March 14, 2024
Global small power lithium battery market insights: growth drivers and future outlook
While the competition for new energy vehicle batteries is becoming increasingly fierce (explore selection guide of battery used in electric vehicle ), the small power lithium battery market has quietly risen and become the fastest growing blue ocean track in the lithium battery industry. From electric two-wheeled vehicles and power tools to AGVs, drones and even humanoid robots, new and old scenarios are accelerating the process of lithium electrification.
This article will take you to a comprehensive analysis of the current situation, sub-sectors, driving factors and future trends of the global small power lithium battery market, and deeply explore the opportunities and challenges behind this trillion-level market, and provide a reference for lithium battery companies to seize differentiated growth opportunities.
Table of Contents
Add a header to begin generating the table of contents
Overview of the small power lithium battery industry
Small power lithium batteries refer to power battery systems used in electric two-wheeled vehicles, power tools, drones, AGVs, electric utility vehicles and other fields, with a power consumption of generally 0.5-20KWh. As an important branch of the lithium battery industry, the small power lithium battery market is ushering in unprecedented development opportunities.
Unlike large-capacity batteries for new energy vehicles, small power lithium batteries are mainly used to replace the original power systems, such as “oil to electricity” and “lead to lithium”. Although the single battery has a small amount of power, it has a huge replaceable stock market.
Data shows that the average annual compound growth rate of China’s small power lithium battery market exceeds 30%, making it one of the fastest growing segments of lithium batteries. This growth is not only due to the replacement and upgrading of traditional application scenarios, but also benefits from the explosion of demand in emerging fields.
Against the backdrop of fierce competition in the field of automotive power and energy storage batteries, many lithium battery companies have turned to the small power battery track, hoping to gain new growth opportunities in this blue ocean.
Analysis of major market segments
Electric two-wheeled vehicle market
Electric two-wheeled vehicles are one of the largest application markets for small power lithium batteries. In 2022, global shipments of lithium batteries for two-wheeled vehicles and balance vehicles were 25.2GWh, and are expected to exceed 55GWh by 2027. The global electric two-wheeled vehicle market presents regional differentiation characteristics:
China market: As the world’s largest electric two-wheeled vehicle market, Gaogong Industry Research Institute of Lithium Battery (GGII) predicts that China’s lithium battery two-wheeled vehicle shipments will reach 28 million by 2027, and the lithium battery penetration rate will approach 40%. In terms of market structure, Phylion and Tianneng Saft are in the first echelon, with annual shipments of more than 2 million sets.
European and American markets: E-bike is the main type of electric two-wheeled vehicle in Europe and the United States (find the top 10 e-bike manufacturers in USA) , and has been fully electrified. The European E-bike market is expected to grow from US$10.71 billion in 2023 to US$19.28 billion in 2028, with a compound annual growth rate of 12.48%; the US market is expected to grow from US$1.76 billion in 2023 to US$4.1 billion in 2028, with a compound annual growth rate of 18.43%.
South Asia and Southeast Asian markets: Motorcycles are the main mode of travel in the region, with a total of about 500 million vehicles and annual sales of more than 30 million vehicles. As governments around the world promote the transformation of motorcycles from oil to electricity, the electric motorcycle market in the region will usher in huge development opportunities (explore the top 10 electric motorcycle manufacturers in South Asia).
According to McKinsey’s forecast, by 2030, 30% of the world’s two-wheeled vehicles will be electrified, with a market size of US$218 billion and a population of 2.5 billion. With the upgrading of the industry and the reduction of lithium battery costs, the replacement process of lithium batteries for lead-acid batteries is accelerating (lead acid battery vs lithium ion, which is better?).
Power tool market
Power tools are another important application area for small power lithium batteries. In 2022, the global shipment of lithium batteries for power tools will be about 3.4 billion, 28.8GWh. The industry estimates that the demand for lithium batteries for power tools in 2024 and 2025 will be about 4.2 billion and 5 billion, with market sizes corresponding to 35.5GWh and 42GWh respectively.
The market size of outdoor power equipment (OPE) is particularly impressive, with a global market size of nearly US$40 billion in 2023 and an estimated US$45 billion in 2025. The share of lithium-ion OPE in North America has increased from 13% in 2010 to 40% at present, and its share in Europe has also exceeded 30%, and is gradually becoming mainstream.
Benefiting from the advancement of lithium battery technology and the reduction in costs, lithium-ion OPE has basically achieved parity with fuel OPE. In addition, with the catalysis of environmental protection policies, it is expected that the lithium electrification rate of OPE will accelerate.
Electric forklift and AGV market
Electric forklifts are more economical and environmentally friendly than fuel forklifts, and their penetration rate has been rising in recent years. Among domestic electric forklifts in 2022, 433,400 lithium-ion forklifts were sold, a year-on-year increase of 30.3%, and the lithium-ion penetration rate was 64%.
GGII data shows that China’s lithium-ion battery shipments for electric forklifts in 2022 were about 4GWh, a year-on-year increase of about 33%. It is expected that China’s lithium-ion battery shipments for electric forklifts will continue to grow at a rate of more than 35% in the next five years, and the lithium-ion penetration rate in the forklift field will exceed 80% by 2027.
In the lithium-ion battery market for electric forklifts, Pengcheng Technology has obvious advantages, with a market share of nearly 50%, followed by Yijiatong, Guosheng Battery and Ganfeng Power.
At the same time, unmanned handling equipment AGV is developing rapidly. In 2022, the sales volume of AGV in the Chinese market reached 93,000 units, with sales of 18.5 billion yuan, a year-on-year increase of 46.83%. In 2023, the sales volume increased to 102,000 units, and the market penetration rate of lithium-ion AGV exceeded 50%, becoming the mainstream of industry applications.
Electric utility vehicle market
Electric utility vehicles refer to purpose-built vehicles used in designated areas such as tourist attractions, industrial parks, and golf courses. In 2022, the global sales volume of electric utility vehicles was about 953,000 units, with a market size of about US$5.61 billion. Among them, the golf cart market has the largest scale, with shipments accounting for 60% of the total, reaching about 560,000 units in 2022, and North America is the largest demand market.
According to Mordor Intelligence data, the global electric utility vehicle market size was about US$2.15 billion in 2023, and is expected to reach US$2.84 billion by 2028, with a compound annual growth rate of 5.71%. North America and Europe are the largest markets, and Asia is the fastest growing market. Thanks to the decline in lithium battery costs, industry leaders are turning to lithium power, and lithium batteries are rapidly replacing lead-acid batteries as the main power source for electric utility vehicles.
Drones and emerging application markets
The demand for small-power lithium batteries in the drone field is growing rapidly. According to data from the Civil Aviation Administration of China, the number of registered drones in China will reach 1.267 million in 2023. In the future, with the development of express logistics and other fields, the market demand for lithium batteries for drones will continue to grow. Some institutions predict that by 2030, the market size of lithium batteries for drones in China alone is expected to exceed 100 billion yuan.
In addition, emerging application scenarios such as humanoid robots, eVLOT, electric ships, smart wearable devices, smart homes, and unmanned delivery vehicles are emerging in an endless stream. Taking electric ships as an example, IDTechEx predicts that the global electric ship market will reach US$20 billion in 2027. In Southeast Asia, where there are many islands, the electrification trend of nearly 2 million small ships has begun, which will bring new growth points to the small-power lithium battery market.
Analysis of market driving factors
Technological progress and cost reduction
The continuous progress of lithium battery technology and the continuous decline in costs are the core factors driving the rapid growth of the small power lithium battery market. Since 2023, the price of lithium battery raw materials has fallen, making the comprehensive cost advantage of lithium batteries further apparent, accelerating the process of “lead to lithium” and “oil to electricity”. With the advantage of high energy density, ternary materials are widely used in the field of small power, especially in the field of electric two-wheeled vehicles and high-rate power tools.
Environmental protection policy promotion
Increasingly stringent environmental protection policies around the world are driving the transformation of small power equipment to electrification. Major economies such as the European Union, the United States, and China have successively introduced policies to restrict the use of high-emission small power equipment and encourage the use of electric alternatives. For example, the European Union plans to ban the sale of new fuel motorcycles by 2035, which will greatly promote the development of the electric two-wheeled vehicle market.
Application scenario expansion
With the advancement of science and technology, especially the rapid development of fields such as AI, the application scenarios of small power lithium batteries are constantly expanding. From traditional electric two-wheelers and power tools to emerging AGVs, drones, humanoid robots, etc., these new application scenarios have injected new vitality into the small power lithium battery market.
Market demand upgrade
Consumers’ requirements for portability, usage time and performance are constantly increasing, which has promoted the development of small power equipment towards lithium electrification. Compared with traditional power sources, lithium batteries have advantages such as light weight, high energy density and long cycle life, which can better meet the use needs of consumers.
Market competition pattern
The competition pattern of the small power lithium battery market shows the characteristics of differentiation in subdivided fields:
Electric two-wheeler field: Phylion Supply and Tianneng Saft are ranked in the first echelon, with annual shipments of more than 2 million sets, and are constantly widening the gap with the second and third echelons.
Electric forklift field: Pengcheng Technology has a clear advantage, with a market share of nearly 50%, followed by Yijiatong, Guosheng Battery and Ganfeng Power.
Electric balance car field: Due to the low technical threshold, there are many competitors, and representative suppliers include EVE Energy, Aierji New Energy (Nanjing) (LG), CATL, Xinwanda, Blue Lithium Core (Tianpeng Power), Tianjin Lishen, etc.
Comprehensive layout: As a leader in the field of light vehicle lithium batteries, Phylion has a leading advantage in the 1-15 kWh scenario. It not only performs well in the traditional electric bicycle lithium battery field (explore bike battery voltage ), but also accelerates the layout in emerging fields such as outdoor mobile power, AGV lithium battery, electric motorcycle lithium battery, and electric ships.
Industry development prospects and trends
Market scale continues to expand: It is expected that the global small power lithium battery market will maintain an average annual compound growth rate of more than 30% from 2022 to 2027, becoming one of the fastest growing segments of the lithium battery industry.
Acceleration of lithium electrification: As the cost of lithium batteries continues to decline and the performance continues to improve, the lithium electrification rate of small power equipment will increase significantly, especially in the fields of electric two-wheeled vehicles, power tools and electric forklifts.
Differentiated development of regional markets: As the world’s largest producer and consumer of small-power lithium batteries, China’s market growth will tend to stabilize; the European and American markets will maintain rapid growth driven by environmental protection policies; emerging markets such as Southeast Asia and South Asia have great potential and will become the next growth hotspot.
Continuous advancement of technological innovation: In order to meet the needs of different application scenarios, small-power lithium batteries will continue to innovate in energy density, safety, fast charging performance, low-temperature performance, etc., to promote product iteration and upgrading.
Intensified industrial chain integration: With the intensification of market competition, companies with technological and scale advantages will integrate industrial chain resources through mergers and acquisitions, strategic cooperation, etc. to enhance market competitiveness.
Conclusion
The global small-power lithium battery market is in a rapid development stage. Driven by multiple factors such as technological progress, cost reduction, policy promotion and application scenario expansion, it will continue to maintain rapid growth in the future. The lithium electrification rate in traditional application fields such as electric two-wheelers, power tools, AGVs, and drones will continue to increase. At the same time, emerging application scenarios such as humanoid robots and electric ships will also bring new growth points to the market.
For lithium battery companies, the small power lithium battery market provides a differentiated development path, especially in the context of fierce competition in the large power and large energy storage markets. Extending to the small power field can effectively reduce competitive pressure and obtain new growth opportunities. In the future, companies with technological advantages, cost advantages and multi-scenario application capabilities will occupy a favorable position in this trillion-level market.
Related post
October 2, 2023
September 19, 2023
Willow
Willow is a materials engineer with a Master’s degree in Materials Science and Engineering, specializing in lithium-ion battery materials and energy storage technologies.
Her work focuses on EV battery swapping solutions, battery innovation, and new energy industry trends, aiming to translate research insights into practical applications for sustainable transportation.
Leave a comment