The India lead-acid battery market was valued at USD 4.86 billion in FY 2020, and it is expected to reach USD 7.83 billion by FY2026, registering a CAGR of about 9.47% during the forecast period of 2021-2026. The COVID-19 pandemic reflected a minor impact on the lead-acid battery market in India, as the demand from the end-user industries recovered in the later half of 2020. This was primarily due to the deficit covered by the industrial and other applications segment, which was created by decreased demand in the SLI segment due to decreased sales of vehicles during the pandemic. Factors, such as the growing demand from the telecommunication and data centers, coupled with the increasing applications in industries, such as railways, are expected to drive the market during the forecast period. However, the alternate technologies, mainly lithium-ion, are expected to disrupt the market growth, primarily owing to their decreasing costs and technical advantages.
In terms of application, the market is dominated by SLI batteries (start, light, and ignition), owing to the large vehicle fleet of the country, which translates into large volumes of lead-acid battery sales.
New advancements in lead-acid battery technologies are expected to create immense opportunities for the India lead-acid battery market soon.
Increasing demand from the telecommunication and data center applications are expected to drive the India lead-acid battery market growth during the forecast period.
Key Market Trends
SLI Batteries Application to Dominate the Market
Starting, lighting, and ignition (SLI) batteries have been in almost every car for the past 100 years. Generally, SLI batteries are used for short power bursts, such as starting a car engine or running light electrical loads. Moreover, these batteries supply extra power when the vehicle’s electrical load exceeds the supply from the charging system (alternator) and act as a voltage stabilizer in the electrical system that evens out voltage spikes, thereby preventing them from damaging other components in the electrical system.
SLI batteries are designed for automobiles and therefore are always installed with the vehicle’s charging system, which means a continuous cycle of charge and discharge in the battery whenever the vehicle is in use. The 12-volt batteries have been the most used batteries for more than 50 years. However, its normal voltage (while in use in the car and charged by the alternator) is close to 14-volt.
The major factors attributing to the growth of the SLI battery market is the increasing demand for these batteries to power starter motors, lights, and ignition systems or other internal combustion engines with high performance, long life, and cost-efficiency. Moreover, Lead-acid battery is the technology of choice for all SLI battery applications in conventional combustion engine vehicles, such as cars and trucks, in India.
Over the past few years, India witnessed tremendous growth in per capita income. This, in turn, improved the level of disposable income. As a result, there has been a sharp increase in the sales of automobiles, particularly of the two- and four-wheeler varieties. This surged the demand for SLI batteries. According to the Society of Indian Automobile Manufacturers (SIAM), a total of 18.61 million vehicles were sold in India in 2020, which was down by 13.60%, compared to the previous year, when 21.54 million vehicles were sold. The decline was mainly due to the COVID-19 pandemic, which led to the temporary shutdown of the manufacturing facilities, thus leading to the decline in demand for SLI batteries.
However, according to the Federation of Automobile Dealers Associations, personal vehicle sales in November 2020 stood at 2,91,001 units compared to 2,79,365 units in November 2019, registering a 4.17% growth and overall automotive exports reached 4.77 million vehicles in FY 2020. In India, EV sales, excluding E-rickshaws, witnessed a growth of 20% and reached 1.56 lakh units in FY20. Thus, with the recovering economy and demand for automobiles, the demand for SLI batteries is likely to increase during the forecast period.
Therefore, based on the above-mentioned factors, SLI battery application is expected to dominate the India lead-acid battery market during the forecast pperiod.
Increasing Demand for Telecommunication and Datacenter Applications
The telecommunication industry in India is the second-largest across the world, with a total of 1.17 billion subscribers. Stationary batteries are used for a wide range of applications, where power is necessary on a standby or emergency basis. These batteries are not discharged frequently due to minimal duration, and they do not require high storage capacity. Thus, lead-acid batteries provide a viable solution to the telecom sector.
The growing population, age of digitalization, and the launch of 4G services were the prominent factors for the growing subscriber base in India during the last decade, and it is projected to witness a substantial growth with the upcoming launch of 5G services across the country. With increasing subscribers, the companies are required to increase the number of telecom towers in the country, which has created a considerable demand for lead-acid batteries for backup purposes.
According to GSM Association (GSMA), the mobile economy of India is rising rapidly, and it will contribute significantly to India’s gross domestic product (GDP). In 2019, India surpassed the United States to become the second-largest market in terms of the number of app downloads. With increasing growth in the e-commerce industry and digitalization, the lead acid battery manufacturers are set to expand their market shares across the country.
The share of rural subscribers witnessed significant growth, accounting for 44.5% of total subscribers in August 2021, compared to 37.8% of the total subscribers in December 2012.
Moreover, the increase in the data centers and tower installations during the forecast period is likely to drive the demand for lead-acid batteries, until a viable alternative comes up that can be used instead of lead-acid batteries for battery-based power backup purposes. The lithium-ion battery has been emerging as a viable alternative to the lead acid battery. However, lithium-ion batteries are not expected to replace them in the near future. In recent times, data centers have become an alternative real estate segment in the country, driving the market demand for lead-acid batteries. India has approximately 127 data centers, along with 502 services providers.
Therefore, based on the above-mentioned factors, increasing demand for telecommunication and datacenter applications are expected to drive the lead-acid battery market in India during the forecast period.
The India lead-acid battery market is moderately consolidated. Some of the major players include Exide Industries Ltd, Amara Raja Batteries Ltd, Luminous India, HBL Power Systems Ltd, and Jayachandran Industries (P) Ltd.
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