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Lead Acid Battery Manufacturers Look to Target Emerging Markets Owing to Resurgent Automotive Sector in the Region

Press Release   •   Feb 15, 2016 07:18 EST

Lead acid batteries are being increasingly used for forklifts, however, as concerns regarding the environmental impact increase, safer and more effective alternatives are being sought by end-use industries.

The automobile industry is one of the largest end-use industries for lead acid batteries. The lead acid batteries are used for “stop start” in automobiles. Although environment concerns have led to demands for replacing these batteries with lithium-ion batteries, practical challenges, such as fuel efficiency and carbon emissions have meant that lead acid batteries continue to be favoured by manufacturers.

The use of lead acid batteries in uninterrupted power supply (UPS) is another factor that is anticipated to fuel their demand in the near future. Although lead acid batteries are heavier than lithium-ion batteries, the latter is more suitable for use in residential applications. Commercial spaces are better off with using lead acid batteries, as they have the capacity of sustaining high loads.

Lead acid battery market is going through a period of transition, as demand for advanced lead acid batteries is growing. As discussed previously, environmental concerns are one of the biggest reasons why lead acid batteries are being slowly phased out in many industries. Lead and sulphuric acid can pose serious health risks in case of continued exposure. Owing to these factors, it is expected that the lead acid battery manufacturers will have to innovate to stay relevant in the near future.

Governments in developed regions of the world, including North America and Europe have put stringent regulations in place to limit the use of lead in the manufacturing industries. Owing to these factors, lead acid battery manufacturers are looking to tap into the emerging nations.

Regulations regarding the use of lead are not as stringent in emerging nations as they are in the developed world. China is one of the largest producers of lead acid batteries, and it is expected that the status quo will remain unchanged in the near future as well.

The global lead acid battery market is expected to reach US$ 58 Bn by 2020, witnessing an incremental value of around US$ 14 Bn during the forecast period. The use of lead acid batteries in end-use industries can be broadly categorised into transportation, industrial, commercial, residential, and grid storage.

As discussed previously, transportation and industrial segments account for the bulk of the demand for lead acid batteries. These two segments collectively account for over half of the share in terms of revenue.

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One of the key factors pushing the demand for lead acid batteries in the automotive sector is the strong demand for emerging countries, especially China and India. These two countries have been witnessing strong growth rates in the last decade or so, and this has resulted into the emergence of a burgeoning middle class in these two countries.

The emerging middle class is creating demand for automobiles as many consumers are yet to buy their first cars. This is in stark contrast to the automotive market in developed regions, where demand has plummeted over the years, especially since the financial crisis of 2007-08.

The resurgence in the automotive sector has created growth opportunities for lead acid battery manufacturers. It is expected that the resurgent automotive sector will continue to create demand in the lead acid battery segment in the near future as well.

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