Future of Global Advanced Batteries Market Outlook to 2020: Opportunity Analysis in Electronics and Transportation23 Apr 2010 • by Natalie Aster
GBI Research, the leading business intelligence provider, has released its latest research, “Future of Global Advanced Batteries Market Outlook to 2020: Opportunity Analysis in Electronics and Transportation” that provides key data, information and analysis on the market opportunities in the advanced batteries market. The report provides a detailed assessment of sales growth opportunities arising from PHEV market. At the outset, the report analyses the attractiveness of HEV battery market. The report’s coverage of the advanced batteries market is comprehensive with dedicated sections on regulatory framework, and key supplier profiles.
The report is built using data and information sourced from proprietary databases, primary and secondary research, and in house analysis by GBI Research’s team of industry experts.
Lithium-ion Batteries will Displace a Large Share of Nickel-metal Hydride Batteries in Hybrid Electric Market by 2020
The Lithium-ion (Li-ion) battery market for hybrid electric vehicles (HEVs) is a rapidly emerging market with massive potential. The rapid growth of electric vehicles will offer growth opportunities for Li-ion batteries in the future. Although Li-ion batteries for hybrid electric vehicle are still in an emerging phase, they are most likely to displace Nickel-metal Hydride (Ni-MH) share in the future due to their growing prominence. Currently, Ni-MH batteries dominate the HEV battery market with a 97% revenue share, however, Ni-MH battery technology has reached its maturity and the pace of technological innovation in the market is much slower than that of Li-ion battery technology. Li-ion battery technology, on the other hand, offers better overall performance characteristics, high specific energy density, long cycle life, no memory effect and is compact in physical dimensions and lightweight compared to Ni-MH battery chemistry.
GBI Research estimates that the HEV market will grow rapidly in the future contributing 10% of the new vehicle sales in 2020. The Li-ion battery technology is expected to take over 60% share of HEV battery market by 2020.
Nickel Cadmium Batteries are Expected to Lose Market Share to Lithium-ion Batteries and Nickel-metal Hybrid Batteries
The Ni-MH battery is taking over Nickel Cadmium (Ni-Cd) battery in toys, cordless phones, and household devices segments, while Li-ion battery in power tools. Ni-Cd offers only half capacity than Ni-MH for the same weight or volume and one-fourth of Li-ion batteries. The Ni-Cd market is shrinking due to it poor price-performance ratio compared with other battery chemistries. In 2009, sales of Ni-Cd rechargeable batteries decreased by 43% in the electronics segment, continuing the downward trend. Furthermore, the production of Ni-Cd Batteries is declining as a result of stringent legislations restricting the use of cadmium in many countries. The Environment Directorate of the European Commission, along with certain Nordic countries, has taken to restrict the use of cadmium-containing products.
Porter’s Five Force Model asserts High Attractiveness of the HEV Battery Market
The five force analysis shows that the attractiveness of the battery market in HEV segment is high. The threat of substitute products is low and so is the threat of the entry of new competitors. The barriers to entry for the battery markets are the huge capital requirement and technical expertise. These barriers discourage new entrants. The bargaining power of the suppliers is moderately low because the differentiation of inputs is low in advanced batteries industries. Thus, the switching costs are low for the inputs.
The bargaining power of buyers is moderately high due to high buyer concentration and threat of backward integration; however the impact of this potentially negative force will be mitigated as more auto manufacturers enter into HEV market.
Japanese Dominance is Fading Away, Advanced Batteries Production Bases Shifting to China
Advanced battery manufacturing is dominated by a few key countries, Japan, China and South Korea together produced 98% of the advanced batteries in 2009. China has become one of the largest battery production bases in the world. The Japanese and companies in the west are entering into Joint Ventures (JV) and partnerships with Chinese battery manufacturers. Chinese companies maintain a cost advantage over their competitors through the employment of a labor intensive production process rather by using automated production lines to manufacture batteries. The success of Chinese companies in the advanced battery business has been due to their unique business model — replacing a conventionally capital intensive business model with a labor intensive one. These companies are able to implement this model successful because of the availability of cheap labor in China. Furthermore, Chinese companies receive more incentives if they are producing batteries for export and hence the Chinese battery manufacturing industry is growing at a rapid pace.
Global PHEV Battery Market holds Enormous Revenue Potential and is Expected to Reach $17.3 billion by 2020
The automotive industry is on the brink of experiencing a major transition to electrified powertrains. GBI Research believes that automotive industry will evolve from HEVs to PHEVs in the near future and the pace of evolution will be much faster than expected. Automakers are investing in the development of PHEVs in order to make them mainstream vehicles. The increased demand for PHEVs will thus offer huge sales growth opportunities for advanced batteries.
GBI Research estimates that global PHEV sales as a percentage of total light duty vehicle sales will reach 1% in 2015 and 5.3% in 2020. While the internal combustion engine (ICE) continues to dominate the major automobile markets in 2020, the number of electric drive vehicles will increase significantly in the near future. GBI Research estimates that the global PHEV battery market will reach $17.3 billion by 2020. The growth potential of PHEVs market is promising for the growth of the next generation of batteries, Li-ion batteries in particular.
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