Europe Battery Systems for Electric Vehicles Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The Europe Battery Systems Market was valued at USD 10.11 Billion in 2021 and is expected to reach USD 23.12 Billion by 2027, registering a CAGR of 15.01% during the forecast period , 2022-2027.
The COVID-19 had a very adverse impact on the Europe battery systems market caused by manufacturing shutdowns, lockdowns, and trade restrictions. Furthermore, the fall in automotive production, reduction in automobile sales due to travel restrictions, and lack of labor adversely impacted the market. Since automotive manufacturers have resumed operations due to steadily rising automobile sales in countries with a limited number of COVID-19 cases, the market is likely to recover during the forecast market.
Furthermore, the manufacturers are implementing contingency plans to mitigate future business uncertainties to retain continuity with clients in the critical sectors of the automobile industry. For instance, in 2021 Europe saw 2.27 million electric vehicle sales up from 1.36 million in 2020, registering a growth of 66.91% on a Year on Year basis.
Over the long term, increasing investments in R&D by major industry players, setting up of new battery manufacturing plants and a rise in sales of electric and hybrid vehicles as well as strong incentives from the government for promoting elctromobility are creating demand in the automotive and transportation industry with a surge in sales of battery systems for electric vehcies. High cost of battery electric vehicles and heavy investment needed to set up battery gigafactories are some of the major
Key players in the market are expanding their production capacity to cater to the increased demand for battery systems. For instance, in May 2022 BMW Group announced to start the production of battery cells at their Parsdorf plant in Germany , by late 2022. In July 2022, Daimler SE said thet it will set up eight new battery manufacturing plants in the world, including four in Europe as a part of its USD 47 billion plan to go all electric by 2030.
Germany and Sweden are the next two largest markets for battery systems for electric vehicles due to the rapidly rising electric vehicle sales and major investments by battery manufacturers to set up battery gigafactories in these countries.Norway is the largest market by value because 86% of the new vehicles sold in Norway in 2021 were battery electric vehicles. Government incentives to elcetric vehicles are further expected to support market growth.
Key Market TrendsDemand for Electric Vehicles Vehicles will Drive Demand in the RegionThe electric vehicle market in Europe is expanding rapidly in sales as consumers are seeking environmentally friendly vehicles which offer very low running costs. For instance, Europe saw 2.27 million electric vehicle sales in 2021 up from 1.36 million in 2020, registering a growth of 66.91% on a Year on Year basis. This potential shift in the consumer preferences driven by stringent automotive emission norms, government incentives to promote electromobility, and very high levels of environmental consciousness amongst vehicle buyers in markets like Scandinavian countries, Germany, the Netherlands, France, and the U.K. have been responsible for this phenomenal rise in the popularity of electric vehicles.
Li-ion battery likely to be dominated the market during the forecast period. Li-ion batteries are more eco-friendly, last longer and offer good driving range for EVs than lead acid batteries. For instance, 90% of battery electric vehicles sold in Europe in 2021 were powered by Li-ion batteries. Thus new innovations in the elctromobilty, adoption of stringent automotive emission norms and fuel efficiency standards, government incentives for the sales of electric vehicles and setting up of many new gigafactories in the region the market for electric vehicle battery systems is expected to grow over the forecast period. For instance,
Germany segment of the market studied expected to hold significant share in the market during the forecast period. Various German automotive companies have made huge investments in electric vehicle technology, which includes batteries and related components which is expected to drive the country’s EV battery management system market in the forecast period.
Germany and Sweden are also major markets for elctric vehicle battery systems due to strong government incentives provided for purchasing electric vehicles, major investments into battery manufacturing and presence of startups entering the electric vehicle battery systems market. Thus, with companies coming up with new investments in this segment, the market forbattery systems for electric vehicles is expected to grow over the forecast period for the market. For instance,
Although Germany was a slow bloomer in its pro-electric plans, initially, it is introducing strategies to match the stricter emission standards. Electric mobility plays a central role in the federal government's climate protection program, which aims to achieve its 2030 climate targets mainly through transportation innovation. The country is introducing incentives and investments, like purchase grant, ownership tax, and company car tax, to promote clean cars. Such developments and trends in the market anticipated to enhance overall growth of German market during the forecast period.
Competitive LandscapeThe Europe battery systems for an electric vehicle are moderately consolidated. The market is characterized by the presence of large players who have secured long-term supply contracts with major automotive OEMs as well as some startups which have secured fresh funding to set up battery manufacturing plants. These players also engage in joint ventures, mergers and acquisitions, new product launches, and product development to expand their brand portfolios and cement their market positions.
Some of the major players dominating the European market are LG Energy Solution, Samsung SDI, CATL, Panasonic Corp., and Northvolt AB. Key players are expanding their production capacity and entering into long-term contracts with EV manufacturers to secure their market position and stay ahead of the market curve. For instance,
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