Automotive Lithium-ion batteries market is expected to grow at a CAGR of 28% during the forecast period of 2022 to 2030
The increasing demand for plug-in vehicles is the largest driver impacting the market. The pandemic caused by COVID-19 had a moderately negative effect on the market for lithium-ion batteries. As a result of the widespread COVID-19 epidemic, the supply of batteries and other components is being severely constrained. This is because the pandemic is causing serious disruptions in businesses and the global economy.
The Asia-Pacific region is responsible for the majority of the manufacturing of key components for batteries. The suspension of business in China and other nations in the Asia Pacific region has a significant negative impact on battery makers in the United States, Germany, and Australia.
It has also led to a reduction in production, which has caused a significant drop in the number of inputs available to businesses. The recovery is contingent on the aid provided by the government, as well as the level of corporate debt and the manner in which businesses and markets adjust to the reduced demand. Following the phase of recovery, it is anticipated that the market would continue to expand during the forecast period.
Stringent Environment Regulations Favoring Lithium-ion Battery Market
Favorable government laws are the primary driver that is driving growth in the Li-ion battery market for automotive applications. Together with vehicle manufacturers, governments from a number of different countries are working together to solve the growing concerns around environmental safety and the clean energy mix.
For instance, a number of countries, such as France and the United Kingdom, have announced that they will prohibit the sale of diesel vehicles in their respective countries. This move will help to drive sales of electric vehicles (EVs), which will help to drive down emissions. Additionally, governments are providing financial incentives and tax credits to encourage the adoption of electric vehicles, which will result in an increase in the demand for automotive lithium-ion batteries.
The European Commission (EC) has implemented severe fuel economy and emission requirements in order to address the problems that have been generated by the changing climatic and atmospheric conditions that have been brought about by fast urbanisation and the expanding population.
Increasing Demand for Electric Vehicles Remains as the Most Significant Driver
Even though the pandemic caused a decline of global automobile sales that resulted about 15% percent decline, the number of electric car registrations increased by 40% in 2020. The total number of electric vehicles sold across the globe was 3 million in 2020. Electric vehicles rely on power supplied by lithium-ion batteries as their primary source of propulsion. It was inevitable that the proliferation of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) would lead to an increase in the use of lithium-ion batteries, and this trend is forecast to continue in the foreseeable future.
The increasing popularity of electric cars (EVs) among consumers has contributed to a growth in the market for vehicles that consume less energy and produce less pollution. As a result of the numerous benefits associated with electric vehicles, such as a reduced need for the engine of the vehicle to be maintained, a reduction in the use of potentially hazardous oil waste, and a reduction in the pollution caused by fuel combustion engines, as well as the development of improved battery technology, the number of electric vehicles is continually rising.
Many people believe that the automobile industry and transportation systems will one day transition to electric vehicles; as a result, there will eventually be a greater need for lithium-ion batteries as their use becomes more widespread.
10,000-60,000 MAh Led the Market in 2021 and Likely to Remain Dominant
The market share that was held by the segment that ranged from 10,000 to 60,000 MAh in 2021.
It is anticipated that the segment of lithium-ion batteries with 10,000-60,000 MAh capacity would contribute the biggest share to the market for lithium-ion batteries during the forecast period.Some examples of these applications include electric vehicles, plug-in hybrid electric vehicles, e-motorcycles, golf cart vehicles, hybrid trucks, buses, automated guided vehicle and others.