LEAD ACID BATTERY MARKET ANALYSIS

Market Size and Trends

Lead acid battery market is estimated to be valued at USD 50.32 Bn in 2024 and is expected to reach USD 72.13 Bn by 2031, growing at a compound annual growth rate (CAGR) of  5.3% from 2024 to 2031.

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The lead acid battery market is expected to witness moderate growth over the forecast period. Though lead acid batteries have significant applications in automotive sector especially for automobiles in developing countries, increasing focus towards developing low-maintenance batteries such as lithium-ion batteries is expected to hamper the growth of this market. Replacement of existing lead acid batteries will continue to boost its demand. However, stricter environment regulations regarding usage of lead will be a major challenge. Growth of electric vehicles provides opportunities for this market, as these vehicles require bulk energy storage solutions largely served by lead acid batteries presently. Developments targeting reduced usage of lead in batteries can provide long-term opportunities for market participants.

Increasing hybrid and electric vehicle adoption

Increasing demand for hybrid and electric vehicles across the globe has been one of the key drivers of growth for lead acid batteries. Unlike lithium-ion batteries used in premium EVs, lead acid batteries are more cost effective and their technology is more mature. As a result, these are increasingly being used as starting, lighting and ignition batteries in hybrid vehicles which have both an internal combustion engine as well as an electric motor. With automakers aggressively expanding their EV/hybrid lineups to comply with stricter emission regulations, the lead acid battery market is expected to witness growth. Recent breakthroughs in material science and manufacturing technologies have also enabled lead acid batteries to last longer which widens their appeal for automotive applications.

For instance, in July 2020, EnerSys a stored energy systems and technology provider for industrial applications, partnered with Blink Charging Company, a leading electric vehicle (EV) charging equipment provider, to develop high-power wireless DC fast charging systems for integrated battery storage in transportation applications.

Market Concentration and Competitive Landscape

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The prominence of renewable sources of energy such as solar and wind has been rising across both developed and developing nations. For optimum utilization of power generated from intermittent renewable sources, large-scale energy storage is becoming indispensable. While technologies such as pumped hydro and lithium-ion batteries are also being adopted, lead acid batteries still offer a viable and cost-effective option for hundreds of megawatts of energy storage applications worldwide. Their ability to provide deep discharge cycles at an affordable upfront cost makes them suited for applications like rural electrification, microgrids and load balancing in power distribution systems. Major renewable energy product manufacturers are also integrating lead acid batteries into their portfolio to address the storage requirements of their solar panel and wind turbine offerings. This is expected to significantly contribute to the demand for lead acid batteries in the coming years.

For instance, in May 2023, C&D Technologies a technology company that produces and markets systems for the power conversion and storage of electrical power introduced the Pure Lead Max VRLA battery designed for data centres. This innovation, backed by an industry-leading eight-year warranty, features proprietary pure-lead technology, a catalyst design for extended life, and sustainability benefits through recycled materials. The battery promises up to 38% lower maintenance costs and a reduced footprint, emphasizing longevity and performance.

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Global lead acid battery market faces several challenges. Increased environmental regulations around the use and disposal of lead pose a threat as lead is toxic. Current technologies also limit energy density as compared to newer battery chemistries. Rising demand for EVs and renewable energy is redirecting investment away from this legacy technology. High cost of recycling spent batteries also hampers profitability.

For instance, in May 2021, Amara Raja Batteries, a major lead-acid battery manufacturer in India, recommenced manufacturing after receiving closure orders in April 2021 due to environmental regulation violations from government of India

Market Opportunities: Pervasive Use in Automotive Applications

Lead acid batteries continue to be widely used for automotive starting, lighting and ignition due to their low cost and reliability. These are universally compatible with chargers and devices. Their use in off-grid renewable energy and UPS systems helps meet rising energy demands worldwide. Telecom tower installations and industrial equipment applications keep revenues stable. New sealed and improved gel battery technologies boost performance.

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In terms of product type, SLI lead acid battery segment is estimated to contribute the highest share of 47.3% of the market in 2024, owing to its reliability and suitability for a diverse range of applications. SLI batteries are predominantly used to start combustion engines in vehicles and are chosen by automakers because of their high cranking power even in adverse conditions. The robust construction of SLI batteries allows them to withstand rigorous daily start-stop cycles and the vibrations encountered in vehicle engines. Their simple and proven technology also contributes to their high reliability compared to other battery types. Furthermore, SLI batteries are suited for engines of all sizes, from compact passenger cars to heavy trucks and off-road vehicles. Their wide operating temperature range also makes them ideal for both temperate and tropical driving conditions. Overall, the dependability of SLI batteries in starting engines efficiently has cemented their prominent role in the global mobility industry.

Insights, By Construction Method- Industrial Demand from Critical Equipment Drives Flooded Lead Acid Battery Uptake

In terms of construction method, flooded lead acid battery segment is estimated to contribute the highest share of 57.82% in the market in 2024, owing to strong demand from industrial users for critical equipment backup. Flooded batteries are the technology of choice for stationary applications like emergency lighting, telecommunications towers, security systems, and backup power for IT infrastructure. Their advantages in such uses include the ability to deliver high surge currents and deep cycle discharge capabilities. Additionally, flooded batteries demonstrate excellent charge acceptance allowing them extend equipment uptime during power outages. Their reliability and relatively lower cost compared to other technologies also factor in their widespread industrial and commercial use. Key end-users like manufacturing plants, power utilities, and data centers continue to rely on flooded batteries for uninterrupted power supply to equipment crucial for their operations.

Insights, By End-use- Motive Applications Drive Growth of Motive Lead Acid Battery Segment

In terms of End-use, Industrial segment is estimated to contribute the highest share of 49.62% in the market in 2024, due to growing demand from electric forklifts and other warehouse vehicles. Motive batteries are uniquely engineered to withstand the rigorous deep discharge and frequent recharging from motive applications like electric forklifts, airport ground support vehicles, automated guided vehicles, and floor scrubbers. Their deep cycle discharge capability provides sufficient power for extended vehicle run times between charges. Additionally, their vibration resistance and charge acceptance allow for opportunity charging during shifts. Leading logistics and e-commerce companies extensively utilize electric forklifts in their warehouses. Rising investments in automation and the growing warehousing industry is propelling motive battery adoption. Battery manufacturers are focusing on extending battery life through advanced materials to capitalize on the opportunities in the growing motive battery segment.

Regional Insights

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The Asia Pacific region is estimated to emerge as the highest shareholding regional market with 43.78% market share in 2024 in lead acid battery market globally. With developing countries like India and China experiencing increased automobile ownership and industrialization, the demand for e cost-effective and reliable energy storage solutions continues to surge. Both retail as well as commercial sectors contribute to the massive and expanding consumer base. The abundance of cheap labor and raw materials in countries like China have benefitted the regional producers as they now dominate the global exports while simultaneously serving the burgeoning domestic needs. This has resulted in the region becoming a price leader with competitive export offerings. Several local small-scale manufacturers engaged in assembling, recycling and component supplying are further boosting the regional production landscape.

North America is estimated to be the Fastest growing regional market for lead acid batteries with CAGR of 7.23% over the estimated period 2024-2031. The region is home to several manufacturing giants and major automotive companies that are driving the constant demand for lead acid batteries. With the USA and Canada having well-established vehicle fleet and growing electrification projects, the replacement demand remains steady. The presence of battery recycling infrastructure further helps in augmenting raw material availability and competitiveness of the regional industry. Original equipment manufacturers find it advantageous to establish production facilities within the region to cater to the nearby customers.

Market Report Scope

Key Developments

• In October 2022, BAE USA'sv a defence, aerospace and security solutions provider, their stationary lead-acid battery energy storage system secured certification for the third edition of ANSI/CAN/UL 1973. The certification, conducted by UL Solutions, a U.S.-based testing and certification company, attests to the ESS's capabilities.
• Amara Raja Batteries (ARBL) revealed plans in July 2022 to expand its lead-acid business beyond India. The focus of this expansion lies in Africa, the Middle East, and South-East Asia, aiming to broaden geographical reach.
• In December 2021, GS Yuasa Corporation a company v specializing in the development and production of lead acid and lithium-ion batteries, announced plans to double the production capacity of its motorcycle lead-acid batteries through equity holder TGY. This strategic move aims to increase market share in India and diversify the range of battery models.
• In January 2021, Batek Makina Ltd., a Turkey-based battery equipment manufacturer, acquired Bertola Snc, a Italy-based company specializing in battery charging equipment. This acquisition aims to expand Batek Makina Ltd.'s offerings and diversify its business into the battery charging equipment industry.

*Definition: The lead acid battery market includes all revenues from companies manufacturing lead-acid batteries that use lead oxide and lead metal electrodes to store and release energy electrochemically. This market includes sales of starting, lighting and ignition batteries for automobiles as well as industrial lead acid batteries used in applications like forklifts, electric utility equipment, electric vehicles, and uninterrupted power supply systems. The lead acid battery market serves industries such as transportation, utilities, telecommunication, and manufacturing.

Market Segmentation

• Product Type Insights (Revenue, USD Bn, 2019 - 2031)
  • SLI Lead Acid Battery
  • Stationary Lead Acid Battery
  • Motive Lead Acid Battery
• Construction Method Insights (Revenue, USD Bn, 2019 - 2031)
  • Flooded Lead Acid Battery
  • VRLA Lead Acid Battery
• End-use Insights (Revenue, USD Bn, 2019 - 2031)
  • Industrial
  • Commercial
  • Residential
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • ATLASBX Co. Ltd.
  • B. B. Battery
  • C&D Technologies, Inc.
  • Camel Group Co., Ltd.
  • Chaowei Power Holdings Limited.
  • Clarios
  • Coslight Technology International Group Co. Ltd.
  • Crown Battery Corporation
  • East Penn Manufacturing Co.
  • Enersys
  • Exide Industries Ltd.
  • Furukawa Electric Co., Ltd.
  • GS Yuasa Corporation
  • Hitachi Chemical Company, Ltd.
  • Hoppecke Batterien GmbH & Co. KG.
  • Johnson Controls
  • Leoch International Technology Ltd.
  • Narada Power Source Co. Ltd.
  • Shandong Sacred Sun Power Sources Co. Ltd.
  • SiteTel Sweden AB (NorthStar)
  • Yokohama Batteries Sdn. Bhd.
  • Zhangzhou Huawei Power Supply Technology Co., Ltd.