The South and Central America battery market is expected to grow at a CAGR of over 4% during the forecast period of 2020 – 2025. Major factors driving the South & Central America battery market include declining lithium-ion battery prices, increasing adoption of electric vehicles, and growing the renewable energy sector. Also, increasing demand from data centers is likely to drive the market as data centers are evolving digital infrastructures for cloud services, and the next generation of cloud service may be adapted to incorporate a blockchain network. On the other hand, the demand-supply mismatch of raw materials is likely to hinder the market growth.
- The lead-acid batteries are expected to dominate the market over the forecast period due to its low cost and usage in a wide range of applications.
- Increasing the growth in data centers and economic development in countries like Brazil and Argentina for commercial infrastructure is expected to create immense opportunities for South & Central America battery market.
- Brazil is expected to dominate the market in South & Central America region, owing to the demand for consumer goods and increasing of investment in the country.
Key Market Trends
Lead-Acid Batteries to Dominate the Market
- The lead-acid batteries are expected to dominate the market in both developed and emerging economies of the South America region during the forecast period. The reason behind the expected growth is mainly due to the low cost of lead-acid battery, renewable targets, and the adoption of automated guided vehicles in industrial spaces.
- The energy-to-weight ratio of the lead-acid battery is low, but it can supply large surge currents, indicating a high power-to-weight ratio, primarily useful for SLI (Starting Lighting Ignition) applications. Also, due to the low cost, lead-acid batteries are preferred when the price is more important than the energy-to-wait-ratio. For example, in backup supplies for mobile phone towers, hospitals, and off-grid remote storage.
- Lead-acid batteries in automotive applications contribute to more than 60% of the market. Automotive (excluding electric vehicles) batteries are mostly SLI batteries, and the lead-acid battery can also be used for applications like in-vehicle entertainment systems, power steering, power locking, power window systems, etc.
- On average, each automobile manufactured contains approximately 12 kilograms of lead. Around 96% lead is used in the common lead-acid battery, while the remaining 4% in other applications including wheel balance weights, protective coatings, and vibration dampers.
- In June 2019, lead batteries have been used in a solar plus storage project in Brazil, for the first time according to Alsol, a distributed generation firm. The main motive is to deploy the batteries to utilities, which helps in improving the quality of power supply with services such as peak shaving and time shifting, as well as cutting pollution by replacing diesel back-up.
- As of 2019, the import and export values of lead-acid accumulators of a kind used for starting piston engine across south & central America countries like Brazil, Argentina, and Costa Rica etc. are USD 29.345 million and USD 79.978 billion (for Brazil) respectively.
- Therefore, based on above-mentioned factors, lead-acid battery is expected to maintain its growth momentum alongside lithium-ion batteries for South & Central America region during the forecast period.
Brazil to Dominate the Market
- Brazil is the world’s ninth-largest economy with a size of about USD 1.868 trillion in 2018 and is the largest economy of South America.
- The demand for consumer electronics in Brazil is increasing, which is a significant boost for the market studied. To embark on market opportunities in Brazil, in March 2018, Amazon Inc., which collaborated with manufacturers of electronic goods, decided to stock, and sell consumer electronic goods in Brazil.
- In Brazil, the major supplier countries for primary batteries include - China, the United States, and Germany. The import value of primary batteries in Brazil is way higher than the export, which signifies the high dependency on imports to meet the requirements of primary batteries. Distributor networks and channel partners of overseas manufacturing firms cater to the market demand for primary batteries, in Brazil.
- The battery demand in Brazil is bolstered by the fact that the demand for electricity is anticipated to register a growth rate of about 2.7% during 2014-2024, which leads to an increasing requirement of standby sources of electricity.
- The Rota 2030 program is aimed at improving energy efficiency in the transportation sector, which is a big boost for the Brazilian electric vehicle market. The surge in the deployment of electric vehicles is likely to provide a significant impetus to the Brazilian segment of the market studied, during the forecast period.
- Therefore, based on the above-mentioned factors, Brazil is expected to have a positive impact on the battery market in South & Central America region during the forecast period.
The South and Central America battery market is moderately fragmented. Some of the major players includes Exide Industries Ltd, BYD Company Ltd., FIAMM Energy Technology S.p.A., Panasonic Corporation, and EnerSys.
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