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Higher projections for EV battery market at AABC Europe 2011


The Advanced Automotive Battery Conference (AABC) took place in Mainz, Germany on 6-10 June 2011. Chaired by Menahem Anderman, AAB President, key players in the battery industry as well as consultancy companies gave projections for the EV battery market by 2015 and 2020. In this first update from the AABC Conference that attended as official media partner, we provide an overview of expected total market size and battery cost development.

Automotive Li-ion battery market could represent EUR44 billion in 2020

Market forecasts for HEVs, PHEVs, EVs and their batteries were presented as part of the Advanced Automotive Battery Technology, Application and Market (AABTAM) Symposium on 8 June 2011. Research institutes and consultancies differed widely in their projections regarding battery market trends for the next decade.

For AAB, the overall EV battery market will be worth about $6 (€4.15) billion by 2015 and $11 (€7.60) billion in 2020. Sanyo is expecting to be the market leader with about $510 (€353) million turnover and AESC (Automotive Energy Supply Corporation), a joint venture established in 2007 by Nissan and NEC, following closely with projections of around $475 (€328) million. The EV battery cells market on the other hand would represent $2,6 (€1.8) billion, with AESC as the market leader, with $400 (€277) million expected turnover, and Sanyo as second, with calculated turnover of $170 (€118) million by 2015.

According to Avicenne Energy, 100% of batteries shipped with electric vehicles (EVs) and plug-in electric vehicles (PHEVs) could be Lithium-ion in 2015. In their last report "Worldwide Rechargeable Batteries Market 2010-2020", Avicenne Energy assumes EV battery production will grow from 200,000 in 2015 to 1 million in 2020 for electric vehicles, and from 100,000 Lithium-ion batteries in 2015 to 400,000 in 2020 for PHEVs. Avicenne Energy also forecasts one million battery units to be sold worldwide by 2020. However, in his presentation, Mr. Pillot, Director of Avicenne Energy, said "the hybrid electric vehicle market is NiMH battery driven, a trend set to continue". PHEV and EV batteries shall determinately be Lithium-ion, with chemical corporations focusing on a market that could be valued, in terms of electric vehicles revenue, from $3 {€2) to $5 (€3.5) billion.

Finally, consultancy firm Roland Berger expects the automotive Li-ion battery market to represent a global market of around €44 billion in 2020 (and €13 billion even in a low scenario).

Battery cost development

The expert speakers were less divided with regard to battery cost development. All agreed that this will greatly depend on production volumes and material prices. Overall, we can expect battery price to drop around 40% by 2020 from 2010 levels.

AAB is expecting that the average cell price will be around $550/kWh (€381/kWh) for HEV, $340/kWh (€235/kWh) for PHEV and $280/kWh (€194/kWh) for full EVs by 2020. However, price could be greatly influenced by safety measures concerning cell/pack design or manufacturing processes. Also related to cost is the battery life that will be limited by either time - in case of full EV - or life cycle - for PHEV - with operating temperature being the most critical factor.

Avicenne Energy expects the Li-ion battery pack cost for EV to be 350-400$/kWh (€242-277/kWh) by 2015 for production over 100,000 packs/year. This price is then expected to quickly drop to around 150$/kWh (€104/kWh) by 2020 to achieve the U.S. Advanced Battery Consortium (USABC) 2020 Goal.

Wolfgang Bernhart, Partner at Roland Berger, said "By 2015, the material price will be brought down from 195$/kWh (€135/kWh) to 170$/kWh (€118/kWh), due mainly to decreasing prices in cathodes". The consultancy firm expects that increasing cell manufacturing efficiency and decreasing materials prices will bring down total battery costs below €250/kWh in 2020 from $650/kWh (€450/kWh) in 2010.

First mass market experience

AESC is the name of a joint venture put together by Nissan and NEC to manufacture the battery pack for the Leaf. The Leaf is the first mass-produced full EV in the world, and AESC is the first battery supplier to have brought Li-ion EV batteries into serial production. They have the capacity to produce 90,000 high energy, low-cost, light and compact batteries per year with laminate packaging which ensures long life and reliability. They are also providing a different type of battery to the HEV Nissan FUGA, with a capacity of 10,000 battery packs a year.

Shouichi Matsumoto, President of AESC, said "AESC global expansion is expected to result in a global production capacity of 500,000 batteries/year by 2015."

Which battery for HEV/PHEV/full EV? 

"If fuel saving benefit is not more than 15-20%, then the consumer is not willing to pay for an HEV" said Menahem Anderman, President of AAB. Regarding battery type, Mr. Anderman added "the trend is NMC prismatic metal cell configuration for EV/PHEV". According to him, almost all EVs will be powered with Li-ion batteries by 2015. The same is to expected for HEVs by 2015, as Toyota has made the commitment to use NiMH until then, representing more than 70% of the current HEV market.

Regarding Li-ion HEV battery suppliers, AAB expects Sanyo to be the market leader with a turnover of $185 (€128) millions, followed by Hitachi with $120 (€83) million and A123 Systems with $95 (65.7) million. The overall Li-ion HEV battery market is expected to weigh around $750 (€519) million by 2015.

Roland Berger foresees the combined EV/PHEV/HEV technologies will capture around 10% of global car sales. The different electric vehicle technologies will not be sharing these 10% equally, and which EV technology is most successful will depend on the country. For example, it seems that serial PHEVs are likely to be most strongly represented in Western Europe, while HEV will likely dominate in North America and Japan.

Roland Berger expects full EVs and PHEVs to use energy cells (with a focus on energy per kg instead of performance per kg). Only 10-25% of the battery demand in 2020 will be for power cells (between €3.7 billion and €4.8 billion).

Battery maker business model

According to the Nomura Research Institute (NRI), the common business model for battery suppliers so far has been the development of joint ventures with powerful automakers. Today however, the market has changed towards cost competition by multi-suppliers. However, the multi-supply model could prove problematic if the EV market does not live up to expectations because the offer of low cell prices builds on the assumption of mass production.

Advanced Automotive Batteries (AAB) expects Chinese automakers to take the lead in full EV production by 2013, and then to exponentially grow to reach about 90,000 units a year by 2015. By 2020, the NRI expects the global HEV/PHEV/EV market to reach 13 million units/year (16% of the car market).

All speakers agreed that government transport plans will greatly influence EV penetration in the global car market during the next decade, through national or global regulations such as CAFE and through financial and non-financial incentives for bringing EVs faster to market.