Electric Vehicles Adhesives Market Growth & Trends
The global electric vehicles adhesives market size is expected to reach USD 329.5 million by 2027, according to a new report by Grand View Research, Inc., expanding at a CAGR of 26.6% from 2020 to 2027. Rising preference for adopting environmental friendly vehicles in order to curb carbon footprints of the earth is expected to boost the market growth over the forecast period.
Adhesives play a major role in electric vehicles (EVs) by not only reducing their weight but also enhancing their efficiency. Adhesives are used for several applications in EVs, such as component joining and protecting them against shock and vibration damages, helping in making a path for conducting the heat away from modules and cells by isolating the components, and preventing the risk of fire by reducing shorts. Such advantages are propelling the consumption of adhesives in the EV market.
Adhesives are majorly used in module and pack bonding, followed by thermal interface bonding and battery cell encapsulation. The heat generation and thermal management are serious concerns in EVs. As a result, the battery manufacturers ought to use thermal interface materials, such as adhesives, over mechanical fasteners for smooth functioning. Adhesives used for thermal interface bonding possess good thermal conductivity, mechanical stability, and vibration and environment resistance.
Asia Pacific was the largest regional segment as of 2019 and it is anticipated to maintain its lead over the forecast period. The region is the major consumer as China is the largest manufacturer of EVs in the world. However, amidst the Covid-19 pandemic across the world, which has been reported to originate in China, the market growth is expected to remain sluggish in 2020-21. The unavailability of workers and raw materials has impacted the manufacturing of EVs as of March 2020, which has impacted the demand for adhesives.
The market growth is expected to pick up from 2021, which is expected to be fueled by favorable government policies, coupled with rising initiatives in the EV market in countries, such as Singapore, India, and China. For instance, in February 2020, an EV startup in Bengaluru, Karnataka, India, launched a low-cost smart EV charging station called the “Kirana Charzer”, which costs only _10,000 and shall enable the installation of charging stations at small shops. Increasing number of charging stations across Asia is an indication towards rising number of EVs on Asia roads. For example, there are over 1,200 electric chargers in Singapore and 2,000 in Hong Kong.
The adhesives industry is marked by the presence of both small and large players, such as Henkel, Sika AG, H.B. Fuller, 3M, and Lord Corporation. Considering the rapid growth of EVs over the coming years, the key manufacturers are adopting various strategies, such as collaboration with other companies, to gain a competitive edge in the market.
For example, in March 2020, Henkel and Covestro developed a solution, which was able to fix cylindrical lithium-ion battery cells in a plastic cell holder. This development shall prove fruitful for both OEMs and customers as it shall provide a cost-efficient large scale cell assembly for the OEMs and reduced EV prices for the customers. Growing emphasis on technological advancements in the market is anticipated to positively influence market growth over the coming years.
Growth in the aerospace and EV industry propelled Parker Hannifin Corporation to acquire Lord Corporation, a leading adhesive manufacturer, for USD 3.68 billion in 2019. The deal offered a vital and huge product expansion for the company’s engineered materials unit, considering Lord Corporation’s CoolTherm-branded thermal management solutions and other adhesives, which are anticipated to prove fruitful for company’s sales on account of increasing production of EVs across the globe.
Electric Vehicles Adhesives Market Report Highlights
- North America is expected to register the fastest CAGR of 27.1% in terms of volume during the forecast period owing to increasing production of electric vehicles in the region. For instance, as part of its plan of building three plants in three continents, Nidec’s one plant for producing electric motors will be in Mexico, which is worth an investment of USD 455 million
- By vehicle type, the battery electric vehicles (BEVs) segment accounted for a revenue share of over 50.0% in 2019. The segment is anticipated to witness rapid growth over the coming years owing to high consumption of adhesives in BEVs than plug-in hybrid electric vehicles, coupled with increasing production of BEVs
- Based on application, battery cell encapsulation is anticipated to expand at the fastest CAGR of 28.3% in terms of revenue over the forecast period on account of increasing use of adhesives in cells for maintaining integrity in their alignment.