The global battery electrolyte market is expected to grow at a CAGR of more than 7.4% over the period of 2020-2025.Factors such as increasing awareness level of cleaner transportation systems and the electric vehicle deployment is growing at a rapid pace across the world, which in turn is expected to create a huge demand for batteries, thereby providing a huge impetus to the battery electrolyte market. Moreover, the cost of lithium-ion battery has declined by 80 percent between 2010 and 2017, thus leading to widespread deployment of the same. This is expected to be a big boost for battery electrolyte market across the world during the forecast period. However, the high cost associated with electric vehicles in comparison to conventional vehicles and lack of efficient recycling technologies for battery poses a barrier for the market being studied.
- Lithium-ion battery segment has dominated the market in 2018, and is expected to be the largest segment for battery electrolyte market during the forecast period, owing to increased use of electric vehicles and energy storage systems (ESS) for both commercial and residential applications, declining lithium-ion battery prices, and the increasing sale of consumer electronics.
- With the decreasing cost of solar photovoltaic (PV) modules and associated systems along with supportive global initiatives to eliminate the carbon emission and promote renewables, along with technological innovations in battery electrolyte market, ample opportunities are spurred for the market players.
- Asia-Pacific is the largest market and is also expected to be the fastest growing during the forecast period, with the largest contribution coming from countries, such as China and India.
Key Market Trends
Lithium-ion Battery to Dominate the Market
- The electrolytes used in lithium-ion battery market are expected to witness significant growth, with rising opportunities from the formulation and production of newly advanced electrolytes and increasing demand for energy storage systems and hybrid electric vehicles.
- The rising use of consumer electronics, such as laptops, smart phones, and other portable equipment, is expected to drive the demand for lithium-ion batteries. This, in turn, is expected to propel the demand for electrolytes.
- Globally, there is a significant oversupply of electrolyte for lithium-ion batteries, with China producing more than half of the total market share. Moreover, as of 2018, less than half of the available production capacity is being utilized in Japan and South Korea, while the United States and Europe utilize merely 5% and 1%, respectively.
- The Chinese lithium-ion batteries market is witnessing significant growth, and expanded rapidly over the past ten years, on account of cheap labour and favourable government support, in the form of initiatives, like subsidies of USD 10,000 for purchasing electric vehicles.
- Massive investments, predominantly in lithium-ion batteries, are driving down costs, while project developers are continuously getting better at designing and building customized storage systems, which is expected to further supplement the growth of battery electrolyte market.
Asia-Pacific to Dominate the Market
- The Asia-Pacific region dominated the global market share in 2018. The production of electrolytes is dominated majorly by Asian suppliers, with China leading the market, followed by Japan and South Korea.
- As battery deployment is key to tackling intermittency associated with renewable power generation, the expansive renewable energy sector has created ample opportunities for the electrolyte in batteries. The electric vehicles industry in the region is expanding on targets fixed by the governments which are fostering the demand for batteries.
- Moreover, in India, the growing automobile sector, increasing number of solar power projects, and continuous expansion of telecommunication infrastructure is expected to drive the demand for lead-acid batteries in the country, in turn driving the battery electrolyte market.
- As of 2018, China is the largest market for the electric vehicle and has registered 30 times faster growth in 2017 when compared to 2016. In 2017, the country had delivered 605,500 plug-in passenger cars including 24,800 imports. Thus, the extensive deployment of batteries in the Asia-Pacific region creates a large regional market for battery electrolyte across the world.
The battery electrolyte market is fragmented. Some of the key players are Mitsubishi Chemical Holdings Corp., Ube Industries Ltd., Shenzhen Capchem Technology Co. Ltd, 3M Co., and BASF SE.
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