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Near-Term Prospects for Automotive Li-ion Batteries: 21% of Hybrid and EV Market by 2011

In 2011, the largest dollar volume for Li-ion automotive applications could come from the mini EV and EREV segment. Representative battery pack size is below each segment. Data: Dr. Menahem Anderman. Click to enlarge.

In the near-term (2011), lithium-ion batteries could grow to represent about 21% of the hybrid and EV advanced battery market, according to Dr. Menahem Anderman, President of Advanced Automotive Batteries and the organizer of last week’s Advanced Automotive Battery Conference 2009.

That projection, which excludes engineering prototypes, the China market, battery packs made from 18650 consumer cells, and micro-hybrid applications, represents about a $321-million market in 2011, compared to a projected $1,232-million automotive market for NiMH batteries ($1,553 million combined), Anderman said in a presentation at the conference.

(Reflecting the current difficulties in forecasting, Anderman, who publishes an annual market forecast for the sector, said he decided not to produce the 2009 report. As one example of factors contributing to that decision, a survey of projected oil prices returned values between $30 and $250 a barrel, he said.)

Dividing that forecast in to application segments—micro-, mild-, full-, and plug-in hybrids; mini-electric (e.g., the i-MiEV) and extended range electric vehicles; and full electric vehicles—Anderman sees the greatest market opportunity (in terms of the value of batteries sold) in the mini EV and extended range electric vehicle market, with $134 million in battery sales and 8,000 units. About half of those, he suggests, could be the mini-EVs of the i-MiEV type.

“You can subsidize small volumes at high dollars, or high volumes at small dollars; you cannot subsidize high volumes at high dollars.”
—Dr. Anderman

By 2015, he suggests, full hybrids (e.g., the Prius) will represent the top Li-ion business opportunity from a dollar value perspective, followed by moderate hybrids and light electric vehicles (bikes and scooters), particularly in Asia. Although EVs and extended range electric vehicles represent a lower volume opportunity, they could be moving up in list, depending upon the persistence of government subsidies, he noted.

Lithium-ion batteries continue to face a number of technical and cost challenges, essentially represented in cost at initial volumes, safety, manufacturing reliability and life.

Anderman ran a series of net present value analyses based on a range of gasoline prices, fuel saved, and pack costs. On a 5-year NPV analysis of fuel savings, he found that:

  • Micro hybrids makes economic sense for the consumer on a fuel savings basis when gasoline is at $5/gallon US.

  • Mild, moderate and strong hybrids begin to make economic sense when gasoline is around $7 per gallon.

  • PHEVs (blended 10-mile strategy), extended range electric vehicles (40-mile AER) and full EVs begin to make economic sense when gasoline is at about $10/gallon US.

Boosting that up to an 8-year NPV analysis modifies that somewhat:

  • Micro hybrids make sense at $3/gallon.

  • Mild, moderate and strong hybrids make sense at $5/gallon.

  • PHEVs and EREVs require $7/gallon

  • Full EVs still require $10/gallon.

Noting that PHEVs with a 10-mile range in blended strategy and possibly the Chevy Volt at demonstration volumes (several thousand units per year) by 2011, Anderman called the California Air Resources Board and the ZEV mandate the main market driver for these vehicles. Referring to the PHEV/EV market, Anderman said:

Lithium-ion is the preferred battery for a problematic market. Energy density, cost, life and reliability—safety—are still big challenges. If pushed too fast, it could backfire. The industry does not need a 2011 version of “Who Killed the Electric Car”.

One possible ARB scenario for achieving an 80% reduction in greenhouse gas emissions from transportation by 2050. Data: Tom Cackette, ARB. Click to enlarge.

California Air Resources Board. In a separate presentation at AABC 2009, Tom Cackette, ARB’s Executive Office, said that for the transportation sector in California to contribute to the required 80% reduction in greenhouse gas emissions by 2050 from a 1990 baseline, vehicle efficiency will need to improve approximately 3x.

Cackette described this transformation as occuring in three phases.

  • From now through model year 2016, the regulatory driver is Pavley 1 (AB 1493), the state regulation of new vehicle greenhouse gas emissions. (Although EPA has yet to grant the waiver, Cackette spoke as if it were a certainty.) This targets a 30% reduction in GHG, largely using conventional drivetrains.

  • Pavley 2—a follow-on set of regulations currently under development—will run from model years 2017 to 2025, and target further reduction up to 40-50%. These vehicles will likely be lighter in weight and require hybrid drivetrains.

  • The third phase runs from model year 2015 to 2050, and is driven by the new ZEV2 regulation. This targets the approximate 80% reduction from 1990 and will be electric drive and ultra-low carbon fueled vehicles. Most vehicles will need to be like these by 2050, Cackette noted.

One possible scenario he described for 2050 consisted of 10% conventional internal combustion vehicles achieving approximately 40 mpg US; 18% biofuel and hybrid-electric vehicles achieving approximately 60 mpg US; and 72% electric and hydrogen vehicles, achieving 80+ mpg US.

In addition to the improvements in vehicle technology, Cackette also noted the importance of reduced vehicle miles traveled by about 20%.



$130 million for 8,000 vehicles that have 16 kWh is still $1,000 per kWh. The price needs to get down to half that before non-government entities will be able to afford them.


The price actually needs to go down by an order of magnitude, that is, a factor of ten to be competitive with a conventional gasoline engine.

Account Deleted

In February 2009 Tesla said their 53 kWh battery cost 36000 USD or 680 USD per kWh. That price is unusual high because it is a first of a kind battery system that is produced in low volume and Tesla therefore needs to write off production equipment and R&D costs fast and this increases its price. Tesla does use 18650 consumer cells that are excluded from Anderman’s analysis but I still think 1000 USD per kWh for these batteries is too high. I don’t believe GM pays 16000 USD for the Volt battery if they order 25000 per year. It will be more like 8000 USD or 500 USD per kWh. This is also what A123 has indicated at one point would be the price for such type of orders. If Tesla can sell 10000 Model S in 2012 and if they continue using these lower quality consumer cells that are less costly they can probably do a 53 kWh battery for 18000 USD or 340 USD per kWh. This is also indicated by the price of 57000 USD for the Model S.

Also EVs with longer than 150 miles range like Tesla’s models do not need super quality cells that can cycle many 1000 of times which is necessary for PHEVs or hybrids.


Why is no mention made of nickel metal hydride batteries? With the encumbrance patent expiring in 2014 this will once again open up the market to quality batteries at good prices, with no shortage of nickel, as is the case with lithium. They cost $500 / kWhr now, which will only go down with time, so for a 53 kWhr pack that is a maximum of $27,000. Just get Sudbury to start cranking them out en masse and watch the price drop dramatically.

Lithium ion batteries will tide us over until 2014, helping to develop the electric car industry, after which NiMH will then take over. Beyond 2014 no regulations will be required, as the market will automatically switch over by itself.


IMO NiMH should have been the bridge battery the last 10 years with large format leading to PHEVs. You could say that Chevron accelerated lithium battery technology, which was not their intention.


Henrik, I recently read that LG Chem is going to charge $500 per kWh on the batteries that they deliver in the first year, and that the prices will come down from there. The question is, how fast and far will their prices come down and will A123 improve to the point that they are back in the competition?
It is interesting how the price per kWh is improving so much in just 12-18 months. In mid-2008 the price per kWh was around $625. In 2007 it was closer to $1000

Andrey Levin

Toyota currently pays about 2000 US$ for 1.3 KWh NiMh battery, from which only about one third of energy capacity could be used without compromising battery life. Which puts it over 4.5 grand per useful KWh.

NiMh battery optimized for specific energy, not specific power, will cut this price by about 30%, but it is still over 3000$ per useful KWh.


Andrey Levin

The smaller battery the more expensive. Therefore 1 kWh battery is not reference case for 53 kWh batteries and vice versa. The analysis performed is on safe side with assumptions of the driver train prices. Anyway it tells that in Europe (Holland) the EV power train is feasible even today.


Andrey, $2,000 is what we are asked to pay for a replacement Toyota 1.3 kWh NiMH battery. They pay a lot less for them from Panasonic EV (around $700).

Although their cycle life etc remains to be verified, the BYD LiFePO4 cells are thought to be made for less than $300 per kWh right now.

Account Deleted

In any case if battery prices for EVs are going to drop importantly it requires volume sales. In this connection a very interesting webpage to follow is a new one from Plug in America that is updated monthly and that contains all announced EVs and PHEVs in the world. It gives a great overview.

My bet is that the best selling such cars will be Tesla in 2009. It will be Tesla, BYD, Cherry and Fisker in 2010. For 2011 it will be Tesla, BYD, Cherry, Fisker, GMs Volt and possibly also Renault and Nissan.


Nickel metal hydride batteries weigh more than lithium ion batteries it near almost twice the weight. In addition there are really no assembly plants with the capacity to build many large car batteries.

More weight and the volt car would have to be a 2 seater like the EV1.

Stinks is the Volt uses only 8kwh of the 16kwh battery pack because the batteries are so poor technologically that they have to stay in a certain battery band of power or risk only lasting 2-3 years.


The BYD car's a piece of junk. The quality control does not exist at the factory so 20-30% of the batteries fail right away. They use migrants, not machines.

Their car hasn't been selling either in China, although pricey by their standards, it doesn't do what they claim in terms of performance; more like 5-6 miles at up to 35 mph; not the 62 miles at a constant 55 mph.


There is nothing wrong with progressive application of electrified vehicles, i.e from HEVs to PHEVs to BEVs over two decades (2000 to 2020)

As vehicles get more and more electrified, on-board e-storage units (batteries + capacitors?)will have higher performances at lower price.

HEVs are already competive with ICE + $3 to $4/gal gas.

By 2012-2014, PHEVs will be practical and competitive with ICE + $6 to $7/gal gas.

By 2017-2020, highway BEVs will have 500+ Km range between quick charges and will quickly become competitive with ICE + $8/gal gas.

Retail price for gas can be easily adjusted with variable progressive Fed taxes. The extra revenues could be used to repay some of the huge debts currently being imposed to fight the recession.

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