Energy storage, driven largely by electronics and plug-in vehicles, will grow at a compound annual growth rate of 8% to $50 billion in 2020, with significant shifts coming from the transportation industry, according to a new report by Lux Research. Transportation applications will outpace electronics growth—attaining an 11% CAGR to become a $21 billion market by the end of the decade.
The faster growth of the transportation segment will will close the gap with electronics, which still will remain the single largest market valued at $27 billion. The market for stationary applications will be worth $2.8 billion, as it awaits cost breakthroughs, Lux forecasts.
Additionally, incremental evolutions such as start-stop technology are leading to significant changes in the energy storage market. With global sales of 59 million, a 53% market share and $6.1 billion in annual revenue, micro-hybrids will, for the first time, overtake the conventional internal combustion engine and emerge the most popular drivetrain by 2020.
In the new report—“Finding Growth Opportunities in the $50 Billion Energy Storage Market”—Lux Research analysts evaluated opportunities as the energy storage market exhibits tremendous growth and significant shifts. Among their findings:
Electric vehicles are the largest opportunity in transportation. With modest sales of 440,000 units, electric vehicles still will use $6.3 billion worth of energy storage—more than the micro-hybrids, which will have sales two orders of magnitude higher at 59 million units. The United States will lead EV sales for most of the decade, peaking at 167,000 units in 2019 before expiring subsidies dampen sales. That will help China nearly catch up with the US in 2020—attaining sales of 145,000, versus 148,000 in the US.
Smartphones are the leader in electronics. The ever-growing popularity of smartphones, allied with a gradual increase in their battery capacity, will see this market segment growing at a 12% CAGR to $8.4 billion in 2020. Tablet computers follow with a 6% CAGR to $12 billion, the single largest energy storage consumption by a single application. In contrast, the energy storage market for feature phones, laptops and e-readers will shrink while wearables will not live up to the hype.
Residential leads stationary applications. Driven by solar integration, residential represents the biggest opportunity in stationary energy storage applications —leaping from less than $0.1 billion to $1.2 billion in 2020. A robust downstream industry, innovative financing and strong policies in countries such as Germany and the US are favorable factors. UPS and backup applications provide the next largest opportunity, with $0.7 billion in 2020 revenues, while renewables shifting at the utility level with $0.3 billion, rounds out the top three.
The report is part of the Lux Research Energy Storage Intelligence service.