Demand for lithium-ion batteries by the electric vehicles market will increase dramatically in the next seven years, moving from market earned revenues of $381.9 million to an estimated $7.60 billion in 2020, according to an analysis by Frost & Sullivan.
The analysis echoes findings by Pike Research last year that also indicated a large increase in the global li-ion battery market by 2020.
Revenues are expected to grow as confidence increases in electric power trains, new legally binding fuel standards and advances in li-ion battery technology encourages manufacturers to produce more vehicles that use electrification as part of their power train, according to Camilo Castaneda, a Frost & Sullivan analyst.
Castaneda advises that companies looking to increase their market share should look to joint ventures and acquisitions that will speed up the development of li-ion chemistries and provide a broader range of materials that combine high performance with low costs.
The analysis notes that the high cost of li-ion batteries is the biggest challenge to the global EV market. However, once li-ion battery chemicals and materials are offered at affordable rates and production of li-ion batteries is increased, less expensive EVs can be developed. The concern about cost was also expressed in a 2012 report by Lux Research.
However, li-ion chemicals and materials makers do have work to do in changing public perception of EVs. While many consumers have a positive view of EVs, such as their environmental friendliness and innovativeness, many regard EVs as inconvenient, focusing instead on poor battery life, driving range and dependence on the charging infrastructure.
Currently three companies lead the market for li-ion batteries for EVs, according to Navigant Research report published last year. They include LG Chem, Johnson Controls and AESC.
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