Electric Vehicle Battery Market Share, Size, Forecast
by IntellinetSystems Jan 22, 2024
In the early 1800s, horses and buggies were the most used modes of transport until the development of the first crude electric vehicle around 1832 by Robert Anderson. This ignited the electric vehicle market and led to an increase in the popularity of electric vehicles. But, it was short-lived.
After the introduction of the Ford Model T, gas-powered vehicles became mainstream modes of transport.
By the 1970s, the electric vehicle market had gained some popularity as fossil fuels became expensive and also were major contributors to pollution.
In 2006, a Silicon Valley startup named Tesla announced that they would produce luxury electric sports cars with a range of 200+ miles. And the rest is history.
With the advent of the popularity of electric cars, the electric vehicle battery market has experienced multiple disruptions.
Here, in this article, we will discuss the electric vehicle battery market share, its current size, and where the forecast takes us.
About The Key Segments of the Electric Vehicle Battery Industry
By Battery Type
Nickel-Metal Hydride Battery
The Lithium-Ion battery type leads the market segment as it tends to have a longer life span, high energy density, and a longer life span compared to other battery types.
They enable electric vehicles to have a longer drive range as they provide superior performance and better efficiency. In addition to this, they can also charge faster in comparison to their counterparts.
This makes Lithium-Ion battery the most preferred battery type for an electric vehicle. There is research going on to improve their performance, enhance their safety, and increase their cost-effectiveness.
Nickel-Metal Hydride Battery
Nickel-metal hydride batteries were the preferred battery types previously used in the earlier generation of hybrid electric vehicles and electric vehicle models. Compared to Lithium-ion batteries, they are cheaper and have a moderate density of energy in them.
As the industry started shifting towards Lithium-ion batteries, the industry stopped using these Nickel-metal hydride batteries.
Lead-acid batteries have most commonly been used in conventional internal combustion engines. When we talk about electric vehicles, they have typically been used in low-speed electric vehicles like, rickshaws.
This is because of the low-cost factor compared to other battery types or other technologies. As these lead-acid batteries have limited performance in terms of density of energy, weight, and cycle life, they have a small market share in the Indian subcontinent compared to other battery technologies.
This small share is expected to become lower and diminish slowly as the electric vehicle battery market evolves further.
Hybrid Electric Vehicles have the Largest Market Share
BEV (Battery Electric Vehicles) are vehicles that are fully electric and utilize the electric power stored in the vehicle’s battery for propulsion.
As these vehicles do not have an internal combustion engine, they do not produce any emissions. Due to this factor, these vehicles have started gaining market traction. Long drive range, fast charging, and compatibility with a range of vehicles from small cars to SUVs are some of the benefits that BEVs provide.
Such is the impact that their market share is increasing by the day. They are also because of favorable government policies and the demand for clean and sustainable options for transportation.
Current Electric Vehicle Battery Market Size
Recently, there have been multiple reports published regarding electric vehicles with different predictions and forecasts. But before delving into those details, let us look at the demography of the electric vehicle battery market.
Northern India has been emerging as a significant market for electric vehicles as it has a high-density population with enhanced urbanization. In addition to this factor, the northern part of the country also faces rising concerns about environmental pollution.
If we consider Delhi, there are major environmental concerns that the city faces today. To tackle these challenges, there have been establishments of various charging infrastructures and the demand for electric vehicles has increased.
In the Central and West regions of India, there has been a prominent adoption of electric vehicles. Cities like Mumbai and Pune have some of the highest electric vehicle adoption rates. This is aided by favorable government initiatives and the establishment of charging infrastructure.
The state of Maharashtra also houses some of the key players in the electric vehicle industry and also has a favorable ecosystem for startups in the country.
Tamil Nadu is another significant player in the electric vehicle market. With the help of strong government support and manufacturing facilities for electric vehicles, it is a key player today. The southern part of the country has a wider acceptance of electric vehicles and increasing infrastructure for charging.
In comparison to the rest of India, the Eastern part of the country is still in the early stages of adoption of electric vehicles. There are many government schemes and incentives to promote the adoption of electric vehicles.
Cities like Kolkata have been witnessing an increased number of electric vehicles on the road. The government is also making efforts to have favorable charging infrastructure to improve the adoption of two-wheelers and rickshaws.
The Current Market Share and Forecast of Electric Vehicles
The Indian EV battery market will grow from $16.77 billion in 2023 to $27.70 billion by 2028, with a compound annual growth rate (CAGR) of 10.56% during the period spanning 2023 to 2028, according to GameChanger Law Advisors and Speciale Invest.
Moreover, the report points to huge potential for India in manufacturing EV battery packs as the country is heavily dependent on importing 60–65 percent of the total component requirement for battery packs.
The Indian EV market was valued at $3.21 billion in 2022 and is expected to grow to $113.99 billion by 2029 at a compound annual growth rate of 66.52 percent.
In 2022, 25 percent of EVs sold in India were purchased by fleet operators, including taxis.
In recent years, EV sales in India have significantly increased because they are a cleaner and more efficient alternative to gasoline-powered vehicles. With the growth of sales of EVs in India, the government has set a target to achieve 30 percent electrification of India’s vehicle fleet by 2030.
Increasing environmental concerns have given rise to the adoption of electric vehicles throughout the country. Overall, India is currently a major player in the Asian continent – both in terms of manufacturing and use of electric vehicles.
This is only going to go up from here with the help of government schemes that are benefitting the adoption and manufacturing of electric vehicles.
Intellinet Systems also has been a hand-in-hand partner for automotive manufacturers and has helped them grow by making operations efficient and reducing costs by aftermarket SaaS-based products like Warranty Management Software and others. If you are an EV manufacturer, let us discuss how we can collaborate and work towards a sustainable and green India!