As the global market for electrified vehicles grows rapidly over the next several years, lithium ion (Li-ion) batteries in a variety of chemistries will be the technology of choice for auto manufacturers.
The opportunity for Li-ion batteries will be primarily driven by plug-in hybrid and all-electric vehicles, which require much larger battery packs than conventional hybrids. According to a new report from Pike Research, this market growth 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. “2012 will be the make or break year for the electric vehicle market,” says senior analyst John Gartner. “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.”
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.