The Malaysia battery market is expected to grow at a CAGR of more than 6.6% over the period of 2020-2025. Factors such declining lithium-ion battery prices along with increasing demand for lead-acid batteries is expected to drive the Malaysia battery market during the forecast period. However, the country relies on pumped hydro storage rather than battery storage systems. This factor, in turn, is likely to hinder the growth of battery-based energy storage systems and the battery market in the coming years.
- The lead-acid battery type is expected to dominate the market during the forecast period.
- With the improvement in battery technology and increasing importance of clean and green fuel, the automotive industry in Malaysia is expected to create more opportunity for lithium-ion batteries.
Key Market Trends
Lead-acid Battery to Dominate the Market
- In 2018, the Malaysian automotive industry contributed about MYR 40 billion or ~4% to Malaysia's GDP, with a workforce exceeding 600,000. The huge share of GDP makes it the most important sector for the Malaysian economy. The automotive sector consists of 27 vehicle manufacturers.
- In 2018, the production of passenger cars and motorcycles increased to 522,392 and 465,083 units respectively, registering a growth of 13.67% and 5.59%, respectively, as compared to 2017.
- As of 2018, lead-acid battery types, such as valve-regulated lead-acid (VRLA) and flooded batteries, dominated the automotive market share in the country.
- Malaysia is an important contributor to automobile manufacturing in ASEAN. In 2018, Malaysian automobile manufacturers produced a total of 572,000 vehicles (passenger and commercial vehicle), with 522,392 of them being passenger cars. But Malaysia's automotive manufacturing landscape is sharply divided between domestically produced vehicles and its foreign competitors.
- The increase in production has boosted the demand for the lead-acid batteries for application in SLI batteries and is expected to increase during the forecast period owing to the increase in demand of vehicles and the decline in the cost of batteries due to the establishment of manufacturing facilities promoted by the government incentives and policies.
- Therefore, factors such as increasing demand from the automotive sector along with the plans to set up lead-acid battery manufacturing facilities in the country are expected to drive the lead-acid battery segment during the forecast period.
Electric Vehicles to Drive the Lithium-Ion Battery Market
- The penetration of electric vehicles is anticipated to provide a massive impetus for the lithium-ion battery market's growth. The amount of listed EVs increased from an estimated 100 units in 2013 to 52,384 units as on March 31, 2019, but the figure represents only a fraction of the 28.2 million vehicles registered in the country, The EVs in the country are being imported as of now, but the number is expected to grow substantially, once the local manufacturing of EV starts in the country.
- The lithium-ion battery for application in EV is still in the nascent phase, due to the lack of charging infrastructure and technology available within the country.
- Therefore, in a bid to increase the share of EV in the country, the government in Malaysia has already started an effort to promote the EV growth in the countries with polices, like NAP 2019.
- The government is trying to promote the investment from foreign companies to set up the lithium-ion manufacturing plants, by providing incentives and tax reduction on the investment.
- According to the plan by MIER, the land to set up the manufacturing plant is being identified and the EV is likely to be manufactured using the Japanese technologies.
- The demand for EV fostered by the local manufacturing is likely to grow after 2021, and it is expected to increase the demand for lithium-ion batteries thereafter.
The Malaysia battery market is partially consolidated. Some of key players in this market include FIAMM Energy Technology S.p.A., GS Yuasa Corporation, ABM Fujiya Berhad, YOKOHAMA BATTERIES SDN. BHD., and Leoch Battery Corporation.
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