The automotive industry has experienced a significant surge in the adoption of electric vehicles (EVs) in recent years. These vehicles are designed to operate efficiently; however, they face certain limitations in terms of battery efficiency, lifespan, and cost. To address these challenges and enhance the overall performance of EVs, the automotive battery thermal management system (BTMS) plays a critical role. BTMS manages various aspects of the battery, including protecting it from external environmental factors and regulating its thermal behavior. Given the crucial function of BTMS in EVs, the global automotive battery thermal management system market is expected to witness robust demand in the near future. With a market size of US$666 million in 2020, the market is projected to grow at an impressive compound annual growth rate (CAGR) of nearly 36% during the forecast period (2021-2026). The soaring demand for high-performance, fuel-efficient vehicles, coupled with favorable government initiatives like the California Zero Emission Vehicle Program (ZEV), which aims to achieve 1.5 million ZEV cars by 2025, will drive the growth of the automotive battery thermal management system market.
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Sales in Automotive Battery Thermal Management System Market Accelerate with Pro-EV Regulatory Frameworks
Governments worldwide have implemented stringent strategies to promote the adoption of electric vehicles. For instance, in 2013, the Chinese government introduced subsidies for plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs). The subsidies varied based on the driving range of the vehicles and gradually decreased over time. Similar supportive regulations and incentives have been adopted in several other countries, encouraging the sales of EVs and boosting the global automotive battery thermal management system market.
Design Complications Dampen Demand in Automotive Battery Thermal Management System Market
The design of thermal components in automotive battery thermal management systems presents certain challenges that need to be overcome. These complexities include verifying thermal designs, optimizing flow channels, reducing power requirements, and minimizing the overall weight and cost of the vehicle. Additionally, the high power generated by the batteries can result in increased temperatures, which pose safety risks such as short circuits and fires. Addressing these fundamental design challenges is essential for the sustained growth of the global automotive battery thermal management system market.
Phase-out of ICE Vehicles Creates Opportunity for Automotive Battery Thermal Management System Market Players
Several countries, including Norway, the UK, Canada, the Netherlands, and soon California, have officially declared plans to phase out conventional internal combustion engine (ICE) vehicles within the next few years. This transition presents a lucrative revenue generation opportunity for various stakeholders in the electric vehicle industry, including EV manufacturers, original equipment manufacturers (OEMs), battery technology companies, and automotive BTMS manufacturers. The phase-out of ICE vehicles serves as a significant growth driver for the automotive battery thermal management system market.
Asia Pacific Leads Automotive Battery Thermal Management System Market with Favorable Government Initiatives
The Asia Pacific region dominates the global automotive battery thermal management system market, accounting for over 60% of the market revenue in 2020. Fast-developing economies such as China, Japan, India, and South Korea have emerged as major hubs for automobile production. The region has witnessed a surge in demand for EVs in recent years, with significant investments from companies like Mitsubishi and BAIC Motor Corp. driving the market growth. Following Asia Pacific, North America and Europe also show substantial potential for the automotive battery thermal management system market due to the increasing demand for alternative fuel vehicles.
Passenger Vehicles Continue to Register Maximum Uptake in Automotive Battery Thermal Management System Market
Passenger vehicles represent the largest segment in the automotive battery thermal management system market. With the expanding market for electric vehicles and alternative fuel vehicles such as hydrogen vehicles, bio-diesel vehicles, and propane vehicles, passenger vehicle manufacturers are experiencing robust sales. The preference for private conveyance over public transport, along with an increasing number of first-time car buyers considering EVs, contributes to the dominance of passenger vehicles in the market. This trend presents significant opportunities for companies operating in the global automotive battery thermal management system market.
Contracts and Partnerships Drive Competition in Automotive Battery Thermal Management System Market
The automotive battery thermal management system market is highly competitive, with several key players leading the industry. Companies such as MAHLE GmbH, VOSS Automotive GmbH, Dana Limited, Continental AG, LG Chem, and Robert Bosch GmbH have established dominant market positions. These companies have strengthened their market shares through various strategies, including entering into contracts, agreements, and establishing new production plants. Other prominent players in the global automotive battery thermal management system market include BYD Company Ltd, Contemporary Amperex Technology Co., Limited (CATL), Valeo, Calsonic Kansei Corporation, Gentherm Incorporated, Samsung SDI Co., LTD., Hanon Systems, and Grayson Thermal Systems.
Recent Notable Developments
In October 2015, LG Chem and Tesla Motors signed a contract to upgrade the Roadster with battery improvement and replacement, leading to increased demand for LG Chem's products.
In November 2015, Gentherm Incorporated expanded its production capabilities by opening a new manufacturing plant in Mexico, focusing on seat comfort and industrial products.
In December 2015, LG Chem supplied EV batteries that powered the Chevrolet Bolt, demonstrating a successful partnership between the two companies.
The automotive battery thermal management system market faced a temporary decline in sales during the global COVID-19 pandemic due to the impact on the electric vehicle industry. However, as the industry recovers, the automotive thermal battery management system market is expected to regain momentum and continue its growth trajectory.
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