The South Africa battery market is expected to grow at a CAGR of more than 7.5% during 2020 - 2025. South Africa's battery market is mainly driven by growth in the industrial sector, increasing demand for consumer electronics, and rising fuel-saving initiatives. Factors such as the emergence of new and exciting markets, i.e., electric vehicle and falling of battery prices are expected to be the major drivers for the battery market in South Africa. However, the lack of domestic manufacturing facilities and increasing raw materials prices is likely to hinder the growth of the battery market during the forecast period.
- The lithium-ion segment is expected to witness significant in the South Africa battery market during the forecast period.
- The battery industry in South Africa is in transition as new entrants, including traditional energy players, enter the battery industry, by providing charging services at forecourts, by investing in battery manufacture and by holding a competitive advantage in producing lithium-ion batteries in large quantities. In addition, technology advancements, fuel economy standards and incentives for zero- and low-emissions vehicles and tax incentives on energy storage are likely to provide an opportunity in the battery market in the near future.
Key Market Trends
The Lithium-ion Segment to Witness Significant Growth in the Market
- The automotive sector is expected to be one of the major end-user segments for battery, primarily lithium-ion batteries owing to applications in EV's. The penetration of electric vehicles is anticipated to provide a massive impetus for the lithium-ion battery industry growth.
- The lithium-ion segment in the South Africa battery market is anticipated to witness a growth during the forecast period due to increasing end-user preference for zero-emission hybrid and electric vehicles, growth in the renewable energy sector, and increased usage of consumer electronics.
- Batteries powering EV's are mainly expected to drive the lithium-ion battery market. The energy storage demand side management and back-up power market are expected to increase significantly. Also, the potential for growth in the automotive aftermarket battery market lies in being able to service the older cars. Thus, the strength of the automotive segment continues to support growth in the battery manufacturing industry in South Africa.
- Therefore, factors such as falling battery prices and improving technology are expected to bring price-competitive electric vehicles to the market, in turn, creating demand for lithium-ion battery technologies.
Increasing EV Demand is Expected to Drive the Market
- Growing consumer inclination towards electric vehicles (EVs) that run without fossil fuels, amid increasing concerns regarding alarming pollution levels and negative impact of climate change, has boosted the market growth in South Africa.
- Factors such as a rise in the demand for zero-emission vehicles, depletion of fossil fuel reserves, and tightening emission regulations, has been driving the sales of batteries for electric vehicles in the country.
- A range of different vehicle types is available in the country, featuring increasing degrees of hybridization and electrification. There are also various types of vehicles, including hybrid electric vehicles, plug-in hybrid electric vehicles, and electric vehicles.
- In South Africa, as of 2018, the electric car stock has reached 1.01 thousands of vehicles from 0.03 thousand of vehicles in 2013. This shows a significant growth in the demand for EVs in the country.
- Therefore, the increasing adoption of electric vehicles is expected to drive the market for battery in South Africa during the forecast period.
The South Africa battery market is moderately fragmented. Some of the major players in the market include AutoX (Pty) Ltd, Duracell Inc., Eveready (Pty) Ltd., Probe Corporation SA (Pty) Ltd, and First National Battery Pty Ltd.
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