The world is undergoing a transformation in the way that it utilizes energy. Concerns for climate change has pushed many corporations to becoming more conscious of their carbon footprint as governments incentivize green technologies in businesses. The issue has brought global leaders together, and committed to tackling climate change formally through the Paris Agreement to deal with greenhouse gas emissions mitigation, adaption, and finance. As a result, it has catalyzed developments in energy sector particularly with the view to sourcing, producing, and using energy in a more efficient and sustainable manner. In particular, it has led to developments in the battery industry as companies chase goals of achieving greater performance through technology. The question is, how fast is this change occurring?

According to Grand View Research, the global automotive battery market size is estimated to reach $95.57 bn by 2025 with a forecasted CAGR of 7.9%[9]. The rising number of hybrid and electric vehicles is currently transforming the automotive battery industry landscape. Lead acid batteries are traditionally used for most automotive applications as they are cheaper and have low-technology requirements compared to lithium-ion batteries. However, lithium-ion batteries are becoming more popular due to them being lighter, more efficient, having a longer battery life, safer, and more eco-friendly than lead acid batteries.

At the moment, there are 5 different market segments of automotive batteries categorized by chemical composition; lithium-ion (Li-ion), nickel-metal hydride (Ni-MH), nickel-cadmium (Ni-Cd), gasoline, and lead-acid[8]. The energy density in Wh/kg is greatest in gasoline batteries, Li-ion, then Ni-MH, and least in lead-acid[8].

Steady moderate growth for automotive batteries is expected in North America, which is the largest automotive battery market and high growth in the Asia Pacific due to emergence of China as a central hub, which has driven increasing demands for other countries in the region.

Lithium-Ion Battery

The lithium-ion battery market is forecasted to reach $93.1 bn by 2025 growing at CAGR of 17.0%, owing growth to increasing usage in electric vehicles, portable consumer electronics, and grid systems[6]. The battery’s high-energy density and safety level are key parameters driving demand. Lithium-ion batteries are normally used where lightweight and high-energy density is required i.e. in smartphones, notebooks, and hybrid automobiles. Innovations in the industry, however, is also expected to reduce the weight, cost, and increase power outputs, further enhancing this segment’s capability against other alternatives, expanding its scope for usage in other applications.

In the global market, solar power systems and e-bikes are strong areas of applications for lithium-ion batteries besides electric vehicles. Consumer electronics were the largest application segment lithium-ion batteries in 2016, accounting for 52.3% of the overall share, with India and China as key regions of demand[6]. North America is the second largest market for Li-ion batteries accounting for 25.9% of revenue in 2016 due to electric vehicle and smartphone sales[6].

*Based on EV Li-ion battery shipments (GWh) / Source: MERICS
Company Global Market Share, 2017 (%)* Country
1 Contemporary Amperex Technology (CATL) 19 China
2 Panasonic 16 Japan
3 Build Your Dreams (BYD) 12 China
4 OptimumNano 9 China
5 LG Chem 7 Korea
6 Guoxuan High-Tech 5 China
7 Samsung SDI 4 Korea
8 Beijing National Battery Technology 3 China
9 BAK 3 China
10 Funeng Technology 2 China
11 Others 20

Electric Vehicles

The global demand for e-vehicles grew to 2.1 million in 2018, with China as the major  market player and the US a far second[3]. Demand for e-vehicles in 2019 is estimated to be around 2.7 million[3]. Globally, Norway has seen one of the greatest composition changes in vehicle types, with almost every other new vehicle registered being electric. According to Centre of Automotive Management, 1/4 of all new registered vehicles are forecasted to be electric cars.

Up till recently, the US was a global benchmark for lithium-ion batteries for electric vehicles, however, if China is successful in expanding its own manufacturing capacity through its plans of building gigafactories, it will be able to produce more than triple the capacity of the rest of the world[5].

Bangladesh

In 2017, the automotive battery market size in Bangladesh was an estimated $954 mn, almost tripling in size in 2013 from $358 mn, driven by rising popularity of easy bikes and battery-run rickshaws[1]. According to industry insiders, this market is growing at an average of 20-25% YOY since 2013[2]. Chinese-made locally assembled and manufactured batteries alone account for 50% of the demand, and 70% of the batteries powering easy bikes and battery rickshaws[1]. At the moment, exports worth $40-50 mn are going to 60 countries, (Bangladesh Accumulator and Battery Manufacturers’ Association) encouraged by 15% cash incentives[2]. The market is forecasted to double in the next 5 years. Although there is a rising demand for hybrid cars and fully electric vehicles which are more efficient and environmentally friendly, E-vehicles will take time to become popular in Bangladesh and drive demand for Li-ion batteries.

Some of the key players in the automotive battery industry of Bangladesh are Rahimafrooz Batteries, Abdullah Batteries, Panna Group and Saif Powertec.

Rahimafrooz Batteries

Rahimafrooz Batteries is the largest lead-acid battery manufacturer in Bangladesh[9]. The company currently exports to more than 44 countries and produces about 200 different types of batteries for automobiles, IPS, and other applications[9]. The company is a licensed retailer for brands such as Lucas and Spark, Volta, Optus, and Delta. It also has technical collaboration agreements with foreign companies to ensure quality compliance.

Abdullah Battery

Abdullah Battery is a concern of Hamko Group, and a leading battery manufacturer in the country. Currently the company is a market leader in the solar and IPS segment.

Panna Group (Volvo)

Panna Battery manufactures a variety of lead-acid batteries as well as raw materials for batteries like 99.99% pure lead. The company produces a range of automotive, industrial tubular, solar tubular, electric vehicle, electric rickshaw, and motorcycle batteries.

Saif Powertec

Saif Power offers a wide variety of batteries for a range of applications such as passenger cars, commercial vehicles, electric vehicles, electric rickshaws, maintenance free motorcycles, solar, generators, tractors etc.

Company Applications
Rahimafrooz Passenger Car, Commercial Vehicles, Electric Vehicles and Rickshaws, Solar Power, Traction, Telecom Towers, Inverter Battery
Abdullah Battery Motorcycle Battery (SMF), HPD Battery (IPS & UPS), Solar Battery, Super DC Battery (Generator, Ship, Bus, Truck), PCV Superior and Regular (Bus, Truck), Premium Battery (Car, CNG), EV Battery (Easy Bike), R Type Battery (Rickshaw), Mega Power (N Power Type Battery), MF Battery (Nocaloca, Silva)
Panna Group (Volvo) GSMF 2 Volt Batteries (Heavy Industrial Use), Volvo SMF Battery, Volvo EV Batteries, Volvo Motorcycle Batteries, Volvo IPS Batteries, Volvo Solar Batteries, Volvo Automotive Batteries
Saif Powertec Passenger Car Battery, Commercial Vehicle Battery, IPS Battery, Tall Tubular IPS Battery, Solar Battery, Industrial/Generator Battery, Electric Vehicle Battery, Electric Rickshaw Battery

Lead acid batteries are cheaper, more widely available, require low technology to produce and are subsequently more popular in Bangladesh. However, in the long term a significant portion of lead acid batteries may well be replaced by more efficient and eco-friendly alternatives as innovations in technology make replacements more cost-effective. Bangladesh is soon to legalize electric vehicles, making way for the electric car revolution in Bangladesh similar to that of in developed countries. Next year, Nitol Motors is also set to produce a locally assembled electric vehicle.

Advances in technology is transforming the battery market, and key players, both on the demand and supply side, must be prepared to adapt to innovations to stay relevant in the future.

Mohammed Shehab, Junior Associate at LightCastle Partners, has prepared the write-up. For further clarifications, contact here: [email protected]

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