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According to the report “Electric Vehicle Adhesives Market by Application (Powertrain, Exterior, Interior), Resin Type, Substrate, Form (Liquid, Film & Tape), Vehicle Type (Electric Car, Electric Bus, Electric Bike, Electric Truck), and Region – Global Forecast to 2026”, size is estimated to be USD 0.4 billion in 2021 and is projected to reach USD 1.8 billion by 2026, at a CAGR of 44.7% between 2021 and 2026.
The rising trade war tensions between the US and China and low labor costs in China have forced various end-users of adhesives to relocate and establish their manufacturing base in the ASEAN countries. This relocation is expected to increase the demand for adhesives in the ASEAN countries.
India offers low-cost labor, which can provide significant investment opportunities for companies. Government initiatives such as “Make in India” and the proposed scheme on entrepreneurship development by the government may open up additional opportunities in the industrial and infrastructure construction segments. All these factors are expected to drive the market in APAC.
By application, Exterior accounts for the largest share in the EV Adhesives Market. The rising production and sale of electric cars have increased the demand for batteries, electric motors, doors, instrument clusters, infotainment systems, seats, various panels, and charging sockets.
Batteries are the most important components of electric cars as they provide power to the car. The battery of the car is heavier than the other parts. In order to counter the weight of batteries and reduce the overall weight of electric cars, lightweight materials are used in electric car applications.
In the electric vehicle industry, adhesives are used in place of welds, screws, rivets, gaskets, and fasteners, which allows automakers to make the vehicle lightweight. One of the concerns in electric vehicles is range. Automakers are addressing this issue by increasing the battery capacity of the vehicle.
The design of electric vehicles has to be lightweight to counter the weight of the battery system used in electric vehicles. The bonding of dissimilar materials is done with the help of structural adhesives to replaces fasteners, rivets, and spot welding, which contributes to reducing the weight of vehicles.
The use of structural adhesives also addresses the issue of crashworthiness and safety of battery systems in electric vehicles. With the continuous development in technology, the consumption of adhesives in the exterior parts of electric vehicles will further increase during the forecast period.
The use of adhesives in EV is expected to increase during the forecast period. The various applications of adhesives in EV require different types of adhesives derived from resins such as epoxy, polyurethane, silicone, and acrylic. Adhesives made of different resins have different properties and are chosen according to the specific application.
Polyurethane adhesives are made of urethane polymers. They exhibit extraordinary elasticity and elongation up to 600% before fracture. There are three types of polyurethane adhesives, two-component polyurethane, one-component rigid polyurethane adhesives, and two-component elastic polyurethane adhesives.
The sales of ICE vehicles are seeing a slump in many of the developed markets due to increasingly stringent emission standards. New emission standards have been introduced in Europe, China, and the US; while in India, new emission standards came into effect in 2020. In Europe, automobile manufacturers have struggled to adapt to new emission standards under the Worldwide Harmonized Light Vehicles Test Procedure (WLTP), which came into effect in September 2018. The decrease in the sales of ICE vehicles has made automobile manufacturers invest more in electric vehicle technology.
Vehicle manufacturers announced increasingly ambitious electrification plans. Out of the world’s top 20 vehicle manufacturers, which represented around 90% of new car registrations in 2020, 18 have stated plans to widen their portfolio of models and to rapidly scale up the production of light-duty electric vehicles. The model availability of electric heavy-duty vehicles is also broadening, with four major truck manufacturers indicating an all-electric future.
In addition to this, Hero Electric (India) is planning to increase the capacity of its current plant from 75,000 to 3 lakh electric vehicles (2 wheelers). It is also planning to open a new production facility with a production capacity of 10 lakh motor vehicles (2 wheelers) in the coming years.
The rapid growth of the EV market is evident from the booming sales in recent years. There were over 10 million electric cars on the streets across the world at the end of 2020, owing to a decade of rapid growth. Electric car registrations increased by 41% in 2020, despite the pandemic-related worldwide downturn in car sales in which global car sales dropped 16%.
Around 3 million electric cars were sold globally (a 4.6% sales share), and Europe overtook China as the world’s largest electric vehicle (EV) market for the first time. Electric bus and truck registrations also expanded in major markets, reaching global stocks of 600,000 and 31,000 respectively.
The bonds of polyurethane adhesives are formed in two stages: firstly, the adhesive cools back down to reach the holding strength, and, secondly, the adhesive uses the moisture to continue curing for hours to days to reach the final structural strength.
The demand for EVs is increasing at a rapid pace due to growing environmental concerns, even as the sale of ICE vehicles is seeing a slump. The implementation of favorable policies for EVs and technological advancements in the value chain will drive the EV market in the next five years. The growth of electric cars and buses is expected to drive the growth of EV adhesives during the forecast period.
Vehicle manufacturers announced increasingly ambitious electrification plans. Out of the world’s top 20 vehicle manufacturers, which represented around 90% of new car registrations in 2020, 18 have stated plans to widen their portfolio of models and to rapidly scale up the production of light-duty electric vehicles. The growth of electric cars is driven by critical policy changes adopted by leading countries in electric mobility.
These countries have introduced stricter emission standards in addition to incentives for electric cars and are promoting investments in the EVs industry value chain to bring price parity between EV and ICE vehicles. In an EV, adhesive technology plays a critical part in making the EV lightweight as it is used in a number of applications. The growing EV markets such as Europe, APAC, and North America will provide growth opportunities for EV adhesive manufacturers during the forecast period.
APAC accounted for the largest share of the EV Adhesives Market in 2020, followed by Europe and North America. The rising trade war tensions between the US and China and low labor costs in China have forced various end-users of adhesives to relocate and establish their manufacturing base in the ASEAN countries. This relocation is expected to increase the demand for adhesives in the ASEAN countries.
The leading players in the EV Adhesives Market are Henkel (Germany), H.B. Fuller (US), Sika AG (Switzerland), 3M (US), Wacker Chemie AG (Germany), Bostik SA – An Arkema company (France), L&L Products (US), Jowat SE (Germany), Ashland (US), PPG Industries, Inc. (US) and Permabond (UK).