According to a recent study from ABI Research, the global market for electric and hybrid-electric vehicle batteries will grow from about $5 billion in 2010 to $47 billion in 2020, representing an annual growth rate of 25% over 10 years.
‘Announcements from all the major manufacturers make it clear that this segment will have much more competition in the next couple of years,’ says ABI Research principal analyst David Alexander. ‘Also, some existing hybrid vehicles will be fitted with larger batteries to improve their electric-only range.’
A number of large lithium-ion battery production facilities started operations recently to support the anticipated demand, the company notes. That demand is being nudged higher by government incentives, which help offset the higher costs for electric vehicles.
‘Range anxiety is diminishing and consumer acceptance is growing, but the major obstacle for potential purchasers of an EV remains the high price,’ says Dominique Bonte, group director of ABI Research. ‘And while the costs of power electronics and electric motors are expected to drop significantly as production ramps up, no big price cuts are expected for the most expensive component – the battery pack.’
Alternative technologies such as hydraulic hybrid drive, ultracapacitors and flywheel energy storage are in development and testing for niche applications, but ABI Research's study suggests that ‘the battery-electric solution’ will garner the most activity and investment capital during the forecast period.