Secondary Battery Market Size, Share & Trends Analysis Report By Technology (Lead-acid Battery, Lithium-ion Battery, Nickel Metal Hydride, Other), By Applications (Automotive Batteries, Industrial Batteries, Portable Batteries, Motor Vehicle, Electronic, HEV, NEV, Stationary, Telecom, UPS, Other), By industry (Chemical and Petrochemical, Oil and Gas, Energy and Power, Automotive, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global secondary battery market size was valued at USD 121.54 billion in 2023. It is projected to reach USD 389.04 billion by 2032, growing at a CAGR of 13.80 % during the forecast period (2024–2032). 

A secondary battery is an electrical battery that can be repeatedly charged, discharged, and recharged, as opposed to a primary or disposable battery, which is fully charged and discarded after use. Lithium-ion batteries are the most common type of secondary batteries. They are also becoming more popular because they have an excellent capacity-to-weight ratio. Smartphones are one of the fastest-growing elements of the consumer electronics market, and they substantially impact the secondary battery market.

Secondary battery demand has increased due to exciting new markets, such as electric vehicles and energy storage systems (ESS). Combining ESS with renewable energy sources such as wind, solar, or hydro is technically and economically feasible for significantly enhancing grid stability. Multiple factors, such as technological advancements, a surge in end-user industries, government policy-level support to promote energy storage infrastructure, etc., are driving the global expansion of the secondary battery market.

Market Dynamics

Global Secondary Battery Market Drivers

Increasing Adoption of Electric Vehicles

The consumer electronics sector was the primary consumer of lithium-ion batteries in the early years of the market. However, due to the increasing EV sales, electric vehicle (EV) manufacturers have become the largest consumers of lithium-ion batteries in recent years. The environmental impact of EVs is lower than that of conventional internal combustion engine (ICE) vehicles because they do not emit CO2, NOX, or any other greenhouse gases. As a result of this benefit, many nations are introducing subsidies and government programs to promote the use of electric vehicles. EVs primarily use lithium-ion batteries, and the declining cost of lithium-ion batteries has reduced the cost of manufacturing electric cars. Nickel Metal Hybrid (NiMH) batteries are ideal for the automotive industry due to their wide operating temperature range and fast charging capacity. NiMH batteries can also handle the high power levels required for electric vehicles.

Decreasing Prices of Lithium Ion Battery

The cost of lithium-ion batteries has steadily declined in the last ten years. Consistent improvement in battery performance is achieved through sustained R&D to improve battery materials, reduce the amount of non-active materials and material costs, improve cell design and production yield, and increase production speed. Battery manufacturers in Asia-Pacific, particularly China, have even lower prices than the graph's average prices. Lower labor costs are a significant cause of lower prices in China. Increased production volume, particularly in China, aided in achieving economies of scale in lithium-ion battery manufacturing. Battery separators have played an important role in lowering the prices of Li-ion batteries. The significant capacity additions increased competition among manufacturers, further reducing costs but at the expense of the manufacturers' profitability.

Global Secondary Battery Market Restraint

Mismatch in Demand-Supply for Raw Materials

With the decreasing cost of lithium-ion batteries, the demand for batteries and minerals used in battery manufacturing has increased significantly. This situation raises mineral prices and creates a mineral supply shortage. Manufacturers in the Asia-Pacific region expect that they will not have enough to keep their mass-production Li-ion battery plants running at total capacity. Since more money is being put into making EVs, the consumer electronics industry has to compete with its lithium-ion batteries.

Due to changes in the demand for and supply of nickel and copper, as well as uncertainty in the mining industry of the Democratic Republic of the Congo, production is expected to go down. The production of batteries generates wastewater and releases cadmium, cobalt, copper, cyanide, iron, lead, manganese, mercury, nickel, and zinc, among other pollutants. Manufacturers are typically advised to reduce the number of hazardous substances released into the environment. These factors are anticipated to restrain the market growth during the forecast period.

Global Secondary Battery Market Opportunities

Growing Use of Artificial Intelligence in the R&D Phase of Battery Manufacturing

The battery manufacturers are investing heavily in R&D endeavors designed to extend battery life. A machine learning model accurately predicts the battery's service life by combining artificial intelligence with extensive experimental data collection. As batteries become faster and cheaper, the industrial sector will likely adopt them more frequently. Consequently, artificial intelligence in the R&D phase of battery manufacturing may indirectly influence the growth of the secondary market over the next few years.

AI is anticipated to reduce the cost of R&D activities and speed up the research process. Some businesses have attempted to improve their products by utilizing AI technology. For example, InoBat, a Slovak battery startup, claims that AI will help it achieve a 20% increase in production by 2023. Dyson claims that it will use artificial intelligence tools to commercialize its solid-state battery technology.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global secondary battery market is bifurcated into five regions, namely North America, Asia-Pacific, Europe, the Middle East and Africa, and South America.

Asia-Pacific is the most significant shareholder in the global secondary battery market and is expected to grow at a CAGR of 15.89 % during the forecast period. Electric vehicle adoption is increasing at a faster rate in both developed and developing economies in Asia-Pacific. China leads the world in electric vehicle sales, with other developing economies, such as India, converting their public transportation infrastructure to accommodate electric vehicles. India has no domestic lithium reserves; therefore, the government is attempting to acquire lithium mines in other nations. Due to growing urbanization, rising sales of consumer electronics such as smartphones, tablets, and computers, and enhanced internet connectivity, the number of internet users in the country is increasing rapidly. Japan holds a significant share of the global secondary battery market due to the expansion of the automotive industry and the proliferation of smart devices.

South America is expected to grow at a CAGR of 6.12% during the forecast period. The increasing demand for consumer electronics in Brazil is a significant boon for the secondary market. Brazil's economic growth is leading to the expansion of its commercial infrastructure. As the nation's economic activity flourishes, it is experiencing a rapid development of data centers, which should create opportunities for lithium-ion batteries. In the coming years, a large number of cellular towers are expected to be constructed, which will increase the demand for batteries for power backup. In addition, the growth of the telecommunications industry is anticipated to boost the industrial battery market over the forecast period.

The United Kingdom's government is making numerous efforts to enhance the nation's telecommunications infrastructure, a promising market sign for secondary battery sales. The UK government is providing incentives, such as feed-in-tariff, to encourage the adoption of clean energy on a residential scale. It has also agreed to reduce the tax for installing battery systems, but only if they are supplied and installed alongside solar panels. Germany has the most considerable in the EU and a reasonably developed internet ecosystem, and the automotive sector is crucial to Germany's economy. In addition, electric cars are gaining market share in the German automobile industry. The country's telecommunications sector's advancements are also anticipated to benefit the demand for secondary batteries.

The United States is one of the world's largest electric vehicles (EV) markets. EV manufacturers in the country cater primarily to domestic demand for electric vehicles. Consequently, the increase in EV sales in the country drives the manufacturing sector, supporting secondary battery market expansion. Demand for secondary batteries in Puerto Rico has been rising due to factors including the increasing importance of a stable electricity supply, governmental goals, and the expansion of renewable energy sources. In addition, Canada provides business opportunities for secondary batteries in various industries, including renewable energy and oil and gas. Several areas in Canada, notably Ontario, are developing clean energy technologies that promote economic expansion.

Saudi Arabia has the largest market for electric vehicles in the Middle East, most of which are imported. The best-selling EVs in Saudi Arabia have been the BMW i8 and Porsche Panamera PHEV; both are high-end plug-in hybrid electric vehicles (PHEVs). The Saudi Industrial Development will invest in renewable energy projects and renewable energy component manufacturers. The telecom industry is anticipated to drive the secondary battery market due to the rising number of active mobile subscribers in the country. The increasing number of subscribers may necessitate an expansion of the telecommunications infrastructure, resulting in a more significant number of towers. These towers necessitate power backup, increasing the demand for power backup facilities and secondary batteries over the forecast period.

Segmental Analysis

The global secondary battery market is segmented by technology and application.

Based on technology, the global market is bifurcated into lead-acid batteries, lithium-ion batteries, and others.

The lead acid battery segment is the highest contributor to the market and is expected to grow at a CAGR of 15.24 % during the forecast period. Lead-acid batteries are preferred because of their low cost when the price is more critical than energy-to-weight ratios, such as in backup supplies for mobile phone towers, hospitals, and off-grid remote storage. The lead-acid battery can also be used for in-vehicle entertainment systems, power steering, power locking, power window systems, and other applications. China and the United States are major producers and consumers of lead-acid batteries.

Primarily due to the advantageous capacity-to-weight ratio, lithium-ion battery (LIB) is anticipated to dominate the global battery market in the latter stages of the forecast period. Better performance, greater energy density, and dropping prices are additional elements that significantly contribute to the LIB's increased adoption. Most LIB production facilities are in Asia-Pacific, North America, and Europe. Major market participants, such as BYD Company Limited and LG Chem Ltd, intend to establish new production facilities in the Asia-Pacific region, especially in India, China, and South Korea.

Based on application, the global market is bifurcated into automotive batteries, industrial batteries, portable batteries, and others.

The automotive batteries segment owns the highest market share and is expected to grow at a CAGR of 18.36 % during the forecast period. Batteries are used a lot in the auto industry, which includes hybrid electric vehicles, electric vehicles, and other types of vehicles. Lithium-ion batteries are the only technology on the market capable of satisfying original equipment manufacturer (OEM) demands vehicle driving range and charging time because of their high energy density, fast recharge capability, and high discharge power. Batteries with different technologies are used in different parts of cars. It helps automakers meet government goals for lowering CO2 emissions from transportation.

The industrial battery segment can be split into motive and stationary sub-segments. Secondary batteries are used for backup power in industries and construction sites. Lead-acid batteries have dominated the market share in the motive segment due to their low cost, reliability, and well-established supply chain. Furthermore, due to maintenance requirements, the market share of flooded lead-acid batteries is expected to decline. Lead-acid batteries are cheap and are used in many industrial trucks and golf carts. It means that, compared to other types of batteries, this type might keep a significant market share in the future.

Impact of covid-19

The automotive industry is critical to the economy's growth. However, during the second and third quarters of 2020, the COVID-19 outbreak impacted the whole automotive supply chain, affecting new car sales in FY 2020.

South America is most affected by COVID-19, with Brazil leading the way, followed by Ecuador, Chile, Peru, and Argentina. South America's government (SAM) has taken a number of steps to protect its citizens and stem the spread of COVID-19. South America is expected to have fewer export revenues as commodity prices fall and export volumes fall, particularly to China, Europe, and the United States, which are all significant trading partners. The manufacturing industry, especially automotive manufacturing, has been damaged by containment measures in various South American countries. Due to the pandemic, major automotive manufacturers have also temporarily halted manufacturing in the region as a cost-cutting move. Furthermore, the automobile disc brake industry has been significantly affected in 2020 due to a lack of raw materials and supply chain disruption.

The Automotive Brake System control module of a vehicle is meant to alert the driver with a warning light if the system fails. The module itself is rarely defective; instead, the sensors or the wiring to the sensors are frequently defective. The most typical cause of dysfunction is when the Automotive Brake System is contaminated with particles or metal shavings. There is no signal continuity when sensor wiring is destroyed. Brake fluid becomes contaminated in corrosive situations, and the hydraulic unit fails to function.

Recent Developments

• December 2021- ABSLTM Lithium-ion (Li-ion) batteries were successfully integrated into the National Aeronautics and Space Administration (NASA) James Webb Space Telescope launch.
• August 2022- LG Chem, a leading global diversified chemical company, and ADM, a global leader in nutrition and biosolutions, established two joint ventures for the U.S. production of lactic acid and polylactic acid to meet the rising demand for a wide range of plant-based products, including bioplastics.
• August 2022- Contemporary Amperex Tech Co., Limited (CATL) announced it would invest 7.34 billion euros in constructing a 100 GWh battery plant in Debrecen, east Hungary. It will be the company's second battery plant in Europe after its German plant.