The Impact of the Top 3 Strategic Imperatives on Battery Chemistries for the Electric Two-wheeler Industry

Disruptive Technologies

WHY

• Disruptive technologies in electric vehicle (EV) battery chemistries have the potential to revolutionize the industry and overcome challenges such as range anxiety, cost efficiency, sustainability, and safety.
• AI-driven materials discovery and optimization can accelerate the development of innovative, disruptive battery chemistries.

FROST PERSPECTIVE

• Battery manufacturers embracing these innovations are well-positioned to lead the EV revolution, creating a sustainable and profitable future for the industry.
• New chemistries, such as sodium-ion and solid-state, need to earn consumer trust and widespread adoption, which could take time. The next 3–5 years will be crucial.

Internal Challenges

WHY

• While exploring diverse battery chemistries is crucial for innovation, industry convergence is equally significant, especially for the electric two-wheeler (E2W) industry, as it will reduce overall costs, foster faster innovation and development of new battery technologies, and enhance sustainability.

FROST PERSPECTIVE

• The convergence between the E2W industry and battery manufacturers has started. This convergence will boost innovation by enabling companies to leverage expertise to develop new technologies and stimulate industry growth.
• Shared infrastructure is also a significant benefit for E2W OEMs, as battery-swapping solutions are popular.

Transformative Megatrends

WHY

• Lithium-ion is the dominant battery chemistry in the E2W industry. New chemistries and manufacturing players are emerging, while established players are constantly innovating.

FROST PERSPECTIVE

• Because the E2W industry is highly competitive and dynamic, new battery chemistries focus on cost reduction, sustainability, and localization and will continue to shape the competitive landscape during the next 3–5 years.
• Though sodium-ion and solid-state batteries are still in their early stages, they have potential for improvement.

Scope of Analysis

• Frost & Sullivan explores battery chemistries for E2Ws across various regions in this analysis.
• We analyze various battery chemistries' characteristics, performance, impact, pros and cons, and evolving regulatory landscape.
• The analysis determines the industry trends, such as advancements in battery chemistries and technologies, and their impact on the E2W stakeholders.
• Frost & Sullivan also analyzes the investments and partnerships between E2W OEMs and battery manufacturing companies, performs a risk assessment of various battery chemistries for E2Ws, and provides a diversification analysis.
• Finally, we analyze potential growth opportunities for the EV ecosystem and E2W OEMs.

Growth Drivers

Environmental Concerns: Growing awareness about air pollution and climate change drives the shift toward cleaner alternatives, such as EVs and battery chemistries.

Focus on Sustainable & Ethical Resources: The growing attention to the ethical sourcing of raw materials and responsible mining and recycling of battery materials will minimize environmental impact.

Improving Charging/Battery-swapping Infrastructure: Charging infrastructure is growing and includes faster charging technologies and emerging models with swappable batteries across various regions.

Technology Development: Technological advancements play a crucial role in driving the growth of battery chemistries for E2Ws, especially in reducing charging times, addressing range anxiety, and improving user convenience.

Cost Reduction and Scalability: Streamlining production processes, automating steps, and utilizing alternative materials can lower battery costs and improve production efficiency.

Regional Preferences: Battery manufacturing companies have prioritized performance affordability, safety, and investments for various battery chemistries (depending on the region).

Growth Restraints

Cost and Supply Chain Issues:

The limited availability and fluctuating prices of crucial battery raw materials, trade tensions, and political instability in resource-rich regions can create cost and supply chain issues.

Recycling and Sustainability Concerns:

Efficient and environmentally sound recycling infrastructure for used batteries is crucial to avoid environmental hazards.

Regulatory and Policy Uncertainties:

Frequent changes in government regulations and subsidies can create uncertainty for manufacturers and investors.

Performance and Safety Concerns:

Currently available chemistries struggle to match the energy density of gasoline, restricting range and increasing battery pack size and weight. Extensive research is necessary to combat this.

Lack of Battery Standards for Performance and Safety:

Standardized testing and performance benchmarks are necessary to ensure consumer safety and product quality.

Key Competitors

• CATL
• BYD
• Samsung SDI
• LG Energy Solutions
• Northvolt
• Panasonic
• SK Innovations
• EVE
• Great Power
• NVT
• Farasis Energy
• ATL
• Chilwee
• IBC
• PT WIKA
• ProLogium Technology Co.Ltd.
• HiNa Battery Technology Co. Ltd
• Natron Energy Inc
• QuantumScape
• BrightVolt
• Anodox Systems
• Blue Solutions
• Faradion