Monday, May 7, 2012

Lithium ion battery 'overcapacity' could arrive by 2015, would push prices way down

Lithium ion battery 'overcapacity' could arrive by 2015, would push prices way down:
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Too many lithium-ion batteries? That's not something battery makers want to hear, but it's music to our ears. It's also the prediction of Munich-based Roland Berger Strategy Consultants

Over the next few years, as battery makers like AESC, LG Chem and A123 Systems ramp up for what's expected to be a surge in electric-drive vehicle purchases, we could be awash in li-ion batteries. Global lithium-ion battery sales will total $9 billion by 2015 and will be marked by what the consultants say will be "massive overcapacity." While about four million hybrids, plug-in hybrids and battery-electric vehicles will be produced worldwide that year, battery supply will be about twice as high as demand, potentially driving battery costs down to less than 200 euros ($261 U.S. at current exchange rates) per kilowatt hour.

Either way, AESC, LG Chem, Panasonic/Sanyo, A123 Systems and SB LiMotive will control about 70 percent of the global market by 2015, when light-duty vehicles will account for more than 85 percent of the world's lithium-ion battery demand, according to RBSC.

Batteries are said to account for 25 percent or more of an electric-vehicle's total costs, making the subjects of lithium-ion battery capacity and costs particularly important to the overall EV market. Last month, Bloomberg New Energy Finance reported that lithium-ion battery-pack costs fell 14 percent during the past year and have declined 30 percent during the past three years because of technical advancements and higher production capacity. Specifically, EV battery costs dropped to $689 per kilowatt hour during the first quarter from $800 a year earlier, BNEF calculated.
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