Battery leasing provides an affordable and sustainable business model for the usage and recycling of power storage systems batteries. Battery leasing allows customers to utilize high-quality batteries without major upfront investments, shifting the higher costs of battery procurements to the lessors. The customers pay a periodic fee depending upon actual usage instead of shelling huge capital investments. This pay-per-use approach is beneficial for EV owners and fleet operators to reduce total cost of ownership.
The global Battery Leasing Market is estimated to be valued at US$ 15.03 Bn in 2023 and is expected to exhibit a CAGR of 11% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Increasing adoption of electric vehicles is a major driver of growth in the battery leasing market. As the electric vehicle fleet continues to expand globally in response to stricter emission regulations, the demand for lithium-ion battery is also rising steadily. However, batteries remain the most expensive component of electric vehicles, comprising up to 30% of an EV’s total cost. This makes battery ownership unaffordable for many individual customers and fleet operators. Battery leasing helps overcome this barrier by transferring the battery cost from a upfront capital expenditure to a low operational expenditure over the life of the lease. It allows customers to benefit from newest battery technologies without inflating the upfront purchase price of electric vehicles. Leasing also provides customers access to repair, replacement and recycling of older battery packs. This full-service, pay-per-use battery leasing model is thus fueling the adoption of electric vehicles.
SWOT Analysis
Strength: Battery leasing provides benefits like lower upfront costs, shorter contract options and cash flow optimization which help business customers adopt renewable energy and energy storage technologies more easily.
Weakness: Higher operating costs than outright battery purchases. Returns and residual values of batteries after the lease terms are uncertain.
Opportunity: Rising demand for energy storage driven by the advancement of renewable energy and electric vehicles present a big market opportunity. More countries and regions adopting policies to boost clean energy adoption will further spur battery leasing demand.
Threats: Suppliers integrating vertically by offering both batteries and financing could threaten the positioning of dedicated battery leasing companies. Declining battery costs may also reduce the economic benefits of leasing over time.
Key Takeaways
The global Battery Leasing Market is expected to witness high growth over the forecast period of 2023 to 2030 supported by robust increase in energy storage deployment worldwide. The global Battery Leasing Market is estimated to be valued at US$ 15.03 Bn in 2023 and is expected to exhibit a CAGR of 11% over the forecast period 2023 to 2030.
Regional analysis comprises the North America and Europe currently dominate the battery leasing market owing to supportive policies and high renewable energy targets set by governments in countries like the US, Germany and UK. However, Asia Pacific is expected to be the fastest growing market led by strong momentum in China, Japan and India towards achieving carbon neutrality goals through renewable energy integration and adoption of electric vehicles at massive scale.
Key players operating in the battery leasing market are Nextera Energy, Onewatt, EDF Energy, Engie, EON Energy Solutions, Alpiq, Leclanche, Sonnen, Enel X, Shell, Total Solar Distributed Generation USA, Sunrun, LG Chem, Samsung SDI, BYD, Panasonic, CATL, Tesla and Fluence Powin Energy. The leaders are expanding their service footprint globally through strategic partnerships to tap emerging battery leasing markets and gain first mover advantages.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
