India Vehicle Battery Market Outlook to 2028

India Vehicle Battery Market Overview

• The India vehicle battery market has shown significant growth over the past few years. In 2018, the market size was valued at approximately USD 2.5 billion. By 2023, this figure had surged to USD 5.9 billion, reflecting a compound annual growth rate (CAGR) of around 18.74%. This growth is primarily driven by the rising demand for electric vehicles (EVs) and the increasing adoption of energy-efficient technologies.
• The vehicle battery market in India is highly competitive, with several key players driving innovation and market growth. Notable companies include Exide Industries, Amara Raja Batteries, Luminous Power Technologies, HBL Power Systems, and Tata Green Batteries. These companies have established strong market presence through extensive distribution networks, robust product portfolios.
• A significant development in the market was the announcement by Tata Motors in 2023 about its collaboration with Tata Chemicals to establish a giga-factory for manufacturing lithium-ion batteries in Gujarat. This facility aims to support the increasing demand for electric vehicle batteries and reduce dependency on imports.
• Maharashtra has emerged as a dominant region in the vehicle battery market, primarily due to its well-established automotive industry and supportive government policies. In 2023, Maharashtra accounted for approximately 30% of the total market share, driven by substantial investments in EV infrastructure and battery manufacturing facilities.

India Vehicle Battery Market Segmentation

The India Vehicle Battery Market can be segmented based by battery type, vehicle type and region.

By Battery Type: The India vehicle battery market is segmented by battery type into lead-acid batteries, lithium-ion batteries, and nickel-metal hydride batteries. In 2023, lithium-ion batteries held the dominant market share due to their widespread use in electric vehicles, owing to their high energy density and longer lifespan.

By Vehicle Type: The market is segmented by vehicle type into passenger vehicles, commercial vehicles, and two-wheelers. In 2023, the two-wheeler segment held the dominant market share, driven by the high demand for electric scooters and motorcycles.

By Region: The market is segmented by region into North, South, East, and West. In 2023, the West region held the dominant market share, driven by the presence of major automotive hubs and supportive government initiatives.

India Vehicle Battery Market Competitive Landscape

• Exide Industries invested USD 100 million in 2024 to expand its R&D capabilities and develop next-generation battery technologies. The company aims to enhance the energy density and charging speed of its lithium-ion batteries, making them more competitive in the growing EV market.
• Amara Raja Batteries inaugurated a new manufacturing plant in Andhra Pradesh in 2024, with an annual production capacity of 5 GWh. This facility is equipped with advanced technology to produce high-performance alithium-ion batteries, catering to the increasing demand from the automotive and energy storage sectors.

India Vehicle Battery Market Analysis

India Vehicle Battery Market Growth Drivers

• Electric Vehicle Adoption: The growing adoption of electric vehicles (EVs) is a significant driver for the vehicle battery market in India. In 2024, the Indian EV market is projected to witness sales of over 2 million units, driven by increasing consumer preference for environmentally friendly transportation options and supportive government policies promoting EV usage.
• Expansion of Charging Infrastructure: The expansion of EV charging infrastructure is another crucial growth driver. By the end of 2024, India aims to establish 10,000 new public charging stations nationwide, significantly improving the convenience of EV charging for consumers.
• Technological Advancements in Battery Technology: Continuous advancements in battery technology, such as the development of solid-state batteries and improvements in energy density and charging speed, are driving the vehicle battery market forward. In 2024, several Indian companies are investing heavily in R&D to develop next-generation batteries that offer longer ranges and shorter charging times.

India Vehicle Battery Market Challenges:

• Raw Material Dependency: India's dependency on imported raw materials for battery production, particularly lithium, poses a significant challenge. In 2024, India is expected to import lithium worth USD 1.3 billion, exposing the market to global supply chain disruptions and price volatility. This dependency hinders the market's growth and calls for the development of alternative materials and domestic production capabilities.
• High Battery Costs: The high cost of vehicle batteries remains a major barrier to widespread EV adoption. In 2024, the average cost of a lithium-ion battery pack in India is around USD 140 per kWh, making EVs more expensive than traditional internal combustion engine vehicles.

India Vehicle Battery Market Government Initiatives:

• National Battery Storage Program: In 2024, the Indian government launched the National Battery Storage Program, investing INR 18,000 crores to boost domestic battery manufacturing capabilities. This initiative aims to reduce the country's dependency on imported batteries and promote the development of advanced battery technologies, supporting the growth of the vehicle battery market.
• FAME India Scheme Phase II: The FAME India Scheme Phase II continues to play a pivotal role in promoting EV adoption. In 2024, the scheme received an additional funding of INR 10,000 crores to provide subsidies for EV purchases, support the development of charging infrastructure, and encourage local manufacturing of EV components, including batteries.

India Vehicle Battery Market Outlook

India Vehicle BatteryMarket is expected to grow significantly by 2028 along with a respectable CAGR from 2023 to 2028, driven by increasing technological advancements & expansion of online retail. 

Future Trends

• • Increasing EV Adoption: Over the next five years, the adoption of electric vehicles in India is expected to accelerate, driven by supportive government policies, improved charging infrastructure, and advancements in battery technology. By 2028, it is estimated that EV sales will exceed 5 million units annually.
  • Growth in Domestic Battery Manufacturing: India's domestic battery manufacturing capacity is projected to grow substantially over the next five years. With government initiatives like the PLI scheme and increased investments from major players, the country's annual battery production capacity is expected to reach 50 GWh by 2028.