Market Trends of Battery Systems For Electric Vehicle Industry
High Cost of Battery and Limited Driving Range Hindering the Market Growth
- Several factors, such as government subsidies and incentives, drive the global battery electric vehicles market. Governments in many countries have extended benefits in the form of financial incentives to the buyers of battery electric vehicles. The amount of these incentives usually depends on the size of the battery.
- For instance, the Sustainable Energy Authority of Ireland (SEAI) provides buyers of battery electric vehicles with grants of up to USD 5,400 and exempts them from vehicle registration tax. Despite the growth of the battery in the electric vehicles market, it is also curtailed by some serious challenges.
- The range and performance of the battery in electric vehicles are significant restraints for the market. The batteries are typically less powerful and have a limited range (60-100 miles per charge), and are considered suitable only for short-distance travel. The limited travel range of batteries of electric vehicles raises concerns among consumers that their vehicles may run out of charge/power before reaching their destination.
- Longer charging duration is another major challenge for the market. The lack of availability of supercharging stations adds to the woes associated with the use of batteries in an electric vehicle. The high cost of the battery in the electric vehicle also poses a threat to the growth of the battery market in particular and battery electric vehicles in general. For instance, the price per usable kilowatt-hour of a lithium-ion battery ranges from USD 500 to USD 650, and thus, makes up a large proportion of the vehicle's cost.
Asia-Pacific Market Growing at a Faster Pace
The Asia-Pacific region is indeed experiencing rapid growth in the battery systems for electric vehicles market. Several factors contribute to the region's increasing prominence in this sector. Countries like China, Japan, and South Korea have witnessed a substantial increase in electric vehicle sales. These nations are actively promoting the adoption of electric vehicles through supportive policies, subsidies, and infrastructure development. The rising demand for electric vehicles in the Asia-Pacific region drives the need for advanced battery systems.
- For instance, In May 2023, Chinese automaker JAC Group and tech company HiNa Battery teamed up to create an electric car powered by a sodium-ion battery.
Additionally, Asia-Pacific has emerged as a major manufacturing hub for electric vehicles and their components. The region boasts a robust supply chain and a skilled workforce, making it an attractive destination for battery system manufacturers. This localized manufacturing reduces production costs and allows for efficient distribution. The Asia-Pacific region is home to several innovative battery technology companies and research institutes. These entities are dedicated to developing advanced battery systems with higher energy density, improved safety, and faster charging capabilities. The emphasis on research and development fosters innovation and positions the region at the forefront of battery system advancements.
Moreover, governments in the Asia-Pacific region have recognized the potential of electric vehicles and battery systems in achieving sustainable transportation goals. They provide financial incentives, subsidies, and grants to promote domestic battery manufacturing and research. These initiatives accelerate the growth of the battery systems market in the region. The Asia-Pacific region is investing in the development of charging infrastructure to support the growing number of electric vehicles on the roads. Governments, in collaboration with private players, are establishing charging stations and implementing smart grid solutions to address range anxiety and enhance the overall EV experience. This infrastructure development further propels the demand for battery systems.
Considering these factors, the Asia-Pacific region is expected to witness a faster pace of growth in the battery systems for electric vehicles market compared to other regions. It offers significant opportunities for battery manufacturers, suppliers, and related stakeholders to capitalize on the burgeoning electric vehicle market.
