INDUSTRIAL BATTERY MARKET ANALYSIS

Market Challenges And Opportunities

Global Industrial Battery Market Drivers:

Declining cost of lithium-ion battery to boost the market growth

Increasing number of manufacturers are focused on reducing the cost lithium ion technology. The cost of lithium-ion batteries has decreased steeply in the last decade. The cost of lithium ion battery was US$ 176 per kWh in 2018, which was a 17.75% decrease compared to the cost in 2017. Moreover, the rise in production volume is also driving the decrease in cost of these batteries, along with the increased capacity. This in turn has created a competitive environment for manufacturers, which again leads to decrease in cost of the lithium-ion batteries. Thus, global industrial battery market is expected to witness substantial growth over the forecast period, due to decreasing cost of lithium ion batteries.

Rise in demand from data centers to augment the market pace

The growing adoption of machine learning (ML) and artificial intelligence (AI) along with emergence of 5G, the construction and deployment of data center as well as upgrading efforts in existing data centers are increasing all over the world. As per Coherent Market Insights, by 2025, the amount of data is likely to be more than 175 zettabytes all over the world. Several data centers around the globe are now moving to modern lithium-ion batteries from lead-acid battery cells. This is thus, supporting growth of the global industrial battery market.

Global Industrial Battery Market Opportunities:

Technological development in batteries to create business opportunities

Technological developments and advances in materials have increased the output and reliability of modern battery systems substantially. Along with this, economies of scale have reduced the cost required drastically. Batteries such as lithium-ion, lead-acid, and nickel-based batteries have been dominating the market significantly for a long time; however, these batteries also have limitations due to which manufacturers continue to be involved in technological development of these batteries. This in turn is anticipated to offer several growth opportunities in the global industrial battery market over the forecast period.

Increasing use of AI in R&D phase of battery manufacturing to offer growth opportunities

The increase in battery life is viewed as one of the major improvements in batteries in recent times, as the number of cycles newer batteries can go through has increased. There is a heavy spending on research and development by battery manufacturers for improving the life of battery further. In March 2019, researchers at Massachusetts Institute of Technology, Stanford University, and Toyota Research Institute announced the development of a machine learning model, which using artificial intelligence and comprehensive experimental data collection can predict the service life of a battery with precision. Such uses of Ai for R&D of batteries is further providing market players with multiple growth opportunities, which is likely to support the market growth in the near future.  

Global Industrial Battery Market Restraints:

Demand-supply mismatch of raw materials to obstruct the market growth

As the cost of lithium-ion batteries is decreasing, the demand for minerals and batteries needed for manufacturing is increasing significantly. This is further leading to rise in prices of minerals and in some cases, it is creating shortage of mineral supply. Due to the growing investments in manufacturing of electric vehicles, consumer electronics sector is competing with the EV industry for lithium-ion batteries. The rise in costs of minerals is hindering the efforts of battery manufacturers trying to reduce cost of batteries. Thus, these factors are expected to hamper growth of the global industrial battery market over the forecast period.

Unfavorable conditions arising due to Covid-19 pandemic to limit the market growth

The coronavirus outbreak impacted several industries across the globe. It majorly impacted the supply chain in energy industry, specifically industrial batteries and renewable energy technologies. Due to the pandemic, the world has been acknowledging its overdependence on the Asia Pacific regions, specifically China for the major raw materials. Thus, due to restricted transportation, major market activities were hindered during the pandemic, which is expected to negatively impact growth of the global industrial battery market over the forecast period. However, as the pandemic situation has return to normal in almost all the regions, the market is likely to regain its growth in the near future.                       

Figure 2: Industrial Battery Market, Revenue Share (%), By Application, 2022

Global Industrial Battery Market Segmentation:

The global industrial battery market report is segmented into Battery Type and Application

Based on Battery Type, the market is segmented into Lithium-ion, Lead-acid, Nickle-based, and Other Battery Types. Out of which, Lithium-ion is expected to dominate the global market over the forecast period and this is attributed to the favorable capacity-to-weight ratio of these batteries. Moreover, due to the properties such as higher energy density, decreasing cost, and better performance, demand for these batteries is increasing, which is also driving growth of the segment.

Lead-Acid Battery segment is also expected to witness significant growth in the near future and this is owing to the growing applications of lead-acid batteries. Moreover, low cost of these batteries is creating strong demand for them, which is further supporting growth of the segment.  

Based on Application, the market is segmented into Forklift, Telecom, UPS, and Other Applications. Out of which, Forklift is expected to dominate the global market over the forecast period and this is attributed to the increasing use of industrial batteries in the forklift segment. Market players in industrial equipment manufacturing are making use of lithium power for replacing fossil fuel powered forklifts/trucks, which is driving growth of the segment.

Telecom segment is also expected to witness significant growth in the near future and this is owing to the increasing shift of telecom companies toward energy efficient solutions for optimizing use of energy. This in turn is leading to companies leveraging high-efficiency batteries such as advanced VLRA batteries and lithium-ion batteries for archiving energy efficiency.