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Australia Battery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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  • 90 Pages
  • January 2022
  • Region: Australia
  • Mordor Intelligence
  • ID: 5480406
UP TO OFF until Jun 30th 2023

The Australia battery market was valued at USD 1,002.9 million in 2020, and it is expected to reach USD 1,569.9 million by 2026, registering a CAGR of about 8.41% during the forecast period of 2021-2026. The COVID-19 pandemic had an insignificant impact on the market since the demand decreased from conventional applications, such as automotive and telecom. However, this was slightly compensated by the consumer batteries, small-scale and large-scale ESS deployments in the country. Factors, such as increasing demand from supportive government policies and industrial, consumer electronics, and electric vehicle applications, are expected to drive market growth. Moreover, the increasing penetration of renewable energy is expected to increase demand for energy storage systems, eventually driving the battery market during the forecast period. However, the lack of activities and development in various stages (except for mining) of the supply chain of battery production is expected to restrain the market potential during the forecast period.

Key Highlights

  • In terms of application, SLI batteries have the majority share and are likely to remain the majority shareholder due to their large-scale application in the automotive sector. Therefore, SLI batteries are expected to dominate the battery market during the forecast period.
  • New advancements in battery technologies are expected to create immense opportunities for the Australian battery market in the coming years.
  • Large domestic reserves of battery minerals are expected to drive the Australian battery market growth during the forecast period.

Key Market Trends

SLI Battery 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, preventing them from damaging other components of 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 are the increasing demand for these batteries to the power starter motor, lights, ignition system, or other internal combustion engines with high performance, long life, and cost-efficiency. There are two main battery types for SLI - lead-acid and lithium-ion batteries.
  • In Australia, the lead-acid battery is the technology of choice for all SLI battery applications in conventional combustion engine vehicles, such as cars and trucks. Lead-acid batteries are the most economically viable mass-market technology for SLI applications in traditional vehicles, including those with start-stop and basic micro-hybrid systems, owing to their excellent cold cranking performance, reliability, and low cost. All automotive SLI batteries are lead-acid based and over 90% (by storage capacity) of industrial stationary and motive applications.
  • According to the Federal Chamber of Automotive Industries (FCAI), 916,968 vehicles were sold in Australia in 2020, down by 13.7%, compared to 2019, when 1,062,867 vehicles were sold. The decline was mainly due to the COVID-19 pandemic, which led to the temporary shutdown of the manufacturing facilities. However, the automotive market is showing signs of recovery as December 2020 recorded 95,652 sales, a 13.5% increase over the same period in 2019. This recovery was attributed to the entry of new automotive brands and models into the market. For instance, Bentley launched its Flying spur mulliner, a new plug-in hybrid car with various sports-focused models packed with equipment, increasing demand for SLI batteries in Australia.
  • Therefore, based on the above-mentioned factors, SLI battery application is expected to dominate the Australian battery market during the forecast pperiod.

Large Domestic Reserves of Battery Metals Driving the Market Demand

  • Australia is naturally gifted with enormous mineral wealth. The country has one of the largest reserves of metals such as lithium, nickel, and cobalt, which are critical for producing and manufacturing modern batteries. Australia has historically had a strong mining industry, and the proper extraction, enrichment, and utilization of these vast reserves of rare earth metals are expected to drive the Australia Battery market during the forecast period.
  • According to the United States Geological Survey data, Australia has the 2nd largest cobalt reserves globally but accounts for only 4% of the global production of cobalt. However, most of the world’s cobalt production comes from DR Congo, and most of the mines in Congo are owned by Chinese mining companies. Moreover, there are many ethical and environmental concerns, such as forced labor and child exploitation regarding mining in DR Congo. Due to this, many North American and European battery manufacturers are trying to diversify their supply chain by signing strategic agreements with Australian mining companies to secure their cobalt supply.
  • In August 2021, LG Energy, a subsidiary of South Korean electronics giant LG Chem, signed a six-year agreement with Australian mining company Australian Mines Limited starting from the end of 2024, with an option to extend the contract by another five years by mutual agreement. The agreement involves a deal to purchase 71,000 dry metric ton of nickel and 7,000 dry metric ton of cobalt and is expected to be sourced from Australian Mines’ USD 1.5 billion Sconi Project based in Queensland.
  • Australia is also the world’s largest producer and exporter of lithium. Lithium is the most important component for the manufacture of batteries used for energy storage and electric vehicles. Most of the lithium is exported as spodumene concentrate, which requires further processing. Several Australian mining companies are starting to collaborate with foreign companies to commercially set up lithium extraction and enrichment plants to produce battery-grade lithium in Australia.
  • In August 2021, Australia’s IGO and lithium joint venture partner Tianqi Lithium produced the first lithium hydroxide at their Kwinana refinery in Western Australia, the first of its kind in the country. The factory has started operating its first production train, Train 1, which is expected to reach its design production rate of 24,000 mt/year lithium hydroxide by the end of 2022. In September 2021, Covalent Lithium announced a project to construct a new world-class 50,000-metric ton lithium hydroxide refinery in Kwinana.
  • Therefore, these large-scale lithium refining projects are expected to strengthen Australia’s domestic battery supply chain and drive the Australian battery market during the forecast period.

Competitive Landscape

The Australia battery market is fragmented. Some of the major players include Century Yuasa Batteries Pty Ltd, Enersys Australia Pty Ltd, Robert Bosch (Australia) Pty Ltd, Exide Technologies, and Sonnen Australia Pty Limited.

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Table of Contents

1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
4.1 Introduction
4.2 Market Size and Demand Forecast in USD million, till 2026
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.5.1 Drivers
4.5.2 Restraints
4.6 Supply Chain Analysis
4.7 PESTLE Analysis
5.1 Technology
5.1.1 Li-ion Battery
5.1.2 Lead-acid Battery
5.1.3 Other Technologies
5.2 Application
5.2.1 SLI Batteries
5.2.2 Industrial Batteries (Motive, Stationary (Telecom, UPS, Energy Storage Systems (ESS), etc.)
5.2.3 Portable Batteries (Consumer Electronics, etc.)
5.2.4 Automotive Batteries (HEV, PHEV, EV)
5.2.5 Other Applications
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Century Yuasa Batteries Pty Ltd
6.3.2 Enersys Australia Pty Ltd
6.3.3 Robert Bosch (Australia) Pty Ltd
6.3.4 Exide Technologies
6.3.5 VARTA AG
6.3.6 Sonnen Australia Pty Limited
6.3.7 Soluna Australia Pty Ltd
6.3.8 Battery Energy Power Solutions Pty
6.3.9 R & J Batteries PTY LTD
6.3.10 PMB Defence
6.3.11 East Penn Manufacturing Company
6.3.12 Energy Renaissance Pty Ltd
6.3.13 Crystal Solar Energy

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Century Yuasa Batteries Pty Ltd
  • Enersys Australia Pty Ltd
  • Robert Bosch (Australia) Pty Ltd
  • Exide Technologies
  • Sonnen Australia Pty Limited
  • Soluna Australia Pty Ltd
  • Battery Energy Power Solutions Pty
  • R & J Batteries PTY LTD
  • PMB Defence
  • East Penn Manufacturing Company
  • Energy Renaissance Pty Ltd
  • Crystal Solar Energy