During the first six months of 2021, 118,000 electric vehicles (EVs) have been sold in India, as per Economic Times. Moreover, as per the Global EV Outlook 2021 report of the International Energy Agency (IEA), electric car sales witnessed a massive 40% rise in 2020 from 2019, even though, all over, car sales declined by 16%. This can be credited to several factors, most significantly, the rising awareness on reducing the air pollution levels. Every year, 4.2 million people succumb to outdoor air pollution, as per the World Health Organization (WHO), which has sped up efforts to curtail it.
Thus, with pollution mitigation efforts driving EV sales, P&S Intelligence expects the automotive lithium-ion battery market value to increase to $74.3 billion by 2024 from $24.2 billion in 2018, at a healthy 15.9% CAGR during 2019–2024. This is because in an EV, especially one that runs solely on electricity (battery electric vehicle [BEV]), the battery is the most-important and -expensive component, apart from the motor. The battery often decides the vehicle’s top speed and driving range, both of which are key factors considered by buyers.
Among the specific type of vehicles, passenger cars have been the largest users of lithium-ion (Li-ion) batteries. This is despite the previous (2020) edition of the IEA’s Global EV Outlook report recording a fleet of just 7.2 million electric cars around the world in 2019 compared to 350 million electric two-/three-wheelers.
This is because most of the electric scooters and motorcycles till now have been powered by sealed lead–acid (SLA) batteries, which have been in existence for a long time and are relatively cheaper than Li-ion variants.
Hence, it doesn’t come as a surprise that Asia-Pacific (APAC) will continue being the largest automotive lithium-ion battery market for many years to come. Led by China, the region is the largest producer and buyer of EVs, which naturally leads to a huge demand for associated components. Moreover, China and India rank as two of the most-polluted countries in the world, which is why the government support for EVs has been rather strong here. Further, in India, gasoline (petrol) and diesel continue to become dearer, which is expected to boost EV sales here further.
Therefore, with governments firmly behind the idea of a completely electric transport system, automotive Li-ion battery demand will continue to boom.