Automotive Battery Market

Increased Demand for Lithium-Ion Battery is driving the market growth

Market CAGR for lithium-ion batteries is expected to grow fastest during the forecast period. A lithium-ion battery is equipped for applications that demand high-energy density solutions, such as hybrid and electric automobiles. Additionally, to increase vehicle economies, manufacturers are continuously focusing on reducing the price of the battery, propelling the market growth globally. 

For instance, in September 2019, Maruti Suzuki partnered with Toshiba and Denso to set up the world's largest automotive lithium-ion battery manufacturing unit in Gujrat (India). Numerous governments are providing incentives/ tax credits to promote the use of electric vehicles, which is expected to increase the demand for automotive lithium-ion batteries. For instance, the IRS (Internal Revenue Service) tax credit is USD 2,500-7,500 per new electric vehicle purchased in the United States. Similarly, California provides USD 2,500 rebates, Delaware provides USD 1,000 rebates, and Colorado provides USD 5,000 tax credits on purchasing electric vehicles.

Additionally, Leading automotive Original Equipment Manufacturers (OEMs) are collaborating with battery OEMs to strengthen their operation to develop high-performance EV batteries that will reduce charging time which is one of the vital factors driving the market growth. Moreover, manufacturers are working on developing batteries with a higher energy density that extends battery range and using nanowires that reduce charging time to meet rapidly growing market revenue.

The increasing adoption of electric vehicles (EVs) is a primary driver of the Global Automotive Battery Market Industry. As consumers become more environmentally conscious, the shift towards EVs accelerates. In 2024, the market is valued at 73.0 USD Billion, reflecting the rising demand for sustainable transportation solutions. Governments worldwide are implementing stricter emissions regulations, further propelling the need for advanced battery technologies. For instance, countries like Norway and the Netherlands are leading in EV adoption, with significant market shares. This trend is expected to continue, as the Global Automotive Battery Market Industry is projected to reach 142.1 USD Billion by 2035, indicating a robust growth trajectory.

By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American automotive battery market will dominate this market owing to rising government efforts to reduce carbon emissions by developing eco-friendly products, boosting the market growth in this Region.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure2: Automotive Battery Market Share By Region 2022 (%)

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Europe's automotive battery market accounts for the second-largest market share due to increasing end-user demand for zero-emission hybrid and electric vehicles. Further, the German automotive battery market held the largest market share, and the UK automotive battery market was the fastest-growing market in the European Region.

The Asia-Pacific automotive battery market is expected to grow at the fastest CAGR from 2023 to 2030. This is because the high sales of commercial, passenger, and motorcycles will likely promote industry expansion. Ongoing product developments by various companies to manufacture cost-efficient and high-performance vehicles are projected to contribute to the growth of the regional market. Moreover, China’s automotive Battery market held the largest market share, and the Indian automotive battery market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the automotive battery market grow even more. Market participants are also undertaking various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The automotive battery industry must offer cost-effective items to expand and survive in a more competitive and rising market climate.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the global car battery industry to benefit clients and increase the market sector. In recent years, the automotive battery market has offered some of the most significant advantages to the automobile sector. Major automotive battery market players include Exide, GS Yuasa, Panasonic, LG Chem, A123 Systems, East Penn Manufacturing Company, Robert Bosch Gm BH, EnerSys, and others, are attempting to increase market demand by investing in research and development operations.

Stellantis N.V. is a multinational automotive manufacturing corporation formed in 2021 based on a 50–50 cross-border merger between the Italian-American conglomerate Fiat Chrysler Automobiles and the French PSA Group. The company is headquartered in Amsterdam. Their innovative products and services: include Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, Vauxhall, and mobility brands Free2move and Leasys. Stellantis and Samsung announced investing USD 2.5 Billion to build a battery manufacturing facility in Indiana. The factory is likely to start production by the year 2025.

Toyota Motor Corporation is a global automotive industry leader manufacturing vehicles in 27 countries or regions and marketing the company’s products in over 170 countries and regions. Founded in 1937 and headquartered in Toyota City, Japan, Toyota Motor Corporation employs nearly 350,000 people globally. 

Toyota Motor Corporation is a Japanese multinational automotive manufacturer headquartered in Toyota City, Aichi, Japan. It was founded by Kiichiro Toyoda and incorporated on August 28, 1937. Toyota is one of the largest automobile manufacturers in the world, producing about 10 million vehicles per year. Toyota announced an investment of USD 1.3 Billion to establish a battery manufacturing plant in North Carolina. The plant is likely to have the capacity to produce Lithium-Ion batteries for 800,000 vehicles and is expected to commence production by 2025.