Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Is the world ready to move from lead acid batteries in industrial and automobile sector – the question is being weighed in the backdrop of increasing research to replace this battery which is now on ‘life support’. 


Nilar International, headquartered in Sweden and a producer of nickel metal hydride (Ni-MH) chemistry batteries, recently received a €47mn ($55mn) aid to compete with lithium-ion and lead acid batteries. This can be seen as a sign that the world is actively searching for lead acid batteries’ replacement.


Lead acid batteries’ utility

Lead-acid batteries are the most widely used rechargeable battery that serves auto and industrial segment extensively. The importance of sustainability of battery systems and the abundance of raw materials is also becoming crucial.


“Lead batteries are already on life support and have only a span of 10 years” said leading industry sources. In the developed countries, the switch to other batteries maybe possible in some years but it will take more than 10 years for it to be accepted in Asian countries, Davis Index gathered from many market participants.


Lead acid batteries are predominantly known to be hazardous to the environment and several restrictions are placed even for the dismantling it for scrap and transportation. Over the years, automakers have made significant innovations in alternative technologies for lead-based batteries but in automobile segment, lead acid batteries remain the conventional choice. 



Ni-MH batteries are safe, recyclable and would last longer than other batteries, its manufacturers claim. Producers are working on reducing emissions and carbon footprint while looking for alternatives to the existing polluting energy. 


These alternative technologies which could replace lead acid batteries would need to match the existing champion in terms of safety, reliability and cost. Lead acid battery costs $150/kWh. Ni-Cd is $500/kWh, Ni-MH is $600/kWh, Ni-Zn batteries are around $450/kWh, according to UN Environment Programme (UNEP). Affordability is a huge concern in several countries especially in the current circumstances brought on by the pandemic.


In India, difficulty in replacing lead batteries in starter and home inverters market could arise due to its low cost, market participants told Davis Index. For large UPS, electric cars and buses, lithium-ion or nickel batteries are better suited due to its compact characteristic and light weight. 


In automobiles that run on fuel, chances of changing from lead acid batteries to any other source of back-up looks bleak for at least next 10 years, sources told Davis Index. Latest technology on aluminium-based batteries to replace nickel-based batteries is out but very expensive, said market participants.


Comparison of batteries across vehicle classes show that lead acid in conventional vehicles costs €50-150/kWh, nickel around €700-1400/kWh and lithium-ion is €600-1200/kW, according to Unep study. Lead acid batteries in EVs are not suitable due to its weight and design while nickel batteries are cost efficient and widely available compared to lithium-ion batteries. 


As global transport moves towards EVs, automakers are trying to find a cheaper version of lithium-ion and nickel batteries. The main concern with lithium-ion batteries is that they are 90pc sourced from China which makes many auto manufacturers uncomfortable, shared sources. 




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