Increasing Sale of Electric Vehicles Driving Lead–Acid Battery Market Growth
In 2018, 5 million electric vehicles were sold across the world, growing by 63% from the previous year, as per the International Energy Agency. The key reasons behind their adoption are the air pollution caused by the burning of fossil fuels in conventional vehicles and increasing prices of crude oil. Be it a battery electric vehicle (BEV), hybrid electric vehicle (HEV), or plug-in hybrid electric vehicle (PHEV), all of them use a battery for motive power, instead of an internal combustion engine.
Thus, with a rise in EV sales, the lead–acid battery market would grow to $70.7 billion by 2023 from $56.9 billion in 2017, at a 3.7% CAGR during 2018–2023. Such batteries use lead-peroxide and sponge-lead plates, which are immersed in a sulfuric acid solution, to change the chemical energy into electricity. Valve-regulated (VRLA) and flooded are the two constructions in which such products are available. Of these, the flooded variants saw higher adoption during 2013–2017 owing to their cost-effectiveness.
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Motive, starting, lighting, and ignition (SLI), and standby are the three types of such batteries, if their actual purpose is considered. Among these, these batteries were the most widely installed for SLI purposes, during the historical period. Such devices are durable and cost effective, require low maintenance, and witness a high demand from the automotive sector. EVs have gained overwhelming support from national and provincial/state governments and international organizations, as they help reduce air pollution. Under the Electric Vehicles Initiative, China, Canada, France, Finland, India, Germany, Mexico, Japan, Norway, the Netherlands, the U.K., Sweden, and the U.S. have set targets to increase EV adoption.
Further, automakers such as Nissan Motor Corporation, Ford Motor Company, and Tesla Inc. are developing new EV models with higher range and speed, which is expected to attract consumers and drive the market for lead–acid batteries. Another reason for market growth is the rise in the demand for uninterruptible power supply (UPS). Several developing countries, including Mexico, India, South Korea, Indonesia, Vietnam, and Thailand, are witnessing rapid urbanization and industrialization. These processes result in the increasing demand for infrastructure for residential, commercial, and several other purposes, where UPSs are installed for stable power supply.
Industries such as manufacturing, research and education, healthcare, oil and gas, and chemicals, also use UPSs. With the growing demand for electricity, the pressure on power plants and the grid is increasing. Additionally, in most developing countries and few developed countries, the power infrastructure is aging, and both of these factors often result in inconsistent power supply. This becomes a grave problem for oil and gas installations, railways and airways, hospitals, and data centers, which is automatically pushing the sale of backup systems, and, in turn, lead–acid batteries.
Another sector where uninterrupted power supply is imperative is telecom, especially in cell phone towers. Currently, diesel generators are used at such places, but as they also cause air pollution, they are being replaced by cleaner power sources. The India Brand Equity Foundation (IBEF) claims that the country’s mobile industry would value $217.37 billion (INR 14 trillion) by 2020. With the increase in smartphone sales, telecom towers are increasing in number, which is pushing the demand for lead–acid batteries for backup power systems. It is due to such factors that Asia-Pacific would witness the fastest lead–acid battery market growth during the forecast period.
Hence, the demand for such power sources would continue surging with the increase in EV and smartphone adoption.