Market Trends of Europe Battery Systems for Electric Vehicles Industry
This section covers the major market trends shaping the Europe EV Battery Systems Market according to our research experts:
Demand for Electric Vehicles Vehicles will Drive Demand in the Region
The electric vehicle market in Europe is expanding rapidly in sales as consumers are seeking environmentally friendly vehicles which offer very low running costs. For instance, Europe saw 2.27 million electric vehicle sales in 2021 up from 1.36 million in 2020, registering a growth of 66.91% on a Year on Year basis. This potential shift in the consumer preferences driven by stringent automotive emission norms, government incentives to promote electromobility, and very high levels of environmental consciousness amongst vehicle buyers in markets like Scandinavian countries, Germany, the Netherlands, France, and the U.K. have been responsible for this phenomenal rise in the popularity of electric vehicles.
Li-ion battery likely to be dominated the market during the forecast period. Li-ion batteries are more eco-friendly, last longer and offer good driving range for EVs than lead acid batteries. For instance, 90% of battery electric vehicles sold in Europe in 2021 were powered by Li-ion batteries. Thus new innovations in the elctromobilty, adoption of stringent automotive emission norms and fuel efficiency standards, government incentives for the sales of electric vehicles and setting up of many new gigafactories in the region the market for electric vehicle battery systems is expected to grow over the forecast period. For instance,
- In September 2022, Chinese battery manufacturer SVOLT announced to setup its second battery gigafctory in Europe at Brandenburg, Germany with an annual capacity of 16 GWh. The gigafatory is expected to be operational by early 2025.
- In March 2022, European Commission approved an aid of USD 230 million for the construction of an electric vehicle battery plant of SK Innovation in Kozep-Duantul region in Hungary. The plant will have an annual capacity of 30 GWh and SK innovation will invest USD 1.6 billion in the plant.
Germany is Expected to Dominate the Market During the Forecast Period
Germany segment of the market studied expected to hold significant share in the market during the forecast period. Various German automotive companies have made huge investments in electric vehicle technology, which includes batteries and related components which is expected to drive the country's EV battery management system market in the forecast period.
Germany and Sweden are also major markets for elctric vehicle battery systems due to strong government incentives provided for purchasing electric vehicles, major investments into battery manufacturing and presence of startups entering the electric vehicle battery systems market. Thus, with companies coming up with new investments in this segment, the market for
battery systems for electric vehicles is expected to grow over the forecast period for the market. For instance,
- In May 2022, Norwegian startup Morrow Batteries raised 100 million euros from ABB and Siemens to start local production of electric vehicle batteries in Norway by next year.
- In February 2022, Freyr Battery announced to setup a manufacturing plant for electric batteries with an annual output of 25 GWh which will be operational in 2023.
Although Germany was a slow bloomer in its pro-electric plans, initially, it is introducing strategies to match the stricter emission standards. Electric mobility plays a central role in the federal government's climate protection program, which aims to achieve its 2030 climate targets mainly through transportation innovation. The country is introducing incentives and investments, like purchase grant, ownership tax, and company car tax, to promote clean cars. Such developments and trends in the market anticipated to enhance overall growth of German market during the forecast period.
