The global battery electrolyte market size was valued at USD 9.38 billion in 2022. It is expected to reach USD 25.3 billion by 2031, growing at a CAGR of 11.69% during the forecast period (2023–2031).
A battery is an electrical storage device that stores energy chemically before converting it into electricity. The liquid component of most automobile batteries, known as battery electrolyte (or battery acid due to its acidic nature), consists of a combination of water and sulfuric acid. It is one of the three main components—the anode and the cathode. A battery's electrolyte carries the electrical charge between the anode and the cathode. Batteries are used for various applications in industry, transportation, energy storage, consumer electronics, electric vehicle batteries (EVs), and even home settings.
The expanding consumer electronics market, increased public understanding of the benefits of renewable energy storage, and surging demand for lithium-ion batteries in the renewable energy sector drive the market expansion. Infrastructural growth and rising awareness of sports' benefits are expected to act as brakes on the increasing production of electric battery vehicles, the rising use of consumer electronic items, and the availability of binder-free electrodes for lithium-ion batteries over the forecast period.
The consumer electronics industry was the leading buyer of batteries in the early years of the battery market. However, due to the rise in EV sales in recent years, EV manufacturers have emerged as the biggest consumers of batterie Unlike conventional internal combustion engine (ICE) vehicles, EVs have a lower environmental impact because they do not emit CO2, NOX, or any other greenhouse gases. Due to this benefit, many nations are promoting the use of EVs through the introduction of subsidies and government initiatives. Several countries have made plans to prohibit the sale of ICE vehicles in the future. By 2025, Norway, France, and the United Kingdom plan to outlaw the sale of ICE vehicles. India also intends to phase out ICE engines by 2030, while China is currently conducting relevant research for a similar plan. But as of 2019, no nation could outlaw conventional fuel-powered vehicles because the EV industry and technology needed to prepare for such a move could cause severe market disruptions.
Nevertheless, upcoming announcements have pushed EV producers to increase their R&D spending. Lithium-ion batteries are primarily used in EVs. The cost of manufacturing EVs has decreased due to falling lithium-ion battery prices, and by 2025, EVs are anticipated to be priced similarly to gasoline-powered vehicles.
Although batteries are safe, care should be taken when handling lead-acid systems with access to lead, sulfuric acid, and damaged cells. Lead acid was correctly classified as a hazardous material in many nations. If not handled properly, lead can be harmful to your health. Lead is a poisonous metal that can enter the body through inhalation of lead dust or ingestion when lead-contaminated hands are placed near the mouth. Acid and lead particles that leak onto the ground contaminate the soil and, when they dry, become airborne. Due to their developing bodies, children and fetuses of pregnant women are most susceptible to lead exposure.
A child exposed to high levels of lead may experience behavioral issues, brain damage, kidney damage, growth problems, and hearing loss. Lead-acid batteries contain sulfuric acid, which is more harmful and highly corrosive than the acids found in most other battery systems. Contact with the eye can result in total blindness, while swallowing can harm internal organs and cause fatalities. All these elements are anticipated to harm the battery market, which is expected to restrain the global battery electrolyte market throughout the forecast period.
Technological Advancements in The Market
In terms of technology, solid-state batteries represent a paradigm shift. In contemporary lithium-ion batteries, ions move across the liquid electrolyte from one electrode to another (also called ionic conductivity). In all-solid-state batteries, the liquid electrolyte is swapped out for a solid substance that still permits lithium ions to move around inside of it. The first significant benefit is that solid electrolytes are not flammable when heated, unlike their liquid counterparts. Additionally, it enables the use of cutting-edge, high-voltage, high-capacity materials, resulting in denser, lighter batteries with longer shelf lives due to decreased self-discharge. They also offer additional benefits at the system level, like streamlined mechanics and thermal and safety management, which opens many opportunities for the market under study.
The global battery electrolyte market is segmented by battery types and their electrolyte type and end-user.
Based on battery types and their electrolyte type, the global battery electrolyte market is bifurcated into lead-acid, lithium-ion, and flow batteries.
The lead-acid battery has a low energy-to-weight ratio. Still, it has a high power-to-weight ratio, making it particularly useful for SLI (Starting Lighting Ignition) applications. Lead-acid batteries are also preferred because of their low cost when the cost is more critical than the energy-to-weight ratio, such as in backup supplies for mobile phone towers, hospitals, and off-grid remote storage. China and the United States are the two countries that produce and use the most lead-acid batteries. The continuous industrial production from North America, Europe, and Asia-Pacific has helped the lead-acid battery market segment grow.
Since lithium-ion batteries have a long lifespan, a high capacity-to-weight ratio, and a high energy density, they are perfect for consumer electronics applications. Therefore they were first created for this industry. It is anticipated that rising urbanization and consumer spending will increase demand for technologically advanced devices, which will then increase the need for lithium-ion batteries. Due primarily to its advantageous capacity-to-weight ratio, Li-ion batteries are becoming more and more popular than other battery types. Its adoption is also boosted by improved performance, increased energy density, and falling costs. Lithium-ion batteries typically cost more than other batteries. Leading market players have, however, been making investments to increase economies of scale and R&D activities to improve their output and costs.
Based on the end-user, the global battery electrolyte market is bifurcated into electric vehicles, energy storage, and consumer electronics.
The only types of vehicles used in the past were those with internal combustion engines (ICE). However, due to growing environmental concerns, technology has been moving toward electric vehicles (EVs). Since they offer high energy density, low self-discharge, low weight, and low maintenance, lithium-ion batteries are typically used in EVs. Electric vehicles are increasing due to technological developments in the electrification of two- and three-wheelers, buses, and trucks, as well as expanding the market for such vehicles. Over 70% of electric vehicles today use lithium-ion batteries, making them one of the most popular battery types. In many vital markets, total passenger car sales volumes were down in 2019.
Considering the weak global auto sales in 2019, the 2.6% market share of electric vehicles was a record-breaking achievement. China (4.9%) and Europe (3.5%) set new records for the market share of electric vehicles in 2019. The European Union has made significant investments in its Battery Alliance project to compete with Asia and nations like Germany and France, which are home to substantial automakers in the area and are at the forefront of the European battery market.
Energy storage systems depend heavily on batteries, which account for 60% of the system's overall cost. Commercial applications include peak shaving, load shifting, emergency backup, and various grid services. Emergency backup, off-grid housing, and self-consumption are examples of residential applications. Lithium-ion, lead-acid, nickel-metal hydride (NiMH), nickel-cadmium (NiCD), nickel-zinc (NiZn), and flow batteries are among the different types of batteries used in energy storage systems. The most significant market segments for battery energy storage are utilities and industrial ESS. The opportunities for battery energy storage systems during the forecast period are growing as more utilities include storage in their requests for proposals for solar projects.
The global battery electrolyte market is segmented by region: North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
North America, which includes the United States and Canada, continues to lead the world in battery market research and innovation. Due to the close economic integration of the markets in the United States, Canada, and Mexico, North America has become one of the world's economic powerhouses over time. Due to the increased use of electric vehicles, increased spending on consumer electronics, and increased consumer and manufacturing activities, North America continues to be one of the top regions for the consumption of battery electrolytes for both primary and secondary batteries. A few other factors that support the growth of the electrolyte market in the forecast period include investments in battery technology for more effective electrolytes and electrodes for longer duration and higher ion exchange to shorten charging times.
In Europe, batteries have increased dramatically, from energy storage systems to electric vehicles. Due to its wide range of uses in numerous applications, including electric vehicles, energy storage systems in solar PV projects, and consumer electronics, lithium-ion batteries are anticipated to dominate the region among all other batteries. By 2025, the lithium-ion battery market will be worth EUR 250 billion. Other batteries, like lead-acid batteries, have been used continuously in Europe for many years. Over time, these batteries have undergone technological advancements such as increased power output from advanced additives to the active materials and lower resistance designs.
Furthermore, automation and improved processes are helping to reduce costs even more. The cycle life will be extended through design improvements like improved corrosion-resistant alloy materials and innovative battery management. The market for batteries and battery electrolytes has expanded as a result of several important factors, including the rising use of electric vehicles, the abundance of data centers, the installation of energy storage systems in solar projects, and the expansion in the manufacturing and consumer electronics sectors.
The Asia-Pacific region held most of the global market share in 2019. The Asia-Pacific electrolyte market is being driven using batteries in a variety of industries, including automotive, solar PV, electronic appliances, and data centers, to name a few. China is anticipated to be the top-performing nation in the Asia-Pacific region, accounting for most sales of electronic appliances. Additionally, the country leads the market for car sales and solar PV projects (rooftop and ground-mounted). The lead-acid battery is one of Asia-Pacific's most well-known battery types. Because lead-acid batteries are less expensive than lithium-ion or flow batteries, they are used more frequently. Additionally, lead-acid batteries make up most of those used in household appliances like home UPSs, making batteries the market's largest segment. Moreover, lithium-ion battery usage is anticipated to rise over the forecast period due to the rising popularity of electric vehicles and battery energy storage systems in solar PV projects. As a result, such an event would fuel the regional electrolyte market.
Brazil has the ninth-largest economy in the world, with a 2019 GDP of roughly USD 1.59 trillion, making it the largest in South America. Brazil's market for battery electrolytes is benefiting greatly from the country's rising consumer electronics demand. Amazon Inc., working with electronic goods manufacturers, decided to stock and sell consumer electronics in Brazil in March 2018 to take advantage of market opportunities there. Brazil's leading primary battery suppliers are China, the United States, and Germany. Direct battery imports are more than exports in Brazil, indicating a heavy reliance on imports to supply primary batteries and related manufacturing goods like battery electrolytes. Additionally, the number of data centers in the nation is growing significantly, which is predicted to open up new business opportunities for battery manufacturers and electrolyte suppliers.
With the Middle East and Africa experiencing a rapid transformation, such as energy independence and economic diversification, the power sector is expected to experience significant growth. The Middle East and Africa are expanding regions for power generation, and it is anticipated that they will need more capacity to meet their aspirations for economic growth and to meet rising electricity demand. Solar energy could play a significant role in the region's future power mix. Additionally, the Middle East and Africa are anticipated to have substantial growth potential for the deployment of electric vehicles (EVs), which will increase the region's demand for secondary batteries and increase the need for battery electrolytes.
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