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Pureplay BMS startups - will they be able to add enough value?

Notes by Narsi

Battery management sysems (BMS) can possibly considered the brain of batteries. By controlling a number of factor during charge and discharge and by constantly monitoring the health of batteries, BMS plays a critical - and sometimes underappreciated - role in the world of battery storage.

The worldwide BMS market size is growing at a significant rate, about 20% CAGR currently, very attractive by any yardstick. The total global market value for this segment is expected to be about $8 billion currently and expected to be over $30 billion by 2030.

But for all its importance, how attractive is BMS as a domain to focus on for Indian startups?

At first sight BMS appears to be a tailor made opportunity for Indian startups known for their ability at software solutions. But pureplay BMS startups may have to consider the following:

First and foremost, the amount of economic value that a BMS represents. In most cases, BMS constitutes just 5% of the total battery cost. This in itself limits the overall market potential for BMS, whose global market size in 2022 is about $8 billion. $8 billion (for BMS for all battey types) might look large in absolute, but compare that with the total EV battery market size alone: about $50 billion in 2022 and expected to reach about $575 billion 2030. The Indian market for BMS will only be a small fraction of the global market even by 2030.

Second, many battery pack makers are themselves putting together teams and talent together to make the BMS. Until a few years back, I used to hear from most Li-ion battery pack startups that they were buying the BMS from China. Now, many of them appear to be investing in developing their own BMS, though I'm not sure how well they are able to do it. Either way, these battery pack companies/startups are unlikely to give business to pureplay Indian BMS startups.

The above factors seem to indicate that pureplay Indian BMS startups might have it tough. In my opinion, some of the pioneers such as Ion Energy with their deep and unrelenting focus on BMS might not fight it out but could even go on to become global leaders, but this field may not hold potential for many more Indian startups.

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