Power Tools Industry Heads Into a Battery- and Sensor-Led Upgrade — What Investors Should Watch

Big Picture: A Market Poised to Nearly Double on Batteries, Smart Features and Automation

Future Market Insights says the global power tools market is on track to rise from roughly USD 39.5 billion today to about USD 67.5 billion by 2035. That path implies a clear, multi-year expansion driven by a mix of steady replacement demand and faster adoption of new tech — cordless battery systems, connected or “smart” tools, and designs that plug into automated workflows. The headline picture is simple: tools are getting smarter and less tied to cords, and that changes how makers price products, source components and win business from contractors and factories.

Smart, Cordless and Automation-Ready: Why Technology Is the Growth Engine

The FMI note highlights three technology shifts: better batteries and cordless platforms, tool-level sensors and software, and products designed to work with automation or robotics. For manufacturers this trio matters in three ways.

First, battery improvements are turning what used to be a premium feature into a baseline expectation. Higher energy density and faster charging let cordless tools match corded performance in many tasks. That lets brands push higher prices for battery systems and sell battery-as-a-platform — extra batteries, chargers and accessories become steady revenue streams.

Second, adding sensors and connectivity gives vendors recurring revenue options. A connected drill that logs usage and predicts maintenance can come with software or service contracts. For publicly traded tool makers, that could gradually lift gross margins away from the low single-digits typical of commodity power tools toward software-influenced hardware margins.

Third, the move to automation-ready designs links tools to factory upgrades. Tool OEMs that certify products for robot arms or automated assembly lines can access larger commercial contracts and longer product life cycles. That changes inventory turnover and reduces reliance on seasonal consumer demand.

Where Growth Will Come From: Construction, Manufacturing and Regional Hotspots

End markets break into three clear buckets. Residential and pro construction remains the biggest single driver — growth in renovation activity and a steady pipeline of smaller projects keep the base demand stable. Manufacturing and industrial assembly are the faster-growing opportunity, as automation and tighter tolerances push buyers toward higher-end, connected tools. Finally, aftermarket and repair activity (service centers, battery replacements, accessories) contributes recurring spend.

Regionally, the strongest expansion looks set to come from Asia Pacific, where rising industrial activity and building programs are increasing demand for cordless and automation-ready tools. North America and Europe show steadier growth, but higher willingness to pay for professional-grade cordless and connected solutions makes those markets more profitable per unit.

What Investors Should Watch: Suppliers, Batteries, M&A and Earnings Call Red Flags

Which public companies get meaningful exposure depends on product mix. Watch Stanley Black & Decker (SWK) and Snap-on (SNA) for exposure to professional markets and established cordless platforms. Large distributors like Home Depot (HD) and Fastenal (FAST) are indirect plays: they capture more margin if higher-priced cordless and smart tools become mainstream. Battery and materials names — Albemarle (ALB) and Sociedad Química y Minera (SQM) — matter for raw-material price swings that can compress OEM margins.

Positive setup: companies with proprietary battery platforms, growing software services, and direct industrial channels should see the best mix improvements and margin tailwinds. Negative setup: firms dependent on low-end consumer tools or that carry outdated corded product lines risk being squeezed on price and inventory obsolescence.

Expect M&A themes around platform consolidation: tool OEMs buying battery specialists or software firms, and distributors adding digital services. On earnings calls, look for commentary on battery cost trends, software subscription take rates, warranty claims tied to connected tools, and industrial order cadence. Red flags include rising warranty costs, slowing replacement battery sales, or sharp inventory buildups of corded models.

Caveats and Sensitivities: Supply Chains, Commodities and Macro Risks

The projection depends on several fragile assumptions. First, battery raw-material prices (lithium, cobalt) can spike, lifting costs faster than manufacturers can pass them on. Second, supply-chain bottlenecks for electronic components could delay smart-tool rollouts, slowing adoption. Third, macro risks — a construction slowdown, weaker industrial capex, or sustained high rates — would cut demand and push the market back toward the lower end of the FMI range.

Adoption risk is real: professional buyers may delay switching to higher-priced connected tools unless the value (time saved, downtime avoided) is clear and measurable. Finally, competition from low-cost manufacturers could limit pricing power and compress margins, despite rising overall market size.

Source Notes and Reporting To-Do: What to Ask Next

The market numbers come from a Future Market Insights release distributed via PR Newswire. FMI’s headline range and drivers are useful, but there are gaps: the release doesn’t show the base-year methodology, nor the assumed split between consumer, pro and industrial segments. It also leaves unclear the share of growth FMI expects from hardware upgrades versus recurring services.

Next reporting steps: get company-level exposure from recent filings, pull battery supply contracts and price clauses, and check regional construction and factory-capex data. Visuals that will help readers: a timeline chart showing market-size growth under FMI’s scenario, a pie showing segment mix today versus 2035, and a table mapping public companies to exposure (OEMs, batteries, distributors, software).

Photo: Nishant Aneja / Pexels

Sources

• prnewswire.com