Lithium Ion batteries are the clear winner as they are being used in the vast majority of Electric vehicles. The future may bring a shift to lithium-air batteries or something else, but for the foreseeable future, lithium-ion batteries are on top.
While the market for Li-ion batteries for vehicle electrification is just beginning to develop, several companies have emerged as leaders. The most successful Li-ion battery manufacturers to date are large and financially stable companies or subsidiaries of these types of companies. Additionally, the leaders provide Li-ion batteries to multiple markets, such as the consumer electronics and emerging stationary grid energy storage markets.
Navigant Research Leaderboard Report examines the vendor landscape for Li-ion battery manufacturers that are currently selling products to automotive OEMs for use in light duty passenger vehicles.
Navigant Research profiled companies in the Li-ion EV market. The criteria by which companies are compared in this Leaderboard Report include:
» Vision » Go-to-Market Strategy
» Partners » Production Strategy
» Technology » Geographic Reach
» Sales, Marketing, and Distribution » Product Performance
» Product Quality and Reliability » Product Portfolio
» Pricing » Staying Power
( Detailed descriptions of each criterion are provided in the “Criteria Definitions” section of at the end of article)
The companies rated on the above criteria were evaluated based on numerical scores to determine which competitors are Leaders, Contenders, Challengers, or Followers. As the global Li-ion market has grown, leading companies have developed and executed strategies to further their business goals.
- As of now, Navigant Research only identifies three “Leaders” out of the 11 lithium-ion vendors it just evaluated. They are LG Chem, Johnson Controls, and AESC.
- South Korea-based LG Chem surprised many in the automotive field by winning the Chevrolet Volt contract in 2008, and has since followed through with several other major automotive contracts.
- Deciding not to invest in building factories to serve a market that has not fully appeared yet, Johnson Controls has focused its strategy on developing the second generation of batteries. Its NMC battery chemistry, which will be officially launched late in 2013 or early in 2014, is highly regarded by many potential buyers and could win some of the world’s biggest automotive contracts.
- AESC, the joint venture between Nissan Motor Company and NEC, is the only manufacturer of Li-ion cells that is directly owned by an automotive manufacturer, and the company has produced significant volumes of batteries, primarily for the Nissan Leaf.
Lets have a look at Installed Lithium Ion battery manufacturing Capacity , Q1 2017.
- 2016 and H1 2017 have seen an increase in Passenger EV sales, leading to quarterly demand of more than 6 Gwh.
- In 2016, new EV sales consumed over 20GWh while installed capacity was 5 times than this.
- Panasonic has dominated sales due to its relationship with Tesla Motors.
- BYD has grown its market share significantly while AESC supplying to Nissan Leaf – shrinks.
Conclusion : Lithium Ion battery sales for Passenger EVs are picking up, but installed capacity is still much larger.
LITHIUM ION BATTERY COSTS AND FORECAST
One of the hardest and most critical factors to project when it comes to electric vehicles is the price of batteries, which make up a huge portion of an EV’s price. However, the trend is pretty obvious.
As this graph below shows, EV battery prices in 2012 have fallen 40% since 2010. Regarding the future, BMW board member Ian Robertson says, “in the next three to four years there will be more progress in battery development than in the previous 100 years.” Here’s a Bloomberg New Energy Finance graph on recent and projected trends:
2010 – 2012 :
2010 – 2016
- Price of Lithium Ion battery in 2016 was $273 / kWh – a drop of 73% since 2010. This is actually a good indicator for EV industry.
- Price drop is due to technology development , economies of scale and fierce competition between major manufactures.
2016 – 2030 :
- Lithium Ion Battery pack prices will fall to as little as $73/ KWh.
- Intense price competition is leading manufacturers to develop new chemistries and improved processes to reduce production cost of batteries.
- Production cost have also come down significantly. Producing a battery on Korean manufacturing plant in 2017 costs $162 / KWh , dropping to $74 / KWh in 2030.
Forecast demand for Lithium Ion Batteries from EVs, 2010-2030 ( GWh )
- Annual demand for lithium Ion batteries from new EV sales of 408 GWh in 2025 to 1,293 GWh in 2030.
» Vision: Measures the company’s stated goals in designing market solutions against the
actual needs of customers based on the entire environment in which they will operate.
Clear and compelling visions that are effectively communicated to the industry result in
» Go-to-Market Strategy: Evaluates the company’s strategy for reaching the target market,
including the sales and marketing channels to be used, as well as the processes
established for informing the target market about brand differentiation and unique
» Partners: Measures the company’s established partnerships with key organizations that
will provide an advantage in financial backing, sales, business, and product development.
Affiliations with well-known battery and motor manufacturers and other established
vendors in the supply chain, as well as a track record of financial strength through
fundraising or profitable product sales, positively affect scores .
» Production Strategy: Evaluates the long-term competitiveness of the manufacturing plan as an effective solution that satisfies market requirements and meets market capacity needs. A component of this is an evaluation of the ability of the manufacturing base to supply product quality to meet market expectations and demand.
» Technology: Evaluates whether the company has developed and/or patented technology that provides a significant business advantage over competitors that is likely to have an enduring impact on its success. Higher scores are given if the company’s technology is already a proven market success or delivers unique product attributes.
» Geographic Reach: An evaluation of companies’ ability to reach national and international customers through networks of distributors and resellers. Scores are lower if the company does not have a sales or dealer strategy suitable for retail or fleet sales in multiple regions.
» Sales, Marketing, and Distribution: Evaluates the company’s marketing and sales
performance and current distribution channel. Higher scores are given to companies with a large global dealer network with access and support for current product.
» Product Performance: Evaluates the competitive performance of the vehicles. Higher
scores are given to companies that provide higher fuel economy and lower operating costs while delivering on customer expectations.
» Product Quality and Reliability: Evaluates the quality and reliability of the vehicles
delivered to customers, the company’s strategy to develop quality products for the market, and its track record on quality with the current product line.
» Product Portfolio: Addresses the products’ relative competitiveness in and suitability to
the market. Points are awarded for product performance (top speed, range, recharging
times, etc.), uniqueness, and vehicle design for the target market.
» Pricing: Determines the suitability of product pricing based on its feature set, including
whether products are available at multiple price points and how pricing compares to that of competitor products.
» Staying Power: Evaluates whether the company has the financial resources to withstand weak or variable markets and price-based assaults by competitors. Also measures the company’s likelihood to continue to pursue vehicle products in the event of market softening. Higher scores are given to companies with better financial performance and more capability to survive market downturns.
Bloomberg New Energy Finance