The global battery as a service industry is projected to grow from USD 0.66 billion in 2024 to USD 14.45 billion by 2035 at a CAGR of 32.4% during the forecast period. The growth of the market is primarily driven by the increasing demand for EVs with low upfront costs, along with the rising acceptance of EVs, particularly in cost-sensitive markets like India and China, where consumers prefer affordable EV ownership options. Government support through incentives is also accelerating EV adoption. Additionally, countries like South Korea are planning to introduce battery leasing services, which will further contribute to market expansion.
The 5-10 kWh segment is expected to grow at the fastest rate in the battery as a service market during the forecast period, driven by the affordability and convenience in electric three-wheelers used for urban transport and last-mile delivery. OEMs such as Mahindra Last Mile Mobility (India) provide battery leasing services for vehicles with battery capacities between 5-10 kWh. Mahindra’s Zor Grand and Treo Plus come feature batteries with more than 9 kWh capacity. Both electric three-wheeler models have been available in India since 2024.
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The Pay-per-use segment is set to experience the fastest growth in the battery as a service market during the forecast period. The pay-per-use model used for two-wheelers will have a niche market in Europe and North America, focusing mainly on personal usage. However, this model is expected to be significantly more expensive for the owners of three-wheelers. As three-wheelers mostly used for commercial purpose, they need higher energy consumption and battery capacity requirements. NIO (China), VinFast (Vietnam), MG Motor India, and Switch Mobility (UK), offer pay-per-use battery leasing services. In October 2024, Urja Mobility (India) secured funding of USD 11.6 million (Rs. 100 crores) to expand its leasing operations for batteries with a total capacity of 300 MWh per day by 2025. The company plans to utilize the funds to scale its unique pay-per-use battery leasing model. Similarly, in September 2024, Vidyut Tech (India) collaborated with MG Motor India to introduce a battery leasing program for vehicle models like the MG Comet EV, MG Windsor EV, and MG ZS EV. This program provides batteries at an affordable rate of USD 0.029 (Rs. 2.5) per kilometer, based on usage.
The two-wheeler segment in the battery as a service market is expected to grow at a significant rate over the forecast period. Battery leasing is a viable option for two-wheelers used by delivery service companies, such as Zomato (India), Rapido (India), Meituan (China), Ele.me (China) or Swiggy (India). By leasing batteries, delivery companies can reduce their operational costs. They can also reduce concerns about battery maintenance or replacement. OEMs, such as Gogoro (Taiwan), Bounce Infinity (India), Lectrix EV (India), Kinetic Green (India), and Yamaha Motor Co., Ltd. (Japan) are providing battery leasing solutions for their electric two-wheelers. Since 2023, Gogoro in partnership with Yadea Technology Group Co.,Ltd. (China) has been offering the C1S two-wheeler with a battery leasing option in China. The company is expected to extend this service to its Keeness model by 2025. Similarly, in 2024, Bounce Infinity introduced its battery leasing solution for its Infinity E1X model in India. Likewise, Lectrix EV offers a battery subscription service for its LXS BAAS model in India at a monthly cost of USD 11.52 (Rs. 999).
China is expected to dominate the Asia Pacific battery as a service market. The automakers in China are increasingly focusing on addressing the challenge of rising vehicle emissions in the country. The Chinese government supports this trend by offering subsidies for vehicle electrification, which has significantly boosted EV sales. With a highly developed EV industry, China is leading the global shift to EVs. Prominent Chinese manufacturers, such as BYD, NIO, XPENG INC, CHANGAN, SAIC Motor Corporation, and CHINA FAW GROUP, are aiding this shift. In 2024, BYD alone sold approximately 4.27 million vehicles, including battery-electric vehicles (BEVs) and plug-in hybrids. China’s robust supply chain enables local companies to produce EVs competitively, making them appealing to international markets. Chinese OEMs, such as NIO, Changan, FAW, XPENG INC, and BAIC, offer battery leasing services to offer affordable EV solutions for consumers. In December 2024, Contemporary Amperex Technology Co., Limited (China) announced the launch of a flexible leasing option for its Choco battery service package. The monthly subscription fee is USD 50.60 for the #25 LFP battery variant and USD 68.40 for the #20 LFP.
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