The automotive lead acid battery market is expected to grow from US$ 16,860.5 million in 2020 to US$ 23,668.0 million by 2028; it is estimated to grow at a CAGR of 4.33% during 2020-2028.
Continuous production and acceptance of mild hybrid vehicles by top manufacturers such as Ford and Volkswagen is contributing to the rise of lead acid batteries for automotive applications. Also, the growing income of masses is further creating the demand for cars, which is positively boosting the production of cars. Therefore, countries such as India, are attracting attention of gigantic automakers for the establishment of car manufacturing plants. Recently, Tesla has announced about the establishment of a manufacturing plant in India. Such plants for automotive production would eventually create the demand for lead acid batteries as well. Furthermore, use of 12-volt lead acid batteries and regulations for BSVI compliant vehicles are also projected to foster the development phase of lead acid batteries.
Based on product, the SLI segment is expected to grow at a higher CAGR during the forecast period. SLI battery is designed for cars. Hence, it is always installed with the charging system of the vehicle. Hence, whenever the vehicle is in use, there is a continuous cycle of charge and discharge in the battery. SLI automotive batteries are designed to be fully charged at the time of starting the vehicle; and after the ignition, the lost charge, typically around 2% to 5% of the charge, is replaced by the alternator. Such batteries are not manufactured to be discharged below 50% depth of discharge (DOD) and when discharged below these levels, plates can get damaged and battery life may get reduced. Based on type, the market is segmented into flooded, enhanced flooded, and VRLA.
Similarly, based on end user, the market is segmented into passenger car, light commercial vehicle (LCV), and medium commercial vehicle (MCV) and heavy commercial vehicle (HCV). In terms of geography, in 2020, APAC was the fastest growing region. Increasing disposable income of individuals, coupled with rising economy, has led to the surge in the sales of passenger cars and commercial vehicles in the past few years. The region has become a global manufacturing hub due to the presence of a robust automotive industry. Rise in awareness about vehicle emissions, maintenance costs, and lower operating, and increase in government initiatives across the region are propelling the adoption of electric vehicles, thereby driving the automotive lead acid battery market.
The COVID-19 outbreak has severely disrupted the supply chain and manufacturing of electronics equipment, including the hardware component of automotive lead acid batteries. The emergence of COVID-19 virus across the globe, followed by lockdown scenarios, has led the automotive industry experts to analyze that the industry would face at least a quarter of lag in automotive equipment supply chain. This disruption is expected to create tremors through till mid-2021. The electronics equipment and automotive industry is likely to pick up pace soon after the governments across the globe lift the various containment measures steadily in order to revive the economy. The production of the electronics equipment and automotive is anticipated to gain pace from 2022, which is further foreseen to positively influence the electronics equipment and automotive manufacturing, including hardware components of automotive lead acid batteries.