery. The automotive sector in the region of North America has been relied on the conventional vehicles that rely on lead acid battery for starting and powering various electrical systems. The replacement market for automotive is also significantly large in the North American region where the market for restoration and customization of old vehicles is a popular practice. These factors would ensure significant demand for lead acid batteries in the region and lead to the expansion of the automotive lead acid battery market during the forecast period.

Global Automotive Lead Acid Battery Market- Drivers:

Advancements in lead acid battery technology:

Lead acid batteries are a type of rechargeable batteries that operate on relatively low energy density. Although lithium-ion batteries have gained popularity in electric vehicles, lead-acid batteries remain essential for conventional vehicles and specific applications due to their cost-effectiveness and reliability. Over the years, improvements in lead-acid battery design and manufacturing have resulted in enhanced performance metrics, such as higher specific energy and power density. Absorbent Glass Mat (AGM) and Gel battery technologies are two notable advancements in lead-acid batteries. AGM batteries use a fiberglass mat to absorb and hold the battery's electrolyte, providing improved vibration resistance and spill-proof characteristics. Gel batteries, on the other hand, use a silica-based gel to immobilize the electrolyte, enhancing the battery's cycle life and deep-cycling capabilities. For instance, on July 28, 2023, Trojan Battery Company, announced the launch of new SLA (sealed lead-acid) battery that delivers consistent, unrivaled high output and up to twice the lifecycle of conventional lead acid batteries. These advancements in the lead acid battery technology would increase their adoption in automotive sector

 Increasing demand for automotive:

The increase in demand for automotive vehicles is indeed a significant driving factor in the global automotive lead-acid battery market. As the number of vehicles on the roads continues to grow worldwide, the demand for reliable and cost-effective energy storage solutions, such as lead-acid batteries, remains substantial. With the rise in global population, urbanization, and economic development, the demand for personal and commercial vehicles is increasing. This surge in vehicle sales directly translates into a higher demand for lead-acid batteries to power these vehicles' electrical systems. For instance, according to the report published by PIB (Press Information Bureau), a nodal institute established by Government of India for publishing data related to government policies, the automotive sales in India accounted for 17.5 million units for the year 2021-22. This shows the significant surge in demand for automotive which would lead to the expansion of global automotive lead acid battery market during the forecast period.

Global Automotive Lead Acid Battery Market- Restraint

Increasing adoption of lithium-ion batteries:

The automotive sector is witnessing a revolutionary shift from conventional vehicles to EVs (Electric Vehicles). But, EVs predominantly make use of the lithium-ion batteries. Lithium-ion batteries offer several advantages over lead-acid batteries, including higher energy density, faster charging times, longer lifespan, and lighter weight. These factors make lithium-ion batteries more suitable for electric vehicles, which has resulted in a preference for them in the EV market. As the adoption of EVs increases, the demand for lead-acid batteries, primarily used in conventional internal combustion engine vehicles, is likely to experience slower growth. For instance, on July 27, 2023, Servotech Power Systems, an India based manufacturer of EV charging solutions, announced that the company would invest US$ 3.65 million with a view to develop lithium ion charging components for EV. This increasing demand for lithium ion batteries can decrease the overall demand for lead acid batteries and lead to the contraction of global automotive lead acid battery market during the forecast period.

Counterbalance: Despite the growing popularity of electric vehicles, the conventional vehicle market is still significant, and it heavily relies on lead-acid batteries for starting, lighting, and ignition (SLI) systems. As long as internal combustion engine vehicles remain in use, there will be a steady demand for lead-acid batteries in the automotive industry. Moreover, Lead-acid batteries are relatively inexpensive compared to lithium-ion batteries, making them a cost-effective option for applications where high energy density or fast charging is not critical. As a result, lead-acid batteries are still widely used in budget-friendly vehicles and applications where price sensitivity is a significant concern.

Fluctuation in pricing of lead acid batteries:

The automotive lead acid battery market is very volatile. Price volatility can significantly impact the demand, supply, and overall market dynamics for automotive lead acid batteries. The primary raw materials used in lead-acid batteries, such as lead and sulfuric acid, are subject to price fluctuations based on global supply and demand conditions. Changes in commodity prices can directly impact the production cost of lead-acid batteries, leading to changes in their market pricing. Moreover, the manufacturing process of lead-acid batteries requires substantial energy input. Variations in energy costs, particularly for electricity, can influence the overall production expenses and, in turn, affect the pricing of lead-acid batteries. For instance, on March 31, 2023, Exide Industries, an India based battery manufacturer, reported a loss in the final quarter of the fiscal year 2022-23. This loss was primarily attributed to the increase in cost of the material used for manufacturing lead acid batteries used in the automotive sector. Hence, such price fluctuations and dynamic nature of the market is expected to affect the growth of global automotive lead acid battery market during the forecast period.

Counterbalance: To cater to the frequent price fluctuations, the companies manufacturing automotive lead acid manufacturing need to adopt a strategy where they develop strategic ties with multiple vendors from different regions in the world. This would ensure a continuous and reliable supply of raw material for the manufacturing of lead acid batteries throughout the year. Moreover having multiple vendors spread across different countries would ensure that an unfavorable condition in one market do not affect the supply of essential raw material in other markets. 

Global Automotive Lead Acid Battery Market- Opportunity

Emergence of techniques to increase durability and performance of lead acid batteries:

The lead acid battery market is undergoing significant development due to emergence of techniques that lead to improved performance of lead acid batteries. Researchers have been exploring the use of advanced lead alloys with improved chemical and mechanical properties to enhance the battery's performance and lifespan. These alloys can increase the battery's resistance to corrosion and improve charge-discharge cycles. The addition of carbon-based materials, such as graphene or carbon nanotubes, has shown promise in enhancing the electrical conductivity and mechanical strength of the battery's active materials. This can lead to better charge acceptance and overall performance.

Global Automotive Lead Acid Battery Market- Trends

Focus on Battery Recycling and Sustainability:

The focus on battery recycling and sustainability in the global automotive lead-acid battery market is driven by the increasing awareness of environmental concerns, the need for responsible waste management, and the growing emphasis on sustainable practices in the automotive industry. This trend encompasses various aspects related to the lifecycle of lead-acid batteries, including their production, use, and end-of-life disposal or recycling. Moreover, governments and regulatory bodies in many countries have implemented or strengthened regulations related to battery recycling to mitigate the environmental impact of lead-acid batteries. For instance, on June 19, 2023, GME recycling (Gianni Mori Engineering), an Italian recycler of batteries, installed a new axis rotatory furnace which will allow the company to recycle lead acid batteries more efficiently.

Increasing demand for automotive start-stop systems:

The increasing demand for automotive start-stop systems is indeed a notable trend in the global automotive lead-acid battery market. Start-stop systems have gained popularity in recent years as an effective technology to improve fuel efficiency and reduce emissions in internal combustion engine (ICE) vehicles. Start-stop systems automatically turn off the engine when the vehicle comes to a stop, such as at traffic lights or during prolonged idling, and restart it when the driver releases the brake or engages the clutch. For instance, In September 2022, Hyundai Motors, a South Korea based automotive manufacturer announced the launch of its new car model named, ‘Venue N Line’ which comes with auto start-stop system. This system uses the conventional lead acid battery in the car to operate. This is expected to increase the demand for lead acid batteries in automotive industry.

Global Automotive Lead Acid Battery Market- Segmentation

The Global Automotive Lead Acid Battery market is classified into the following segments based on battery type, sales channel, vehicle type and regions. Based on vehicle type, the passenger car segment in the global automotive lead acid battery market held the dominant position in 2022. The rising demand for passenger cars across the globe especially in the developing countries like, India, Bangladesh, China, etc. This is leading to the expansion of global automotive lead acid battery market. Rapid urbanization has resulted in the expansion of cities and increased commuting distances. Passenger cars offer convenience and flexibility for urban residents to travel within and outside the city, making them a popular choice for daily transportation needs. Moreover, emerging economies have experienced significant growth in their middle-class population. As incomes rise, more individuals and families can afford passenger cars, leading to increased demand, particularly in developing countries. This is leading to the increase in sales of passenger cars in the region, subsequently leading to the expansion of global automotive lead acid battery market during the forecast period.

Figure 2. Global Automotive Lead Acid Battery Market Share (%) Analysis and Forecast,By Region 2023

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The global automotive lead acid battery market was valued at US$ 29.34 Billion in 2023 and is expected to reach US$ 38.88 Billion by 2030, exhibiting a CAGR of 4.1% between 2023 and 2030.

Global Automotive Lead Acid Battery Market- Key Competitors

The major players operating in the global Automotive Lead Acid Battery market include Exide Technologies, Enersys Inc., FIAMM S.p.A, Johnson Controls Inc., GS Yuasa Corporation, CSB Battery Technologies, Panasonic Corporation, East Penn Manufacturing Company, and Leoch International Technology Limited. And Others.

Global Automotive Lead Acid Battery Market- Recent Developments

• On June 21, 2023, Schaeffler, a German based manufacturer of automotive components, announced the launch of new automotive lead acid batteries called ‘TruPower 2W’ The battery used VRLA (Valve Regulated Lead Acid) technology to ensure efficient and safe functioning of the battery.
• In September, 2021, Birla Carbon, an India based, manufacturer of carbon components for batteries, announced the launch of ‘Conductex i’ and ‘Conductex e’ range of carbon blacks for application in automotive lead acid batteries.
• In February 2020, GS Yuasa Corporation, a Japan based company that specializes in manufacturing of lead acid and lithium ion batteries, announced the launch of its SNS TS series of VRLA (Valve Regulated Lead Acid) batteries. The batteries come with increased lifetime and enhanced durability for application in automotive industry.
• In September 2021, Komaki, a Japan based manufacturer of electric scooters, announced the launch of its new offering named Komaki XGT-X1 which comes equipped with lead acid battery.

Global Automotive Lead Acid Battery Market- Impact of COVID-19:

The COVID-19 pandemic had a major influence on the operations of the majority of the industries such as manufacturing, information technology, automotive, etc. The pandemic's effects were multifaceted and influenced various aspects of the global automotive lead acid battery market. During the early stages of the pandemic, many countries implemented strict lockdown measures, leading to the closure of automotive manufacturing plants and dealerships. Reduced vehicle production and sales resulted in lower demand for automotive lead-acid batteries, as they are an integral component of traditional internal combustion engine vehicles. The automotive lead-acid battery market faced supply chain disruptions due to factory closures, transportation restrictions, and delays in raw material shipments. This disrupted production schedules and led to supply shortages for lead-acid batteries. As the markets started gaining momentum after the pandemic, the demand for automotive started gaining pace. This helped the market to revive and expand further.

*Definition: A lead-acid battery is a type of rechargeable battery that uses lead dioxide and sponge lead as electrodes immersed in a sulfuric acid electrolyte to store and release electrical energy. It is one of the oldest and most widely used battery technologies, commonly found in various applications, including automotive vehicles, backup power systems, and industrial applications.