The electric vehicle battery coolant market is estimated to be valued at USD 2.12 Bn in 2024 and is expected to reach USD 2.74 Bn by 2031, growing at a compound annual growth rate (CAGR) of 3.8% from 2024 to 2031. The electric vehicle battery coolant market is expected to witness steady growth over the forecast period with the rising adoption of electric vehicles globally.

Market Driver - Increased Adoption of Electric Vehicles to Reduce Carbon Emissions Globally

Transportation sector is recognized as a major contributor to carbon emissions today. This has put the spotlight on electric vehicles that have zero direct emissions. Countries have set ambitious targets to transition to electric mobility to reduce dependence on oil imports and curb greenhouse gas emissions from vehicles.

With growing fleet of EVs on the road, installed base of lithium-ion batteries powering these vehicles will continue expanding over the coming years. With batteries making up nearly half the cost of an EV, effective thermal management of these large and energy dense battery packs becomes critical for ensuring optimal performance and prolonging their lifespan.

This burgeoning electric mobility revolution will likely drive strong demand for more sophisticated and efficient battery cooling systems for electric vehicles. Advance cooling solutions will play a vital role in encouraging continued uptake of battery-powered vehicles and faster energy transition globally. Consequently, this is expected to drive growth of the electric vehicle battery coolant market in the coming years.

Market Driver - Government Initiatives Promoting the Use of Electric Vehicles for Environmental Benefits

Recognizing transportation's outsized carbon footprint, countries are stepping up policy support to accelerate adoption of electric mobility. Many nations have introduced purchase incentives like tax rebates and non-monetary incentives. Several cities offer other benefits such as free charging at public stations and no registration fee or road tax for EVs. Many governments provide subsidies for production and marketing of EVs.

Policy driven adoption aligns with national goals to diversify energy sources, boost energy security and transition to a greener transport system. Developed nations are leading the push for electric mobility while emerging countries are catching up through supportive policy ecosystems. A robust policy framework has accelerated the push towards low or zero emission vehicles in nations committed to curbing environmental impact of transportation.

Continued focus on measures promoting EVs, should translate into higher penetration rates and transform the global vehicle landscape. This signals positive growth prospects for the electric vehicle battery coolant market.

Market Challenge - Compatibility Issues with Different Battery Materials that Impact Efficiency

One of the key challenges faced in the electric vehicle battery coolant market is the compatibility issues between different battery materials and coolants. Battery chemistries vary significantly across manufacturers with different anode and cathode combinations being used.

Finding a universal coolant that can efficiently manage heat transfer across all these different battery materials has been difficult. Incompatibility can cause issues like increased impedance between electrodes, decay of active materials and premature capacity loss over battery cycling.

Extensive research and testing are required to analyze how a particular electric vehicle battery coolant interacts at a chemical level with each battery composition. Selecting appropriate formulations of electric vehicle battery coolants without compromising on efficiency also remains a challenge given the technology and composition changes in EV batteries slated for the future. This is expected to create significant challenges for players in the electric vehicle battery coolant market.

Market Opportunity - Advances in Solid-state Battery Technology Requiring Enhanced Thermal Management

One of the major opportunities for players in the electric vehicle battery coolant market lies in advances being made in solid-state battery technologies. Solid-state batteries offer higher energy densities and better safety compared to traditional lithium-ion batteries. However, they also generate more heat during operation due to characteristics like higher electron and ion conductivity.

As solid-state batteries move closer to commercialization, there will be a growing need for developing innovative coolant solutions that can maintain ideal operating temperatures under higher heat loads. Leading battery and auto companies in the electric vehicle battery coolant market have been investing heavily in solid state technology research. It is expected to cater to the spurring demand for advanced coolants featuring higher heat transfer capabilities.

With existing thermal solutions, manufacturers in the electric vehicle battery coolant market have an opportunity to engineer products customized for emerging solid state battery chemistries and requirements.

Tesla's strategy to focus on thermal management:

Tesla recognized early on that effective thermal management of battery packs is critical for improving EV range and performance. In 2012, Tesla acquired a Canadian company called Hatteras to gain expertise in temperature control technologies. It invested heavily in R&D to develop advanced liquid cooling systems for its batteries.

Total's focus on next-gen coolants:

French multinational Total adopted a strategy to be at the forefront of developing new coolant technologies. In 2017, it launched Total Quartz Ineo ECS 5, an electrically insulating electric vehicle battery coolant. In 2021, Total introduced Total Electrolyt, a fluoride-free liquid dedicated for lithium-ion batteries used in EVs and energy storage.

Continental's acquisition-led strategy:

German auto parts maker Continental followed an acquisition-led strategy to consolidate its presence in the EV battery thermal management space. In 2017, it acquired Priamus System Technology, a specialist in thermal management for lithium-ion batteries. In 2021, it acquired Argus Cyber Security, strengthening its monitoring and cybersecurity capabilities for connected vehicle systems.

Insights, By Vehicle: Battery Electric Vehicles Driving the EV Battery Coolant Market in Terms of Vehicle Type

In terms of vehicle type segmentation, battery electric vehicles contribute 59.9% share to the electric vehicle battery coolant market. This is primarily attributed to the rising adoption of battery electric vehicles globally.

Battery electric vehicles only use electric powertrains for propulsion without an internal combustion engine. Therefore, efficient thermal management of high-capacity lithium-ion batteries used in such vehicles is crucial to ensure optimal performance and longer life of the batteries. Battery electric vehicles require sophisticated liquid cooling systems to regulate the temperature of lithium-ion battery packs during charging and discharging cycles. The use of specialized coolants engineered to have high thermal conductivity is witnessing increasing demand from electric vehicle manufacturers.

The push for electrification of transportation amongst policymakers and automobile companies is fueling the sales of battery electric vehicles. Stringent emission regulations targeting conventional vehicles and government incentives provided for electric vehicles have accelerated the consumer transition towards zero-emission mobility solutions. Moreover, an expanding network of EV charging stations and improved driving ranges of modern electric vehicles have addressed key consumer concerns, making battery electric vehicles a more viable mainstream option. As the battery electric vehicle fleet continues to expand rapidly, it will positively influence the consumption of advanced battery coolants within this growing market segment.

Insights, By Battery Type: Lithium-Ion Batteries Dominate the Battery Type Segment

Among the different battery types used in electric vehicles, lithium-ion batteries account for 61.3% revenue share of the electric vehicle battery coolant market. Lithium-ion technology is considered the ideal solution for powering battery electric vehicles and plug-in hybrid electric vehicles. This is due to its higher energy density and better lifecycle compared to other rechargeable battery types.

Lithium-ion batteries can be quickly charged and discharge large amounts of electrical current seamlessly. Therefore, efficient thermal management of lithium-ion batteries is extremely important. Compared to lead-acid and other legacy battery technologies, lithium-ion battery packs generate more heat and require advanced liquid cooling systems. Effective battery coolants are needed to maintain optimal operating temperatures within narrow windows.

With lithium-ion emerging as the dominant battery chemistry powering new energy vehicles, its widespread adoption is driving the global demand for specialized electric vehicle battery coolants designed for next-generation high-energy batteries.

• The Asia-Pacific region led with 46% share in electric vehicle battery coolant market in 2023, mainly due to high EV production in China, Japan, and India.
• North America is expected to grow the fastest in the forecast period due to increasing EV adoption in the U.S. and Canada.
• The lithium-ion battery segment accounted for 61% of the electric vehicle battery coolant market in 2023 due to its efficiency in EV applications.
• The Asia-Pacific electric vehicle battery coolant market is projected to grow from USD 980 million in 2024 to approximately USD 1,430 million by 2034 at a CAGR of 3.88%.

The major players operating in the electric vehicle battery coolant market include BASF SE, Valvoline Inc., Exxon Mobil Corporation, Shell Group, and GS Caltexa.

• In February 2024, DuPont introduced the AmberLite™ EV2X resin, a glycol-purification solution designed to extend the lifespan of electric vehicle (EV) coolants. This resin enhances thermal stability, improves system efficiency, and reduces maintenance requirements.
• In October 2023, China's Ministry of Transport proposed a new standard for water glycol-based coolants aimed at enhancing safety in battery electric vehicles (BEVs). This initiative follows tests conducted by the Research Institute on Highway (RIOH), which demonstrated the benefits of using coolants with significantly reduced, though non-zero, electrical conductivity.

• By Vehicle
  • Battery Electric Vehicles
  • Hybrid Electric Vehicles
• By Battery
  • Lithium-Ion Battery
  • Lead Acid Battery
  • Others