|PHEV/EV Models 2010-2012 by Battery Chemistry. Source: Pike Research. Click to enlarge.|
According to a new report from Pike Research, a rapidly growing global market for electrified vehicles—particularly plug-in hybrid and battery-electric vehicles—will create a Li-ion transportation battery industry with nearly $8 billion in sales worldwide by 2015, up from $878 million in 2010.
In the near term, the Li-ion market, and the electric vehicle (EV) industry in general, will be largely fueled by government subsidies, incentives, and production goals, the report says. The earliest part of the decade will see tremendous growth as dozens of manufacturers will start to meet the anticipated demands of newly electrified vehicles being launched by nearly every major global automotive company.
2012 will be the make or break year for the electric vehicle market. As government support for the sector winds down, demand from consumers and businesses will need to pick up the slack, or the industry faces the risk of oversupply.—Pike senior analyst John Gartner
Battery chemistries that prioritize energy capacity over power density can equally satisfy both the plug-in hybrid electric vehicle (PHEV) and the EV battery segments, enabling vendors to offer products to multiple vendors for multiple models. Hybrid vehicles, which require batteries that primarily provide short bursts of power for acceleration and allow the engine to be turned off when idling, have been served well by less expensive nickel-metal hydride (NiMH) batteries, and this class of vehicles will be much slower to shift to higher cost Li-ion batteries, according to the report.
Ultracapacitors, which provide high-power and low-energy density, will begin to appear in small quantities as complements to Li-ion batteries. As the technology becomes less costly, ultracapacitors have the potential to replace batteries in micro or mild hybrid applications.
Despite the potential to reduce fossil fuel consumption and greenhouse gas (GHG) emissions, and to provide the convenience of home charging, electrified vehicles will continue to be a niche market in the global transportation industry, the report finds. Even with broad global interest in EVs, less than 2.5% of the world’s fleet in 2015 will be driving at least part of the time on battery power only, according to the forecast.
Just as Li-ion batteries are relatively untested in real-world transportation applications, plug-in hybrid and all-electric vehicles are an unknown as a mass consumer offering. Automakers that have studied consumer driving habits estimate an average of approximately 33 miles per day. Based on this data, PHEV engineers have focused on designing vehicles with a 30 to 40 mile all-electric range. However, whether or not a broad audience of consumers would be willing to pay 50% or more for a vehicle than can drive most of its miles on battery power is unknown. Battery manufacturers need to prepare for the possibility that consumers will gravitate towards less expensive vehicles with smaller battery packs (for 10 to 20 miles of all-electric power), which has the potential to broaden the electrified vehicle market, but reduces the total amount of batteries required. Conversely, if all-electric vehicles with 80 to 100 mile range are able to satisfy consumer tastes as primary vehicles, a smaller universe of PHEVs may emerge—“Electric Vehicle Batteries”
Gartner anticipates that prices for Li-ion batteries will be a key determinant in the ultimate market acceptance of EVs, since battery cost will represent much of the price premium for electric vehicles. He forecasts that Li-ion prices will improve significantly over the next few years, falling 50% from $940 per kilowatt hour (kWh) in 2010 to $470 per kWh in 2015.
Regardless of the direction of the electrified vehicle market, the universe of Li-ion battery suppliers is likely to consolidate to a small number of major players that dominate the industry and a handful of much smaller niche companies. A limited number (likely four or fewer) battery chemistries that provide the best mix of performance, reliability, and cost will win out, with others likely to be abandoned by mid-decade.—“Electric Vehicle Batteries”
Pike Research’s report, “Electric Vehicle Batteries”, examines the key market dynamics for Lithium Ion batteries in plug-in hybrid and battery electric vehicles. Analysis includes industry and government drivers for the electrification of vehicles, and the role of advanced battery technologies in the development of this new sector. The report includes profiles of key players and market forecasts through 2015. An Executive Summary of the report is available for free download on the firm’s website.
Electric Vehicle Batteries, Pike Research, 2009