The growing concerns about the ongoing climate change and environmental sustainability have pushed the adoption of clean energy technologies over the years. Policymakers across the globe are taking initiatives to ensure an orderly evolution toward alternative energy sources, promoting fairness and inclusion, and maintaining energy security. These escalating efforts toward emission-free energy generation have substantially boosted the sales of electric vehicles in the last few years, which, in turn, may increase the battery leasing service market share in the years ahead.

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Since EV battery accounts for a substantial share of the upfront cost of a vehicle, renting or leasing them reduces the overall cost of ownership and maintenance. The adoption of battery leasing services has numerous cost-effective benefits in covering the service, replacement, and repair of batteries across several end-use verticals, including logistics, shared mobility, and delivery firms with large fleets. In addition, the escalating efforts by OEMs to increase the uptake of clean fuel technology through ingenious business models will augment the battery leasing service industry forecast in the years to come.

Based on the latest report by Global Market Insights Inc., the global battery leasing service market size could exceed USD 400 million by 2028.

Listed ahead are some crucial factors redefining the future of the battery leasing service industry.

Increasing adoption of Electric Vehicles 

Electric vehicle (EV) sales have been at a record high over the recent years. As per the estimates by Energy Saver, EV sales in the US registered a growth of about 85% in 2021 compared to the previous year, accounting for nearly 73% of all PHEVs sales. In addition, the sales of new light-duty plug-in electric vehicles, comprising EVs and plug-in hybrid electric vehicles, reached almost 608,000 in 2021 from around 308,000 in 2020.

These optimistic scenarios, coupled with the consistently changing infrastructure, growing cost of acquisition, and rising concerns about the battery life, are expected to boost the battery leasing service market outlook.

Growing popularity of battery leasing subscription service

The subscription service business model has gained considerable traction in recent years owing to its several benefits, including reduced cost of ownership, warranted/free assistance and replacements, and timely and regular assessment of battery residual capacity by the service provider.

Driven by its popularity, in February 2021, Hyundai signed an MoU with the South Korean government and partner organizations to build an ecosystem around EV batteries.

As per the memorandum, one of the associates, KST Mobility, will rent batteries from Hyundai for a fleet of electric cabs. The firm will pay a monthly subscription fee for the leases, lowering the upfront expenses for the acquisition of EVs. These batteries will later be recovered to be used in an energy storage system for fast charging of EV taxis.

Such strategic moves, along with the growing environmental consciousness, will fuel the growth of the battery leasing service market landscape.

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Demand for nickel metal hydride on the rise

The nickel-metal hybrid battery leasing service market is expected to depict significant growth-fueling trends owing to the product’s rapid deployment across electronic vehicles and consumer electronics and their longer lifespan compared to their counterparts.

Due to its extensive demand, in March 2021, with backing from Volvo and Ford, a California-based firm, Redwood materials announced establishing a facility where it will recycle nickel-metal hydride (NiMH) and lithium-ion (Li-ion) batteries. The facility will be capable of processing nearly 6 GWh of li-ion batteries and about 60 000 EV batteries a year.

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