The global battery management system market size was valued at USD 5.5 billion in 2022. It is estimated to reach USD 31.52 billion by 2031, growing at a CAGR of 21.41% during the forecast period (2023–2031). Electric vehicles have been one of the most significant adopters of lithium-ion batteries in recent years. The surging adoption of electric vehicles owing to its advantages, along with government initiatives supporting the adoption of EVs, has led to higher adoption of battery management systems to asses battery performance, thereby driving market growth.
The battery management system is an electronic regulator that monitors the battery's utilization and performance. The battery management system determines the battery pack's durability and performance. High-power traction and stationary batteries require constant parameter monitoring, which makes a battery management system necessary.
The battery management system assures that the battery does not operate above maximum voltage and current levels and collects and analyzes operational data from individual cells in the battery pack. It also protects the battery pack from being overcharged or discharged, calculates the energy left in the battery, and continuously checks for shorts, loose connections, and wire insulation failures. As a result, BMS finds widespread use in numerous industries, including the automotive, consumer electronics, telecommunications, healthcare, and renewable energy systems sectors.
In recent years, the increasing popularity of electric cars (EVs) has led to EV makers emerging as significant buyers of lithium-ion batteries. As per the International Energy Agency, sales of electric cars reached roughly 6.6 million in 2021, tripling their market share from two years prior. Such aggressive growth in EVs is expected to increase the demand for the battery management system (BMS), as it is a critical component for monitoring, protecting, and optimizing EV batteries.
Due to the advantages of EVs, like lower environmental impact, various countries encourage EV adoption by introducing subsidies and programs and setting ambitious EV targets. For instance, the Indian government has tripled its electric vehicle purchase subsidy program budgetary allocation. According to the budget document, the estimated budget for the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) subsidy for fiscal 2023 is INR 2,908 crore, which is approximately nine times more than FY21 and more than three-and-a-half times the INR 800 crore allocation for 2022. Such initiatives are expected to increase the growth of electric vehicles and, in turn, drive the BMS market.
The lithium-ion batteries are becoming the most used battery chemistries in the emerging applications of electric vehicles (EVs) and the Energy Storage System (ESS) globally. However, there are increasing safety concerns for lithium-ion batteries in recent times as these batteries are susceptible to high temperatures and inherently flammable. Lithium-ion battery packs' degradation rate is significantly accelerated due to elevated temperatures. In the event of a failure of a lithium-ion battery pack, it has the potential to ignite and cause extensive damage. In order to mitigate this risk, it is imperative to have an effective battery management system (BMS) capable of actively monitoring the battery's condition to prevent such incidents from occurring.
Recently, there have been incidents of fires caused by lithium-ion batteries. In September 2021, a fire broke out in California's world's largest battery facility, Vistra Corp's 300 MW/1200 MWh Moss Landing Energy Storage Facility. The firefighting crew reported that despite no significant fire hazard, battery racks had been scorched, and wires had melted, resulting in the facility going offline. Similarly, the Li-ion battery ESS fires have been a safety concern in residential applications. According to ACCURE Battery Intelligence GmbH, in May 2022, Germany recorded five fires at residential ESS systems. Hence, such a scenario will likely increase the demand for an efficient battery management system (BMS) during the forecast period.
The off-the-shelf battery management systems, also called commercial or standard BMS, were developed by a range of manufacturers for both mobile and stationary applications. Off-the-shelf systems may not have all the functionality a customer desires, unlike customized BMS.
Most custom and off-the-shelf battery management systems focus on the main features of battery cell protection, charge/discharge limit monitoring, and keeping the battery prepared to power the specific application. However, custom BMS offers additional features not included in off-the-shelf models, such as cell balancing, charge control, State of Health (SOH) readings, State of Charge (SOC) readings, etc. Such limitations in Off-the-shelf battery management systems will likely restrain market growth during the forecast period.
The prominent global battery management system market players are highly engaged in product launches and advancements to increase their market foothold. For instance, in May 2022, Marelli Holding Co., Ltd., a provider of battery management technology, introduced a distributed battery management system to expand its technology solution for electric vehicles. This newly introduced technology guarantees enhanced flexibility and increased efficiency at a comparatively reduced expense by eradicating wired physical connections, typically required in alternative battery management systems.
Additionally, Analog Devices, Inc., a manufacturer of battery management systems, introduced a wireless battery monitoring system in September 2020 that enhanced production and design flexibility without compromising range or accuracy over the battery's lifetime. This newly introduced system has the potential to reduce wiring by 90% and volume by 15%. Automobile manufacturers can increase production of electric vehicles across a broad spectrum of vehicle classes. Thus, such product developments are expected to create opportunities for market growth.
| Study Period | 2019-2031 | CAGR | 21.41% |
| Historical Period | 2019-2021 | Forecast Period | 2023-2031 |
| Base Year | 2022 | Base Year Market Size | USD 5.5 Billion |
| Forecast Year | 2031 | Forecast Year Market Size | USD 31.52 Billion |
| Largest Market | Asia Pacific | Fastest Growing Market | North America |
Asia-Pacific Dominates the Global Market
Based on region, the global battery management system market is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
Asia-Pacific is the most significant global battery management system market shareholder and is expected to expand substantially during the forecast period. The growing population, urbanization, the reduced cost of electronic items, the launch of new smart technology, and cheaper internet data drive the battery management systems (BMS) market in Asia-Pacific. Technological advancements and rising customer experience improvement demands in China, India, and Japan are expected to propel the Asia-Pacific market's revenue growth at the fastest rate. Moreover, BMS companies are concentrating on expanding their production capacity in the Asia-Pacific region in response to the increasing demand for rechargeable and long-lasting batteries.
In developing countries, batteries find application in diverse sectors, including energy provision, consumer electronics, telecommunications, and storage. India is one of the world's top five emitters of carbon dioxide. The government has taken the lead in putting laws in place that encourage more people to use electric cars in an effort to reduce air pollution. For instance, in April 2022, NITI Ayog announced its battery swapping policy and suggested that batteries are likely to be enabled with a Battery Management System to protect batteries from conditions such as thermal runaway. Such initiatives by the Indian Government to encourage the use of BMS will likely drive the market studied during the forecast period.
North America is one of the fastest-growing regions in the market due to the presence of developed nations like the U.S. and Canada. The U.S. was one of the largest global markets for energy storage systems and electric vehicles in 2021. Both the end-user segments utilize battery management systems (BMS) for the effective performance of the battery system. Due to the high demand from these two massive end-user industries, the country is expected to be one of the largest and fastest-growing markets for BMS systems during the forecast period. Similarly, the rise in the adoption of solar PV systems by the residential and commercial and industrial (C&I) sector is expected to act as a substantial driver for the market studied.
Additionally, in October 2020, the Canadian Government announced a CAD 295 million investment in Ford's EV factory in Oakville, Ontario. The plant is being repurposed to produce Evs, and the entire project is valued at USD 1.8 billion. Such changes in the Canadian EV sector are expected to push the demand for lead-acid batteries for ancillary load applications in the Canadian market, driving the North American battery management system market during the forecast period.
Germany is amongst the largest markets in Europe, and according to the Society for the Promotion of Consumer Electronics in Germany (GFU), as of 2021, the consumer electronics market segment registered sales of EUR 31.2 billion, witnessing a 2.5% growth year-on-year. The fastest growing segment was the IT products for private use, witnessing a 3.1% year-on-year growth and accounting for EUR 8.7 billion, followed by private telecommunications devices, which grew by 7% year-on-year to reach EUR 13.6 billion. However, as electronic battery management systems are relatively cheaper, these systems are expected to account for a comparatively small revenue share during the forecast period.
In addition, the UK is one of Europe's largest markets for renewable energy, energy storage, and electric vehicles. The country is anticipated to be one of the leading markets for BMS over the projected period due to the consistent growth of these end-user markets. The country has had one of the greatest CAGRs (compound annual growth rates) of any country in the world from 2012 to 2021 regarding installed renewable capacity.
Brazil dominates the South American market. The economic development in Brazil is leading to widespread commercial infrastructure development. As the country's economic activity is booming, it is witnessing a considerable increase in the growth of data centers, which is expected to create opportunities for the Battery Management System (BMS). The electricity supplies at data centers are paramount to ensure continuous operations, which leads to the deployment of Battery Management Systems (BMS) at data center sites, the most sought-after necessity. For instance, in December 2021, OneX opened its first data center in Brazil. The data center is in Ipatinga, in the Vale do Aço region of Minas Gerais. The company plans to open 5 data centers by the end of 2023, including one data center under consideration in Minas Gerais, to be opened in 2022. Such upcoming data centers will likely increase the market studied during the forecast period.
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The global battery management system market is segmented by application.
Based on application, the global battery management system market is bifurcated into stationary, portable, and transportation.
The transportation segment dominates the global market and is expected to expand substantially over the forecast period. The battery management system is deployed in various electric vehicles, two-wheelers, passenger vehicles, light commercial vehicles, and heavy commercial vehicles. The transportation industry is known for its greenhouse gas and carbon emissions. Similarly, the net environmental impact of burning fossil fuels has historically been the weak spot for manufacturers of motor vehicles. Moreover, governments implemented stringent regulations to reduce the pollution caused by internal combustion engines. As a result, several large automotive manufacturers focused on moving toward electric vehicle development and manufacturing.
One critical factor in the development of electric vehicles is battery management systems. Thus, manufacturers are involved in intense research and development to achieve higher performance and safety of the battery pack. For instance, in May 2022, Marelli Holdings Co., Ltd. launched its wireless distributed battery management system. It is expected to eliminate the physical wired connections by 90%, typically needed in other Battery Management System architectures. This allows for higher flexibility, improved reliability, reduced costs, and increased efficiency, all crucial aspects of electric vehicles.
Stationary batteries are witnessing a significant demand surge due to the increasing demand for improving power quality, the growing penetration of renewable energy, and increasing demand from telecom industries, energy storage systems, UPS, and data centers. Most large-scale energy systems are installed in power stations, which require various storage systems for emergencies and backup power supply. Batteries are becoming one of the most prevalent forms of large-scale energy storage systems. In addition, batteries are crucial in energy storage systems, accounting for sixty percent of the total system cost. Various types of batteries utilized in energy storage systems are lithium-ion, lead-acid, nickel metal hydride (NiMH), nickel-cadmium (Ni-Cd), nickel-zinc (NiZn), and flow batteries, among others. Utilities and industrial ESS are the biggest segments of the battery energy storage market. As more utilities incorporate storage into solar project solicitations, market prospects are expected to rise during the projection period.
Portable electronic applications are increasing in popularity as the size of electronic components continually reduces and processing power increases. These new electronic devices require sophisticated and lightweight battery packs. The availability of ever smaller and lighter lithium cells has increased the demand for energy-efficient appliances. Portable electronics include laptops, smartphones, digital cameras, radios, portable digital assistants, audio devices, smart watches, portable power stations, portable medical equipment, and several others that need a battery management system. In recent years, there has been a significant increase in demand for all these electronic devices, and one of the standard requirements in all these devices is that they must have a long battery life. Thus, a battery management system could play a vital role in achieving energy efficiency by improving the energy usage of each system component with a high-performance power management system.
