April 30, 2007

Hybrid vehicle battery market could top conventional market, study says

Oregon House, California – Global sales of hybrid batteries, estimated at $600 million in 2006 (all prices U.S.), is expected to grow to $1.4 billion in 2010 and $2.3 billion in 2015, according to a report by consulting firm Advanced Automotive Batteries. The conventional lead-acid OEM auto-starting battery business is currently about $2 billion.

The report says that hybrid vehicles themselves, with global sales estimated at 384,000 vehicles in 2006, will reach 1.1 million units in 2010 and 2 million units by 2015. The report projects that full hybrids will continue to be the dominant hybrid architecture, with milder hybrids holding only limited market share, and plug-in hybrids unlikely to reach trule unmandated commercial volumes inside the next ten years. For hybrid vehicles, Toyota, with a 2006 market share of 78 per cent, will remain the leader with a projected share of 60 per cent in 2015; next will be Honda, Ford and General Motors, with a project combined market share of 25 per cent in 2015, and other automakers accounting for the remaining 15 per cent.

The report says that NiMH batteries will continue to be the dominant hybrid battery technology through 2010, but are likely to later concede market share to Li-ion batteries. However, the report says that introduction of this superior technology still poses significant financial risks associated with unproven reliability and longevity, and with potential safety issues.

Two Japanese battery producers, Panasonic EV Energy and Sanyo, share more than 85 per cent of the current NiHM battery market. Both companies are also developing Li-ion battery solutions; more than a dozen additional battery makers from Japan, Korea and the U.S. are also intending to compete in the Li-ion market.

The report says that the hybrid vehicle market will grow even faster than projected if the cost of petroleum-based fuels increases significantly or if taxation incentives encourage the production of fuel-efficient cars, but may grow more slowly than projected in the face of such factors as stabilization of oil prices, significant adoption of diesel-powered vehicles in the U.S., or the failure of hybrid batteries to provide at least eight years of life in most applications.

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