Automotive Battery Market Growth Drivers, Challenges and Opportunities

Automotive Battery Industry Size, Share and Key Drivers

The automotive battery market is set to grow from USD 98.63 billion in 2025 to USD 462.10 billion by 2034, with an expected CAGR of 18.72% over the forecast period from 2025 to 2034.

Unlock Infinite Advantages: Subscribe to Annual Membership

Introduction

The automotive battery market is a prominent branch of the automotive industry. This industry deals in manufacturing and distribution of batteries for the automotive sector. There are several types of batteries developed in this sector comprising of lithium-ion based, lead-acid based, nickel based, sodium-ion and some others. These batteries are designed for different types of vehicles consisting of passenger cars, commercial vehicles, and some others. The growing sales of BEVs in different parts of the world has boosted the market expansion. This market is expected to rise significantly with the growth of the electric vehicle industry around the world.

• According to the SMMT, around 48388 BEVs were registered in the UK in 2024 that increased to 69313 in 2025.

Highlights of the Automotive Battery Market

• North America held the highest share of the automotive battery market.
• Asia Pacific is expected to grow with the highest CAGR during the forecast period.
• By type, the lead-acid battery segment held the largest share of the market.
• By type, the sodium-ion battery segment is anticipated to rise with a significant CAGR during the forecast period.
• By drive, the Electric Vehicles (EV) segment dominated this industry.
• By drive, the Internal Combustion Engine (ICE) vehicles segment is predicted to rise with a considerable CAGR during the forecast period.
• By vehicle, the passenger cars segment led the industry.
• By vehicle, the commercial vehicle segment is likely to grow with a significant rate during the forecast period.

Key Metrics and Overview

Automotive Battery: Stats and Figures

• According to the International Energy Agency, the EV battery demand of China reached 417 GWh/year in 2023.
• According to the OICA, around 49996 heavy trucks were registered in Spain during 2024.
• According to the Malaysian Automotive Association, around 799,731 vehicles were registered in Malaysia during 2023.
• According to the Engine Technology Forum, around 3,920,000 vehicles were sold in the U.S. during the 1st quarter of 2025.

Vehicle Insights

The passenger cars segment led the industry. The growing demand for luxury cars among elite class people has boosted the market expansion. Also, the increasing sales of electric hatchbacks coupled with rapid adoption of SUVs by off-roading enthusiasts is further contributing to the industrial growth. Additionally, rising trend of fuel-efficient cars in mid-income nations such as India, Vietnam, Indonesia and some others is expected to drive the growth of the automotive battery market.

• In May 2025, Maruti launched Wagon R in India. This car is expected to deliver a mileage of around 24 kmpl.

The commercial vehicle segment is likely to grow with a significant rate during the forecast period. The growing demand for heavy duty trucks from several industries such as oil and gas, chemicals, logistics and some others has boosted the market expansion. Additionally, the increasing adoption of LCEVs in e-commerce sector along with rise in number of fleet operators is further adding to the industrial growth. Moreover, surge in demand for electric buses and autonomous trucks in western nations such as UK, France, Germany, U.S., UAE and some others is likely to boost the growth of the automotive battery market.

• In April 2025, IKEA launched a heavy-duty truck. This truck is designed for operating several tasks in several industries such as chemicals, oil and gas, logistics and some others.

Type Insights

The lead-acid battery segment held the largest share of the market. The rising use of lead-acid batteries in ICE vehicles for operating various tasks is driving the market expansion. Also, the growing adoption of lead-acid batteries in commercial vehicles along with numerous partnerships among automotive brands and battery manufacturers for developing advanced lead-acid batteries is contributing significantly to the industrial growth. Moreover, numerous advantages of these batteries including low-cost, high-power output, mature technology and some others is projected to foster the growth of the automotive battery market.

• In June 2023, Schaeffler India Limited launched TruPower 2-Wheeler Batteries. These batteries are designed using VRLA (Valve Regulated Lead Acid) technology to deliver superior power output.

The sodium-ion battery segment is anticipated to rise with a significant CAGR during the forecast period. The rising use of these batteries in electric vehicles to deliver superior driving range has boosted the market growth. Additionally, constant research and developments by institutions for developing sodium-ion batteries is further adding to the overall industrial expansion. Moreover, the geopolitical tensions among China and the U.S. have disturbed the supply chain of lithium-ion batteries that in turn increases the demand for sodium-ion batteries, thereby driving the growth of the automotive battery market.

• In February 2024, Sodion Energy launched a new range of sodium-ion batteries in India. These batteries are used in different types of vehicles.

Drive Insights

The Electric Vehicles (EV) segment dominated this industry. The growing sales and production of EVs around the world has boosted the market expansion. Additionally, numerous government initiatives aimed at adopting EVs along with rapid investment by various public-sector entities for developing the EV charging infrastructure is likely to shape the industry in a positive direction. Moreover, partnerships and collaborations among EV brands and battery manufacturers for developing EV batteries is further driving the growth of the automotive battery market.

• In March 2025, Suzuki announced partnership with Tata Gotion, FinDreams and ELIIY Power. This partnership is done for manufacturing EV batteries at a large scale in India.

The Internal Combustion Engine (ICE) vehicles segment is predicted to rise with a considerable CAGR during the forecast period. The growing sales of gasoline-powered passenger vehicles has increased the demand for lithium-ion batteries, thereby fostering the industrial expansion. Additionally, the rising use of lead-acid batteries in diesel trucks along with technological advancements in battery manufacturing sector has boosted the market growth. Moreover, rapid investment by battery companies for opening new battery manufacturing plants to cater the needs of the ICE vehicles is further accelerating the growth of the automotive battery market.

• In June 2024, ProLogium launched a new range of lithium-ion battery. These batteries finds application in different models of ICE vehicles.

Geographical Insights

North America held the highest share of the automotive battery market. The growing adoption of electric vehicles in countries such as Canada and the U.S. for lowering emission has boosted the market expansion. Additionally, the rising demand for high-performance cars along with rapid investment by battery companies for opening new manufacturing facilities is further adding to the industrial growth. Moreover, the presence of several automotive brands such as Ford, Chevrolet, Jeep and some others is anticipated to foster the growth of the automotive battery market in this region.

• In February 2025, Toyota announced to open a EV battery manufacturing plant in the U.S. This battery production facility is inaugurated with an investment of around US$ 14 billion.

U.S. dominated the market in this region. The growing demand for luxury vehicles along with numerous government initiatives to develop the automotive sector has boosted the market growth. Additionally, the presence of several EV manufacturing brands such as Tesla, Rivian, General Motors and some others is contributing to the industrial expansion.

• In May 2025, General Motors launched Chevy Silverado EV. Chevy Silverado EV is powered by a lithium manganese-rich (LMR) prismatic EV battery cells that is expected to deliver a driving range of around 492 miles on a single charge.

Asia Pacific is expected to grow with the highest CAGR during the forecast period. The rising sales and production of vehicles in several nations such as India, China, Japan, South Korea and some others has boosted the market growth. Also, the rapid developments in the battery manufacturing industry coupled with increasing adoption of hybrid vehicles is adding to the industrial expansion. Moreover, the presence of several market players such as Panasonic Holdings Corporation, LG Energy Solution Ltd., Samsung SDI; and some others is likely to boost the growth of the automotive battery market in this region.

• In July 2024, LG Energy Solution partnered with Hyundai Motor Group. This partnership is done for opening a new EV battery plant in Indonesia.

China leads the market in this region. In China, the market is generally driven by the rising sales of commercial vehicles along with abundance of raw materials and availability of skilled labors. Additionally, the presence of well-developed battery industry with various market players such as CALB, CATL, A123 Systems, BYD and some others is projected to foster the market growth.

Industry Leader Announcement

• In June 2024, H.S. Bhatia, the Managing Director of Daewoo India made an announcement stating that, “Our batteries are manufactured using the best grade materials, including pure lead, PP container lids, separators, and chemicals, making them ideal for the diverse weather conditions of India. With our expanded metal grid technology and low self-discharge rates, DAEWOO batteries will set new benchmarks in performance and reliability."

Competitive Landscape

The automotive battery market is a highly fragmented industry with the presence of a several dominating players. Some of the prominent companies in this industry consists of CATL, Panasonic Corporation; LG Energy Solution.; Exide Technologies; GS Yuasa International Ltd.; A123 Systems (Wanxiang A123 Systems Corp.); East Penn Manufacturing Company; Robert Bosch GmbH; ENERSYS.; Samsung SDI; Hitachi, Ltd and some others. These companies are constantly engaged in developing batteries for the automotive sector and adopting numerous strategies such as business expansions, collaborations, launches, partnerships, acquisitions, joint ventures, and some others to maintain their dominant position in this industry. For instance, in April 2025, Hitachi partnered with JBM Electric Vehicles. This partnership is aimed at integrating Hitachi’s batteries in JBM’s electric buses. Also, in October 2024, SAMSUNG SDI launched a new range of automotive batteries. This new line-up consists of solid-state batteries, 46-phi cylindrical batteries, and LFP+ batteries.

Recent Developments

• In April 2025, CATL launched a sodium-ion battery for the automotive sector. This battery is designed for modern EV manufacturers including Mercedes-Benz, Tesla, BMW and Volkswagen.
• In March 2025, BYD launched an EV battery. This battery is expected to deliver a driving range of 400 kms on 5 minutes charging.
• In February 2025, Satya International collaborated with Duracell. This collaboration is done for launching automotive batteries in Africa and Asia.

Automotive Battery Market Segments

By Type

• Lithium-ion Based
• Lead-acid Based
• Nickel Based
• Sodium-ion
• Others

By Drive

• ICE
• Electric Vehicle
• BEV
• PHEV

By Sales Channel

• Passenger Cars
• Commercial Vehicles
• Others

By Region

• North America
• Latin America
• Europe
• Asia Pacific
• Middle East and Africa