Market Trends of UPS Battery Industry
Lithium-Ion Batteries Segment is Expected to Witness a Significant Growth
- Businesses increasingly opt for lithium-ion (Li-ion) batteries in their UPS solutions. Due to their advanced technology, Li-ion batteries offer a lifespan that's twice as long as traditional batteries, along with reduced maintenance costs and quicker installation. Moreover, smart UPS solutions can significantly reduce the total cost of ownership (TCO), making them appealing to companies looking to upgrade their UPS systems. Li-ion batteries can effectively last up to 10 years, double the lifespan of lead-acid (VRLA) batteries, which also drives their adoption.
- Advancements in manufacturing, economies of scale, and increased production capacity have steadily driven down lithium-ion battery costs. This price drop has made lithium-ion UPS systems competitive with traditional lead-acid systems, fueling demand across multiple sectors. In May 2024, Vertiv, a leader in digital infrastructure and continuity solutions, announced an expansion of its Vertiv Liebert GXT5 Lithium-Ion double-conversion uninterruptible power supply (UPS) system. The new models in the Liebert GXT5 Lithium-Ion series will feature Global Voltage (GV) options, ranging from 5kVA to 10kVA, to meet varied application needs.
- The rollout of 5G networks and the expansion of telecommunications infrastructure necessitate reliable and efficient power solutions, driving up the demand for lithium-ion UPS batteries. In July 2024, the Indian government announced measures to strengthen the country's 5G ecosystem and allocated resources to boost research and development in the upcoming 6G sector.
- Driven by the rising adoption and diverse applications of Li-ion batteries across multiple industries, global production capacity for lithium-ion batteries is increasing. According to estimates by whitehouse.gov, the total production of Li-Ion battery factories is anticipated to surge from approximately 290 GWh in 2018 to an estimated 2,000 GWh by 2028.
- Furthermore, Lithium-ion batteries are more eco-friendly than lead-acid batteries, which contain harmful lead and acid. With a rising emphasis on sustainability and minimizing carbon footprints, businesses increasingly turn to greener technologies, such as lithium-ion UPS systems. As environmental regulations tighten, especially concerning hazardous material disposal, the shift to lithium-ion batteries is about compliance and minimizing environmental impact.
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North America is Expected to Hold a Significant Market Share
- North America's economic, technological, and infrastructural dynamics significantly drive the demand for UPS batteries. The surge in big data analytics, IoT (Internet of Things), and cloud computing has spurred a boom in data centre construction across the continent. Since data centres require uninterrupted power to prevent costly downtimes, UPS systems have become indispensable. As edge computing and 5G networks gain traction, the heightened demand for data storage and processing underscores the reliance on dependable UPS batteries.
- In August 2024, Blackstone's portfolio includes data centres valued at a staggering USD 55 billion, encompassing operational and under-construction facilities. The firm's ambitious pipeline development surpasses USD 70 billion. Over the next five years, Blackstone is set to invest around USD 1 trillion in the U.S. alone, focusing on establishing and supporting new data centres. Not stopping there, they project an equal USD 1 trillion capital expenditure outside the U.S.
- North America's thriving e-commerce sector hinges on seamless operations, from order processing to warehousing. UPS systems play a significant role in safeguarding these operations from power disruptions, amplifying the demand for reliable UPS battery solutions. As retail businesses increasingly embrace digital tools, from point-of-sale systems to online platforms, the urgency for UPS battery systems to counter power disruptions has surged.
- Furthermore, the increasing trend of smart homes in North America, characterized by interconnected devices and systems, has heightened the demand for UPS battery systems. These systems ensure power continuity and shield sensitive electronics from fluctuations. As households increasingly invest in high-end consumer electronics, the demand for battery backup solutions has intensified, ensuring these devices remain operational during outages.
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