If the electric car market is a Daytona 500 race, then the market is only on its first lap. Will the industry speed ahead and provide a big market for lithium-ion batteries? A report by IHS on Monday gives a resounding “yes” and predicts that carmakers will take over laptop computer manufacturers as the biggest customers of lithium-ion batteries by 2015.
The report contends that lithium-ion battery prices will fall quickly to make them the top choice for electric cars in the next 10 years. In the process, the car market will be “the leading market for lithium-ion batteries by 2015, surpassing the current top application, notebook PCs,” IHS said.
Sales of lithium-ion batteries for cars are set to reach $11.9 billion by 2015, when notebooks will account for $6.6 billion, said Jonathan Cassell, a spokesman for IHS. The batteries also are commonly found in cell phones, but IHS declined to provide figures for this segment.
Reigning the market
In the electric car market, lithium-ion batteries will likely become the cheapest type of rechargeable batteries in 2020, the market research firm said. Right now lithium-ion batteries are two to three times more expensive than lead acid, nickel-metal-hydride and sodium-sulfur batteries, said Satoru Oyama, an analyst with IHS.
Early versions of electric cars use electric motors and batteries to complement gasoline engines. Toyota’s Prius is a popular example, and it comes with a nickel-metal-hydride battery. But lead-acid batteries are the most popular rechargeable batteries today. Hybrids such as the Prius recharge batteries internally rather than by being plugged into a charging system at home or public stations. Newer versions of hybrids, such as the Chevy Volt, are plug-ins. Nissan’s Leaf, another new entrant into the market, is all electric, as is Ford’s Focus Electric that is set for launch later this year.
Too early to predict?
There is no question that lithium-ion batteries have emerged as the battery of choice for carmakers. In general, lithium-ion batteries can pack more energy into the same space than those using other materials, and they can maintain their capacities longer. Preventing them from overheating and causing a fire has been a major concern of carmakers, however, prompting manufacturers to work on chemistries that are more stable, as well as electronic management systems that monitor and control operating temperatures.
It seems too early to tell how well consumers will embrace electric vehicles. The two mainstream electric passenger cars that sport lithium-ion batteries, from General Motors and Nissan, made their market debut only late last year. Automakers have been cautious about rolling out electric cars in any large volumes, choosing instead to start small.
Opinions vary on whether the electric car market is taking off as expected. Some battery manufacturers were counting on much stronger sales but are finding that reality doesn’t jibe with their hopes. Electric car makers such as Fisker Automotive have delayed launching models and in some cases are running into money troubles (that would be Think Automotive).
In fact, the market is seeing a bumper crop of lithium-ion batteries for the automotive market, and this trend will likely continue in the next few years, said Lux Research.
In a recent report, Lux said the prices of lithium-ion batteries aren’t falling fast enough for them to overtake lead-acid batteries soon. The research firm’s prediction is that lead acid “will maintain a comfortable lead in both of these high-volume and growing markets. Overall, the market for lead-acid batteries will grow from 83 GWh and $9.4 billion in 2011, to 165 GWh and $16.1 billion in 2016.” Many of these lead-acid batteries will power e-bikes.
Images courtesy of Nissan and Ford