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How COVID-19 is Threatening the Energy Storage Battery Charging Market

April 28, 2020
The pandemic has created several hurdles for lithium ion batteries. Countries which are major producers of raw materials that are required for battery production have been subject to stringent restrictions to control the spread of the virus.

The coronavirus outbreak has resulted in a substantial slowdown in terms of global economic growth. The pandemic has been particularly hard on China, owing to its place as a major global manufacturing center. A large number of production facilities have either been shut down or are not operating at full capacity owing to major disruptions in raw material supply chains. These trends have also impacted stock prices in the industrial battery chargers market.

Chargers for Lithium Ion Batteries Show High Susceptibility

The pandemic has created several hurdles for lithium ion batteries. Countries which are major producers of raw materials that are required for battery production have been subject to stringent restrictions to control the spread of the virus. For instance, Australian lithium production companies have set up strict guidelines for businesses in the industry in terms of long-distance travel restrictions.

Other major producer countries in Africa and Latin America have announced nationwide curfews and quarantines in addition to trade and travel closures. These trends are anticipated to restrict the production and adoption of industrial battery chargers.

On the other hand, 2019 witnessed an oversupply of raw materials, which has mitigated losses from potential raw material supply shortages. However, continued delays and restrictions on transport are a matter of concern in the short term. While production continues apace, problems with shipping, transport routes, and container equipment are critical threats to normal operations.

Logistics Remains a Major Challenge

Companies are feeling pressure in terms of supply chain disruptions. While some countries have designated select industries in the industrial battery chargers supply chain as essential, travel restrictions imposed on workers has made day-to-day functions complex, as remote production activities have not made major inroads into the industry.

Across the world, logistics for raw materials and component supplies are expected to slow down. Consequently, industrial battery charger manufacturers are expected to invest in bringing supply chains for components geographically closer together. The global pandemic is expected to bring about permanent changes in business approaches associated with international supply chains, which can result in growing localization of charger production.

Reduced Operations in End Use Industries to Remain a Key Obstacle

The rapid spread of the coronavirus outbreak has generated an unprecedented crisis for the global economy, with most businesses being adversely impacted by lockdown measures imposed by numerous countries. The industrial battery chargers market has been witnessing a steady fall in global demand, owing to reduced operations in end user industries.

Of the various applications of industrial battery chargers, those in the power and energy sector have been affected the most. Utilities companies have started to make substantial reductions in monetary investments, as governments are spending lesser, to handle the myriad disruptions in supply chains, and other problems arising from the coronavirus pandemic.

Industrial battery chargers are used extensively in industries such as oil & gas, manufacturing, and power generation, all of which have been adversely impacted. The oil & gas sector has been one of the hardest hit end use industries with massive slumps in oil prices.

China Industrial Battery Charger to Face Maximum Brunt of COVID-19

The pandemic has resulted in a large slump in demand for goods coming out of China. This in turn is affecting manufacturing activities around the world. Major international ports are also not-functioning at full operational capacity owing to restrictions on entry for Chinese products.

Countries have closed avenues of air and sea-based transport to China, which has resulted in a heavy impact on the demand for industrial battery chargers. However, analysts predict a recovery of business following the end of the pandemic as primary and secondary businesses in the industry return to normalcy.

The automotive industry is one of the impacted end use sectors, where manufacturers have been increasingly seeking to diversify their global operations for procurement of industrial battery chargers. The overdependence of end use industries on China has been exposed as flawed, even as electric vehicles become increasingly mainstream around the world.

As of April 2020, major restrictions in China have been largely restricted, and production levels at Chinese facilities have surpassed 70% of pre virus levels. Consequently, the critical risks to the industrial battery charger market have been partially mitigated.

Manufacturers Take Up Protective Measures

Some of the key global players in the industrial battery charger market include Hitachi Ltd., ABB Ltd, and Exide Technologies, among others. To keep disruptions to a minimum, market players have set up strict operational guidelines such as stopping non-urgent visitor visits to their premises, discouraging non-essential travel for personnel, increased cleaning and disinfection operations, and encouraging work from home operations. Manufacturers are also investing in infrastructure to maintain business continuity with clients through virtual support centers to keep communications with customers open during the crisis.

Manufacturers Look towards Tech Opportunities

Industrial battery charger manufacturers are seeking ways to access specialist resources remotely. Virtual reality and augmented reality platforms are being viewed as viable avenues for this purpose. Such tech innovations are largely reliant on maintaining organized data collection and workflow activity.

Such innovations allow specialist inputs and guided systems from computerized inputs, which allow inexperienced staff to perform tasks in the field, whenever needed. Also, software-based platforms minimize time constraints associated with data processing. As such, industrial battery charger companies will continue to maintain worker safety, and increase the likelihood of project successes, in unprecedented situations.

Installation Delays Create Order Backlog and Inventory Challenges

The COVID-19 pandemic has made the impact on the charging infrastructure clearer, including factors affecting production, distribution, and maintenance operations. Many major manufacturers have postponed the non-critical installations of chargers, while keeping up with maintenance of existent charging infrastructure, with few exceptions made for critical cases.

While companies continue to take orders, installations are largely expected to occur later, following the end of the outbreak. In addition, maintenance resources are also being currently restricted to essential sectors such as healthcare and logistics. These trends will have far reaching implications, not only for energy storage applications, but also for the overall global economy in the long term.

Authors: Mohit Loshali, Senior Research Consultant, Fact.MR

Mohit holds experience of more than six years in market research and consulting industry and has been closely working on automotive, industrial automation, and equipment industry verticals. So far, he has worked on 200+ research assignments, in addition to providing his expertise to 30+ reputed organizations. Mohit is currently the lead consultant for product positioning, competitive analysis, new market / segment exploration, and sourcing strategies at Fact.MR. These insights are based on a report on Automated Guided Vehicle Market by Fact.MR

Co-Author: Anuj Mudaliar, Market Research Writer

Anuj is an experienced market research writer, who works closely with the automotive, industrial automation, and equipment industry team at Fact.MR. With sound research skills and his own style of writing thought leadership articles, Anuj extensively covers happenings in the aforementioned domains. These insights are based on a report on Automated Guided Vehicle Market by Fact.MR 

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