The study undertaken by Astute Analytica foresees a tremendous growth in revenue of Global Battery as a service Market from US$ 142.7 Mn in 2021 to US$ 1,097.6 Mn by the end of 2030. The market is registering a CAGR of 25.9% over the forecast period 2022-2030. The market is majorly driven by factors such as high battery cost and growing sales of electric vehicle coupled with favorable government initiatives.
Growing fuel prices, rising pollution levels and climate concerns are driving the growth of electronic vehicles. But the concern about their high cost is also weighing heavy on everyone’s mind. So, to address this concern, the battery-as-a-service model was born. Under this model, customers can lease batteries from the OEMs or battery suppliers as a separate component from cars. In addition, the customers can also take out the discharged battery and exchange it with a fully charged one. Thus, the Battery-as-a-service model helps customers save money at the time of purchase.
The growing impetus of the market is attributed to factors such as high battery cost and growing sales of electric vehicle coupled with favorable government initiatives. Electric vehicles (EVs) have lower operating costs than conventional automobiles, but their purchase price is higher. The major share of this cost is due to the high price of batteries used in these vehicles. Through battery as a service model customers can lease batteries from the OEMs or battery suppliers as a separate component from cars.
In addition, the customers can also take out the discharged battery and exchange it with a fully charged one. Thus, the Battery-as-a-service model helps customers save money at the time of purchase. This new service provides battery swapping options that offer a solution to address shorter range issues of an EV. Further, governments of several countries promote the adoption of electric vehicles, which in turn is expected to propel market growth.
Furthermore, countries like the U.S., France, Germany, and China have implemented stringent government laws and regulations regarding vehicular emission, under which it is mandatory for the automobile manufacturers to use advanced technologies that help to combat high-emission levels emitted by vehicles.
Government have promoted the growth in this segment by offering incentives, imposing tax rebates, and preferential policies, among others. For instance, in India, state of Maharashtra declared its EV policy in 2021. This policy provides incentives of US$ 65.20 (INR 5,000) per kilowatt-hour of battery capacity to all types of electric vehicles buyers. Moreover, several European governments have made long term pledges with compliance targets within a specific timeframe such as ZEV (Zero-Emission Vehicles) mandates and the phase out of internal combustion engine vehicle sales.
The lack of uniformity in battery design and compatibility across the board is one of the most critical hurdles in battery-as-a-service business. Further, the damage to the battery due to handling coupled with lack of standardization is hindering market growth.
The US dominates the North America Battery as a service Market in 2021
The US is the highest shareholder country in North America Battery as a service Market in 2021 as the electric car battery industry is benefiting from increased government assistance and the advancement of sophisticated battery technology. This factor, in turn, is likely to supplement the growth of BaaS system in the country. Further, the US also registers the highest CAGR for the projection period. Based on product type, the stationary segment holds the highest share in the North America battery as a service market in 2021.
Western Europe dominates the Europe Battery as a service Market in 2021
Western Europe holds the major share of Europe battery as a service market in 2021 due to the significant penetration of electric vehicles in countries like Norway, Sweden, and the Netherlands. In terms of service type, subscription holds the highest market share in 2021. Further, Russia is the highest shareholder country in the region in 2021.
Asia Pacific leads the Global Battery as a service Market in 2021
Asia Pacific is the highest shareholder region in the Global Battery as a service Market in 2021 and will continue its dominance over the forecast period. China, being the world’s top EV producer and user, has a stranglehold on the region’s EV market. Furthermore, Japan and South Korea have both seen rapid growth in their electric vehicle market as their governments have aided the increase of EV demand by providing EV charging stations, establishing pollution standards, and establishing deadlines for switching from ICE vehicles to full or hybrid EVs, among other things. This is expected to propel market growth.
Passenger cars dominate the Middle East & Africa Battery as a service Market
Passenger cars hold the highest share in the Middle East & Africa Battery as a Service Market owing to the increased attention of governments to promote the usage of electric vehicles. Further, the high per capita income creates a significant market for luxury electric vehicles. Countries such as Saudi Arabia, South Africa, and UAE holds a significant market share in 2021.
Brazil holds the highest CAGR in the South America Battery as a service Market
Brazil is the highest shareholder country in South America Battery as a Service Market in 2021 and registers the highest CAGR over the projection period. This is due to a rise in demand from various end-user industries such as automotive, energy, industry, and transportation & logistics. Based on product type, the stationary segment holds the highest market share in 2021.
The key players in the Global Battery as a service Market are NIO, Epiroc, Global Technology Systems, Inc., Contemporary Amperex Technology Co., Harding Energy, Inc., and Octillion among others.