2026 Automotive Lead-Acid Battery Industry Analysis

According to the latest research report, the global automotive lead-acid battery market is projected to reach USD 35.291 billion by 2032, with a compound annual growth rate (CAGR) of 6.50% from 2026 to 2032.

Market Driving Factors

Growth of New Energy Vehicles

The rapid rise in new energy vehicle (NEV) sales, particularly in China where 2025 production and sales exceeded 12.8 million units, continues to drive demand. Although lithium batteries dominate as the primary power source, lead-acid batteries remain essential for starting, auxiliary power, and low-voltage systems. The increasing adoption of start-stop systems further boosts demand, maintaining a solid market position for lead-acid batteries even in highly electrified vehicles.

Increasing Vehicle Ownership and Replacement Demand

By the end of 2024, China's vehicle fleet reached 419 million units and continues to grow. As a consumable component with an average replacement cycle of three years, lead-acid batteries generate substantial aftermarket demand. In 2024, over 80 million vehicles required battery replacement, combined with new vehicle fittings, resulting in total demand of 112 million units and a domestic market value of RMB 17.655 billion.

Supportive Policies and Environmental Standards

Government policies, including China's New Energy Vehicle Industry Development Plan (2021–2035), promote high-performance, long-life batteries and stricter environmental standards. Requirements for low-lead materials, improved electrolytes, and higher recycling rates encourage technological upgrades while subsidies and tax incentives reduce costs and stimulate market growth.

Expansion in Energy Storage Applications

Rising renewable energy integration has increased demand for energy storage in grid balancing and distributed systems. Lead-acid batteries, with their low cost, high safety, and mature technology, hold a strong position. In 2024, they accounted for 75.07% of the global starting battery market, while China's backup power segment reached RMB 10.494 billion with production of 13.76 million kVAh.

Technological Progress and Cost Competitiveness

Ongoing improvements in energy density, cycle life, and safety—such as lead-carbon batteries—enhance performance. With raw materials comprising over 80% of costs, lead-acid batteries maintain superior cost-effectiveness compared to lithium alternatives, supporting strong export performance (USD 3.903 billion from China in 2024).

Development Opportunities

Expanding NEV Market and Supporting Roles

Global NEV sales are expected to exceed 20 million units in 2025, with China's fleet already at 13.1 million. Lead-acid batteries continue to serve critical functions in start-stop systems, hybrid powertrains, and energy recovery, offering substantial growth potential.

Growing Aftermarket from Vehicle Fleet Expansion

With China's vehicle ownership growing at approximately 5% annually, replacement demand will remain robust over the next five years, providing a stable revenue base.

Booming Energy Storage Sector

Carbon neutrality goals are accelerating storage system deployment. Lead-acid batteries' advantages in cost and reliability position them well for applications in charging infrastructure, grid storage, and industrial uses.

Policy-Driven Innovation

Continued policy support for cleaner production and R&D will drive product upgrades and improve market competitiveness.

Technological and Cost Advantages

Advances such as AGM and EFB batteries, combined with inherent cost benefits, will solidify lead-acid batteries' position in price-sensitive and specific-use segments.

Development Challenges

Substitution by Advanced Battery Technologies

Lithium and emerging sodium-ion batteries offer superior energy density and cycle life, eroding lead-acid market share in NEVs and high-end storage. For example, lead-acid's share in certain replacement markets fell from 68% in 2023 to 49% in Q1 2025.

Stricter Environmental Regulations and Rising Costs

Tighter pollution controls require significant investment in waste treatment and recycling, increasing production costs. Fluctuating lead prices and inefficient recycled lead supply further pressure margins.

Overcapacity and Price Competition

Excessive capacity expansion has led to utilization rates dropping to 53% in some regions. Intense price competition has reduced gross margins from 18% in 2023 to 6.7% in Q1 2025.

Slow Technological Progress and Product Homogenization

Lead-acid batteries lag in key metrics (e.g., 300–500 cycles vs. over 2,000 for lithium), and misleading marketing claims have damaged consumer trust and repurchase rates.

Automotive Industry Transformation

The shift toward electrification and intelligence is reducing internal combustion engine vehicle share, while major OEMs increasingly adopt 12V lithium solutions, gradually weakening traditional demand for lead-acid starting batteries.