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Emerging Battery Companies In Asia Pacific

Battery consumption in the Asia Pacific region is increasing and battery companies are advancing their production and distribution to meet the increasing demands. This advancement is however challenged and adoption of increasingly diverse approaches to develop batteries for different segments is critical providing an opportunity for companies to grow.

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Definition / Scope

Asia-Pacific is the emerging rapid grower for batteries globally as it is regarded as fast pacing hotbed for battery-related investments and new innovation to this technological aspect flourishing with research and development [1].

Simply talking, batteries are divided in to two classes: primary and secondary. Primary batteries are the ones that serve for a single use and they are discarded afterwards. These batteries have higher capacity and initial voltage with sloping discharge curve whereas, Secondary batteries are the rechargeable ones that can serve for multiple times use and are for long term use. They have a lower capacity and initial voltage, a flat discharge curve, higher self discharge rates and varying recharge life ratings [2].

Some common batteries include sealed lead acid battery, nickel cadmium battery, nickel-metal hydride battery, and lithium ion batteries among others. Different applications of batteries include portable computers, cellular phones, home appliances, audio and video equipment, toys, and electric vehicles [3].

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Market Overview

Asia-Pacific is dominating the battery market due to the rising demand for automobiles and industrialization. The developing countries in Asia-Pacific such as China and India are expected to hold the largest market share of the battery market due to rising automotive production activities. Rising demand from consumer electronics segment and an increasing number of electric vehicles in China and Japan are driving the market towards growth [4].

The Asia Pacific battery market was valued over US$ 50 million in 2018 and the industry is becoming consolidated; competition will remain intense. The top Japanese suppliers held 80% of the market last year, but new contenders from other countries in Asia are making strong in-roads. BYD Battery Co. Ltd. in China is an example of a major new global battery producer. LG Electronics Inc. and Samsung Electronics Co. Ltd. in South Korea are following. These companies are gaining ground due to low pricing and improving quality. 

Due to cost advantages, lighter-weight, and ongoing improvements, lithium-ion (Li-Ion) batteries are increasingly finding use in high-drain applications such as consumer electronics and cordless electric power tools. Manufacturers are increasingly turning away from lower-value nickel metal in favor of Li-Ion, which offers greater power density.

Li-Ion batteries are forecast to decrease in price in the near future, which will support demand. Li-Ion is also the most popular battery chemistry in energy storage systems and will continue to dominate battery chemistries utilized in this application going forward. Electronic cigarettes (e-cigarettes) are another niche market with the potential to offer significant future growth [5].

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Key Metrics

Metrics Value Explanation
Base Year 2017 Researched through internet


Market Risks

The top spot is occupied by North America region that still dominates the global batteries market because of eco-friendly initiatives & increased production of technologically advanced vehicles. Similarly, strategic marketing initiatives, brand equity, and product differentiation are the key assets to enhance competitiveness in the marketplace while mitigating the risks of counterfeiting [6].

Top Market Opportunities

  • Limited availability of renewable source: The solar and wind power are variably present due to the weather conditions thus batteries can aid in stabilizing grids by storing energy efficiently. Hence, grid storage is another area that has a role to play [7].
  • Need of hour: The battery companies in Asia Pacific are growing so as to meet the needs for achieving the fast-charging and high capacity batteries for electric vehicles; highly competent batteries for grid-level storage for solar and wind farms; and batteries to get rid of fire risks in the consumer segment etc. [8].
  • Technological development: Swiss Federal Laboratories developed the solid state electrolytes that compete for liquid electrolytes in efficiency and conductivity [9].

Market Drivers

Asia Pacific is the largest market and rapidly growing industry for battery production. The region is also pacing the market for battery-related investments and for research and development of new technological advancement [10]. On the basis of the region, Asia-Pacific and North America are estimated to be the key markets for industrial batteries as the surge in industrial activities and need for high capacity power backup in these regions [11].

Countries like Japan, China, South Korea are leading the market in the region and countries such as India, Australia have shown tremendous growth in the past few years [12]. The factors that are driving the Asia Pacific market are: advancements in energy storage, distributed generation, electric vehicles, and consumer electronics etc. Also, the huge demand for UPS in industrial sectors such as oil & gas, manufacturing, chemical, and healthcare is boosting the market growth.

Strengthening economic growth across the emerging economies accompanied by a significant expansion in the data center, telecommunication, and automotive industries will drive the global market growth [13].

Market Restraints

Although the market growth of the battery industry in the Asia Pacific is augmenting, several factors are restraining the market as safety issues related to battery usage, issues with emission from the recycling of industrial batteries from the government, and high capital investments in the industrial batteries industry. Also, the key market players as Johnson EnerSys Inc., Exide Technologies Inc. etc have posed a restrains to Asia Pacific market [14].

Considering the type of battery, lead-acid batteries are expected to be restrained when compared to lithium-ion batteries because of lower energy density, short life cycle, and higher true cost considering lifespan and performance [15].

Industry Challenges

  • Cater the need: Since, the dependency on batteries is surging high to cater the need of a modern life, there are ample of challenges to meet this need and adopt varied approaches to develop batteries for different segments [16].
  • Disposal issues: Some batteries like Ni-Cd and other small size Pb-acid batteries require special disposal and they cannot be thrown as they contain poisonous components [17].
  • Drawbacks of certain battery type: Lithium-ion batteries cannot withstand high temperatures. Their capacity also fades over time as a result of chemical reactions occurring at the time of charging/discharging/even at resting stage [18].
  • Cost: The Li-ion battery is quite costly as it contains metal (Co and Li). Similarly, the lack of economics for proper recycling is also an issue [19].

Technology Trends

Na-ion batteries could replace Li-ion because sodium is readily available than lithium in grid storage market [20].

Also, it is assumed that graphene batteries can serve power to travel an electric vehicle for 500 miles on a single charge. However, it is difficult to predict exactly how next generation of batteries will be like but huge amount of work is going to come up with the best results and solve the existing problems. Also, the attempt to dispose by recycling lithium-ion batteries are developing, this can decrease environment impact of extracting more lithium and reduce cost as well [21].

Pricing Trends

The lead-acid market of battery in Asia Pacific lead is anticipated to rise with the CAGR of 5.07% over the period of 2017-2025, generating $38508 million by its end. The revenue was $24921 in 2016 [22]. The price of lithium-ion batteries has dropped by 20-50% during the last few years. This prompts established battery manufacturers to shift production to lower-cost regions such as China. Prices have dropped by 10-20%.

Similarly, with respect to grid market, the growth rate of 9.1% CAGR is expected during 2015-2020. The profits will rise from US$9.21 billion in 2015 to US$14.25 billion in 2020. Likewise, Li-ion battery is estimated to hit $100 per kWh by 2020 [23].

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Regulatory Trends

Asia-Pacific follows the battery companies in North America and Europe in batteries market The surging demands for electric, hybrid electric, and plug-in hybrid electric vehicles are creating an opportunity for this market [24].

In 2014, METI (Japanese Ministry of Economy, Trade, and Industry) launched a US$100 million subsidy program to incentivize the commercial and residential update of Lithium-ion batteries. Later, METI estimated US$779 million scheme program for battery installations and energy efficient technologies. [25] .

Also, the government policies of multiple nations have become more encouraging and favoring the grid and the renewable energy storage. Such policies are destined to drive the demand for the batteries and thus provide an increment in revenues to the battery manufacturers [26].

Other Key Market Trends

The Asia Pacific is one of the fastest growing regional markets for lithium-ion battery and accounted for over 45% share of the total market. Likewise, government organization provides funding supports to several research projects in this field. The region is expected to have significant growth during the years to come owing to strong demand for smartphones, tablets, and other mobile devices in the region.

The intense growth in the electronics industry and continuous development in the automotive sector has led to increased application of lithium-ion batteries in this region. The countries like China, Japan, India, and South Korea are well positioned to enter the field of lithium-ion battery [27].

Market Size and Forecast

Asia Pacific dominated the global battery market with revenue over USD 50 billion in 2018 on account of the presence of a majority of manufacturers in Japan and South Korea. The budding consumer electronics industry in China, India, Malaysia, Singapore and Thailand is expected to result in high demand for lithium-ion batteries in the next eight years. Increasing automobile production in India and China is projected to propel demand for lead acid batteries in the near future [28].

The Asia Pacific Lithium-Ion Battery Market Size would witness market growth of 10.8% CAGR during the forecast period (2017 – 2023) due to increasing adoption of these batteries in smartphones, tablets, and laptops & Pcs. Asia Pacific is the largest contributor in the target regions lead-acid battery market and is expected to continue its dominance till 2020. Currently, the Asia Pacific lead-acid battery market is expected to reach over US$ 20 Million by 2020.

The China market holds the largest market share in Asia Pacific Lithium Ion Battery in Electronics Market by Country in 2016 and would continue to be a dominant market till 2023; growing at a CAGR of 7.8 % during the forecast period. The Japan market is expected to witness a CAGR of 10.2% during (2017 - 2023) in Asia Pacific Lithium-Ion Battery in Automotive Market. Additionally, The India market is expected to witness a CAGR of 13.7% during (2017 – 2023). The Cathode market holds the largest market share in Malaysia Lithium-Ion Battery Market by Material Type in 2016 and would continue to be a dominant market till 2023. The Anode market would attain a market value of $285.7 million by 2023. Additionally, The Electrolytic Solution market is expected to witness a CAGR of 14.1% during (2017 – 2023) [29].

The Asia-Pacific lead-acid battery market is anticipated to rise with the highest CAGR of 4.50%. The region also accounted for the highest revenue share in 2018 [30].

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Market Outlook

The growth in Asia Pacific battery market will be largely contributed by the development of large retailers/brands In the coming years. Continued growth in portable electronics and change in the global motor vehicle industry will not only have a strong impact on the types of battery materials being consumed, but also drive strong growth in battery materials demand in developing countries. The strongest growth will be posted in the Asia/Pacific region, as China further solidifies its position as the largest producer of batteries in the world. Other countries in the region, including South Korea and India, will also register strong growth in demand for battery materials [31].

China is the leading country, generating highest wind energy. The production of wind energy is expected to significantly increase over the years. Wind capacity output is likely to cross 200 GW by 2020, driving the demand for energy storage systems in the country, and as a result, it is expected to positively influence the demand for batteries. Increasing demand for mobiles and tablets in various countries including India, China, Japan and Thailand is expected to drive the demand for lithium-ion batteries during the forecast period. China has tremendous market potential due to increasing lithium-ion battery production. The government of the nation also has been offering favorable grounds with subsidies for electric vehicles, which is expected to create immense market potential over the forecast period [32].

While Li-ion is the faster-growing segment, lead-acid is the bigger market segment with most of the demand coming from automotive SLI battery. Telecom, household and industrial inverters, motives, and e-bikes are other key applications gaining momentum in the lead-acid segment due to rapid urbanization and initiatives to utilize renewable energy resources more efficiently, the analyst concludes [33].

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Technology Roadmap

The technological advancement in the battery has led to the discovery solid-state lithium-ion battery two years ago that can fully charge in just 7 minutes. Also, the promising discovery on line is Lithium sulphur batteries that can store a large charge. Similarly, the recent discovery of gold nanowire batteries has enabled to withstand more recharging than ever before, hundreds of times within their lifetime [34].

A new generation of energy-hungry electronic devices, such as digital cameras, camera phones and high-performance portable computing devices, will drive the growth. Electronic cigarettes (e-cigarettes) are another niche market with the potential to offer significant future growth.

Competitive Landscape

Looking at the competitive landscape, countries like Japan, China, South Korea are leading the market as the emerging battery companies in Asia-pacific region. Similarly, countries such as India, Australia have shown tremendous growth in the past few years.  The growth is coming from both automotive and industrial sectors powered by usage in telecom, railways, power and other industrial applications [35]. Also, Asia-Pacific solid-state battery market mainly covers the market of countries such as that of China, India, Japan, Australia and the rest. Investments from private organizations, utility of electric vehicles & rising adoption, booming research & development by the research institutions and initiatives taken by the multinational organizations for developing the solid-state battery technology are predominantly driving the regional market. Japan is expected to register the highest CAGR by the end of the forecast period thus is a market to watch out for over the forecast period with several multinational organizations such as Toyota Motor Corp, Nissan Motor Co. & Honda Motor Co. operating. Most of these companies are focused on developing next-generation solid-state batteries [36].

The competitive landscape in emerging battery companies of the region can also be understood by analyzing the categorization of primary and secondary batteries. Primary batteries are used once, then discarded. They have the advantage of the convenience and cost less per battery and generally, have a higher capacity and initial voltage than rechargeable batteries, and a sloping discharge curve. Most primary batteries do not presently require special disposal.  However, it comes along with a downside of costing more over the long term.

Secondary batteries are the rechargeable batteries and they have the advantage of being more cost-efficient over the long term. Although individual batteries are more expensive. Usually, secondary batteries have a lower capacity and initial voltage, a flat discharge curve, higher self-discharge rates and varying recharge life ratings. They usually have more active (less stable) chemistries which need special handling, containment, and disposal. Ni-Cd and small-size lead-acid batteries require special disposal and should not be simply thrown away [37].

Competitive Factors

Key factors on which companies compete are battery costs, meeting increasing demand from automotive, utilities, industrial sectors, consumer electronics, and wearable segments. Asia-Pacific is the largest market globally for batteries and is also rapidly growing its battery production. Competition is also seen in battery-related investments and for research and development of new and innovative battery technologies [38].

Likewise, the push for green power as a result of national mandates undertaken by governments in Asia-Pacific to reduce carbon emissions has also become a new competitive factor in the development of new battery chemistries and the betterment of existing ones [39].

Also, emerging technologies such as flexible batteries and aluminum-ion batteries, are expected to increase the competition.  [40].

Key Market Players

Some other established companies in the Asia-Pacific market include Front Edge Technology Inc., Dyson, Excellatron Solid State LLC, Hitachi Zosen Corporation, Imec, Infinite Power Solutions Inc. (Acquired By Apple Inc.), Panasonic Corporation, Prieto Battery Inc., Planar Energy Devices Inc., Brightvolt Incorporation, Robert Bosch, STMicroelectronics N.V., Cymbet Corporation, Solid Power Inc. and Toyota Industries Corporation.

  • Hitachi Zosen Corporation: It is a major Japanese industrial and engineering corporation. It produces waste treatment plants, industrial plants, precision machinery, industrial machinery, steel mill process equipment, steel structures, construction machinery, tunneling machines, and power plants along with batteries. It is headquartered at Osaka, Japan. The corporation had a revenue of $3,396.45 Million on march of 2018 [41][42].
  • Toyota Motor Corporation:Toyota Motor Corporation is a Japanese multinational automotive manufacturer and, as of September 2018, was the sixth-largest company in the world by revenue. It has formed a team of around 200 individuals who are working on developing an advanced solid-state battery, which they aim to install it in cars by the end of 2020. In the year 2018, the corporation had a revenue of US$265 billion[43][44].
  • Panasonic Corporation : It is a Japanese multinational electronics corporation headquartered in Kadoma, Osaka, Japan. Panasonic Corporation has grown to become one of the largest Japanese electronics producers. It offers a wide range of products and services, including air conditioners, refrigerators, washing machines, compressors, lighting, televisions, personal computers, mobile phones, audio equipment, cameras, broadcasting equipment, projectors, automotive electronics, aircraft in-flight entertainment systems, semiconductors, lithium batteries, electrical components, optical devices, bicycles, electronic materials and photovoltaic modules. In the fiscal year of 2018, Panasonic's revenue came to around $ 70.9 billion[45][46].
  • Front Edge Technology Inc. : Front Edge Technology Inc. is an American software company, focusing on the integration of secure web applications. The company sells its products worldwide through a direct sales force, distributors, value-added resellers and system integrators. In 2017, the company was acquired by Lotus Innovations Fund [47].
  • Robert Bosch GmbH: Robert Bosch GmbH is a world leading multinational engineering and electronics company. It is headquartered in Gerlingen, near Stuttgart, Germany. In the fiscal year of 2017, the company had a revenue of approximately $ 93.6 billion[48][49].

Strategic Conclusion

Asia Pacific region is expected to be an opportunistic market, and the region is expected to be top revenue generating region among others. Advancements in energy storage, distributed generation, electric vehicles, and consumer electronics are driving the growth of the battery market. In Asia pacific region, countries like Japan, China, South Korea are leading the market as the emerging battery companies. Similarly, countries such as India, Australia have shown tremendous growth in the past few years.  As the world becomes ever more dependent on batteries to power modern life, challenges are aplenty and it becomes critical to adopt increasingly diverse approaches to develop batteries for different segments. This is where emerging battery companies can pitch in.

References

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Further Reading

Appendix

Acronym

  • CAGR: Compound Annual Growth Rate
  • Li-ion: Lithium Ion
  • Na-ion: Sodium Ion
  • US$: US Dollar


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