Total Battery Consulting
December 5, 2012

Global automotive Li-Ion battery production capacity outstrips demand five to one as automakers refocus on hybrids and away from full electric vehicles.

Industry consultant Dr. Menahem Anderman has released the Key Findings of his xEV Industry Insider Report explaining why automakers are redirecting their development efforts from Electric Vehicles (EVs) to Hybrid Electric Vehicles (HEVs). Multiple configurations of HEVs with various functionalities, voltages, power levels and energy-storage requirements are under development with potential for large vehicle sales volume later in the decade.

The report notes that despite heavy subsidies by governments and automakers, 2012 EV sales are coming short of meeting many automakers’ sales and production plans. Conversely, those of HEVs are in line with plans. As a result, production plans for EVs, and Plug-in Hybrid Electric Vehicles (PHEVs) for the next 4-5 years are being slashed. The report projects a global EV/PHEV 2016 market at around 0.6 percent of anticipated 2016 new vehicle sales, leaving the over-invested battery industry in a trying environment. On the positive side, opportunities will emerge for HEV batteries, with battery design, size, and dollar value per vehicle varying considerably.

The xEV Insider Industry Report analyzes the market drivers and challenges for vehicle electrification and notes that the higher the level of electrification, the more problematic the cost/performance ratio of the vehicles—which explains the weak customer demand. Consequently, government policies including the California Zero Emission Vehicle regulation, the European tailpipe CO2 regulations, and the Chinese ‘new energy vehicles’ rules—will continue to have an overriding impact on the development of the xEV industry.

According to the Report’s baseline estimate, the global EV market will grow from 65,000 units in 2012 to 450,000 in 2020, the PHEV market from 57,000 units in 2012 to 750,000 units in 2020, and the HEV market from 1.57 million units in 2012 to about 4.1 million in 2020. The associated Li-Ion automotive battery business will expand from $1.4 billion in 2012 to $8.5 billion in 2020.

Dr. Anderman’s comprehensive report is based on his on-site interviews with senior battery technologists and business development executives at 15 global automakers and 25 of their current and prospective battery suppliers. It includes a detailed assessment of the current status of Li-Ion battery technology, including design, performance, durability, safety, and cost, and prospects for improvement. The Report also explores the manufacturing status of battery producers and which ones are best positioned to succeed in the world market—with individual forecasts for each battery supplier.

Dr. Anderman routinely consults with major automakers, battery makers, and related stakeholders. He is founder and chairman of the industry’s premier international forum, the Advanced Automotive Battery Conference (AABC). The 13th annual conference is scheduled for February 4 to 8, 2013 in Pasadena, California.