India’s lead battery sector to rely on used cars for short term

India’s lead battery sector to rely on used cars for short term

India’s lead battery sector to rely on used cars for short term 150 150 Batteries International

December 30, 2021: As many countries shift towards restricting new car sales to electric vehicles, the lead battery market in India is seeing huge potential in the used car industry, which is expected to have more than 7 million by 2025, almost double the size of the sector in 2020-21.

Quoting the OLX Autos-Crisil Study 2021, ILZDA said the pre-owned car market was expecting growth in 2022 with ‘the Covid-19 pandemic, digitalization, changing demographics and aspirations, first-time buyers, and availability of financing options acting as growth drivers’.

“The pre-owned market has been outpacing the new car market and the industry is expected to clock a healthy growth rate of 15% in FY22,” the report says.

Indian publication Autocar India said on December 13 that car maker Kia had confirmed it would set up a used car business in the country next year when its new cars would be around three years old ± about the age when some cars begin needing new batteries.

Autocar India says Kia’s Seltos model is turning three years old — “so the carmaker wouldn’t want to lose the customers who are looking to replace the SUV with rival brands. Hence, setting up its own used car business will help Kia with conquest sales,” it says.

Another major market for lead batteries in India is the two and three-wheeler sectors, which are still opting for lead batteries rather than lithium-ion.

According to a report by the magazine Swarajya, companies such as Amara Raja and Exide Industries are reluctant to move too early into wide-scale lithium battery production, partly because of the investment needed to set up plants, partly because of the continuing demand for lead batteries. However, the move is more a case of when than if.

“The EV market is still nascent, and the technology is still evolving,” it says. “Therefore, moving in too quickly to capitalize on the opportunity could mean low returns for years, before EVs become mainstream.

“While battery companies have accepted the shift to EVs, they still remain cautious about moving in too early.”

The magazine quotes Exide Industries’ CEO Subir Chakraborty as saying his company had been operating for 75 years of the 100 that lead-acid batteries had been on the market, “so I don’t think that lead-acid batteries would be scooped out by lithium-ion one fine morning.”

The Indian government has set a target for at least 65% of all new vehicle sales to be electric by 2030, says ILZDA.