The global cordless power tools market was valued at USD 24.50 billion in 2022 and is expected to reach USD 37.87 billion by 2028, growing at a CAGR of 7.53%. Various factors propel the growth and development of the global market. One significant driver is the rapid adoption of Industry 4.0 practices, coupled with the integration of cutting-edge technologies such as IoT and AI. This convergence of advanced technologies enhances the efficiency and performance of power tools, contributing to market expansion. In addition, favorable government regulations aimed at curbing noise pollution play a crucial role in supporting the growth of the global cordless power tools market. Furthermore, the surge in construction and building activities globally has a direct impact on market growth. As infrastructure projects and construction endeavors increase, the demand for cordless power tools for various applications rises consistently.
Cordless power tools are portable devices powered by batteries; they have a wide range of applications, including commercial and residential do-it-self activities. These tools are compact with wireless design and offer a brushed and brushless motor option. Also, the increasing adoption of lithium batteries drives the demand for cordless power. Furthermore, technological advancements have led to the development of numerous tools and machinery utilized across various industries. Power tools surpass conventional hand tools in both professional and residential settings due to the need for improved efficiency. Moreover, owing to the growing construction activities in developing countries such as India, construction industries are significantly introducing innovative tools that reduce manual labor and take less time for work. The infrastructure advances and construction sector offer a promising opportunity for the cordless power tools market, which is anticipated to drive further innovation. Factors such as rising labor costs, increased home improvement activity, and the popularity of do-it-yourself projects have increased demand for user-friendly tools.
MARKET TRENDS & DRIVERS
Advances in Li-ion Batteries
The increasing need for extended battery life has driven significant advancements in batteries to enhance backup capacity. These developments have brought about remarkable improvements in the performance and efficiency of Li-ion batteries, encompassing enhancements in energy density, charging speed, cycle durability, safety, and stability. While the transition to Li-ion batteries may incur an additional cost ranging from 10% to 49%, the preference for these efficient Li-ion batteries is steadily growing, particularly for applications in electric vehicles (EVs) and electronic communication devices. At present, the cordless power tools market mainly uses Li-ion batteries in their tools, giving tough competition to NiCd batteries. Moreover, from the advantages in storing aspects, Li-ion batteries have less harmful effects on the environment.
Increased Prominence of Asian Manufacturing
Since the first industrial revolution in the late 18th century, a few European countries and the United States have exerted significant control over the manufacturing sector. These nations have traditionally held considerable influence over essential global resources, positioning them advantageously to promote industrial development and lead the way in innovation through advancements in manufacturing technologies, materials, and solutions for end-users. Notably, some of the world's largest automotive, aerospace, and defense manufacturers are increasingly localizing their production activities in the Asia-Pacific (APAC) region while also engaging in technology sharing.
Fluctuations in Raw Materials Pricing
The primary expense in power tool production arises from raw materials, which account for the most considerable portion of costs. These raw material expenses typically make up approximately 50% to 60% of the total production cost for these items. The prices of essential raw materials utilized in power tool manufacturing, including steel, plastic, rubber, fasteners, and batteries, have exhibited significant fluctuations in recent years. This instability in raw material prices poses a substantial risk to manufacturers' profit margins in the cordless power tools market. Furthermore, other operational costs, such as labor wages, are also experiencing a noticeable upward trend.
INSIGHTS BY TOOL TYPE
The global cordless power tools market by tool type is segmented as drilling and fastening tools, sawing and cutting tools, demolition tools, material removal tools, routing tools, and others. The drilling and fastening tool type held the most significant segmental share in 2022. The most common cordless power tools are drilling and fastening tools such as drills, impact wrenches, impact drivers, screwdrivers, and nut runners. The sawing and cutting tools segment is the second-largest segment; the higher share of the segment is favored by the fact these tools are mostly used for wooden and metal works that need precision cutting. They are also used in DIY activities as most vendors offer user-friendly cutting tools, such as jigsaws, for home improvement and wood-crafting activities.
INSIGHTS BY CATEGORY
The mass category segment dominated the global cordless power tools market in 2022. Mass cordless power tools are mainly used to clean and maintain moderate-sized homes or yards. The segment is projected to grow significantly during the forecast period due to high customer preference.
INSIGHTS BY END-USER
The industrial end-user segment emerged as the leading source of revenue in the global cordless power tools market in 2022, and this pattern is expected to persist over the projected period. Hand tools have extensive use across various industries, including automotive, aerospace, electronics, energy, construction, shipbuilding, and various others. Within this spectrum, the construction sector takes the lead in generating revenue, driven by the region's increasing construction and renovation endeavors. Following closely behind is the automotive industry, which specializes in the assembly of precision components. Drilling and fastening tools are the major tools that are used for tightening fasteners, engine mounting, and other joint works. Sanders and angle grinders are used for smoothening and polishing the vehicle parts and chassis. With the global electric vehicles market growing at 60% every year, expansion and increased production facilities can result in additional demand for cordless power tools, especially in fastening tools, routing, and the material removal tools segment.
North America held the most significant global cordless power tools market share, valued at over USD 6 billion in 2022. The region is projected to uphold its leading position throughout the forecast period, primarily driven by revenue generated in the United States. North America boasts a multitude of significant industries, encompassing automotive, construction, aerospace, electronics, and packaging, among others. Particularly noteworthy is the North American automotive sector, which hosts the world's largest population of electric vehicles, a response to the growing consumer demand for environmentally friendly products.
The global cordless power tools market is illustrated by the low market intensity with high competition. The present scenario leads vendors to alter and improve their unique value propositions to achieve a strong market presence. Currently, the industry is moderately fragmented and is dominated by vendors. The presence of differentiated global and regional vendors characterizes the market. As international players increase their market footprint, regional vendors will likely increase difficulty competing with these global players. The rivalry is solely based on durability, technology, services, price, and customization. The major vendors in the global cordless power tools market include Stanley Black & Decker, Techtronic Industries, Robert Bosch, Makita, and Hilti. Further, vendors have to develop new technologies and need to remain abreast with upcoming innovations to have a competitive advantage. Many international players are expected to expand their reach worldwide during the forecast period, especially in the fast-developing countries in APAC and Latin America, to gain more market share.