Micro-hybrids will grow nearly eight-fold to 39 million vehicles in 2017 and create a $6.9 billion market for energy storage devices, according to a Lux Research report titled, “Every Last Drop: Micro- And Mild Hybrids Drive a Huge Market for Fuel-Efficient Vehicles.”
Micro-hybrids, which use a small battery to provide varying degrees of efficiency-boosting features, will dominate the automotive market, gaining 42% of the overall light-duty vehicle market, according to the report. Simultaneously, mild hybrids will rise from near-zero to 1.5 million vehicles in 2017, accounting for 1.6% of the auto market.
Micro-hybrids will take over the automotive market, while mild hybrids will leverage the excessive build-out of Li-ion capacity to grow. Micro-hybrids and, to a lesser extent, mild hybrids, provide a cost-effective solution to fuel savings to bridge the gap to more disruptive technologies like alternative fuels, plug-in vehicles, and fuel cell vehicles.—Kevin See, Lux Research Analyst and lead author of the report
To estimate adoption rates for micro-hybrids and mild hybrids, Lux researchers factored in the adoption of other fuel-saving technologies and modeled cost impact variations, besides estimating the costs of battery replacement and maintenance for these alternative vehicles. Among their conclusions:
Europe will continue its leadership in the micro-hybrid market, growing over three-fold to 12.6 million units in the next five years. China will see explosive 81% annual growth to reach 8.9 million units in 2017 and the US will zoom from minuscule levels today to more than 8 million in 2017.
A low price premium, fuel savings of up to 10% and a relatively easier manufacturing process will propel medium micro-hybrids to the top of the alternative auto market over the next five years. These vehicles will grow at 36% CAGR to 22.2 million vehicles in 2017, driven largely by the European market and automakers like Volkswagen.
AGM battery technology will grow nine-fold. Absorbed glass mat (AGM), lead-acid batteries will dominate the market for storage of micro-hybrids, growing at 46% annually to nearly $4 billion in 2017. In mild hybrids, Li-ion will carve out a niche, growing from near-zero to nearly $570 million in 2017, capturing a 47% market share among plug-in vehicles.