LI-ION BATTERIES: THE NEXT BUBBLE?
The news media has been filled this week with reports of the imminent popping of the Li-Ion “bubble”. Powertrain 2020, a study of the Li-Ion battery industry released by Roland Berger Strategy Consultants, predicts significant Li-Ion battery manufacturing overcapacity in the period between 2014 and 2017 (200% of 2016 demand already in 2015), especially in the US and Japan. The study anticipates significant contraction in the industry with no more than six to eight survivors, each with minimum revenues of about $800 million.
Properly understood, Powertrain 2020 should be seen not as an obituary but as a call to action. Its dismal industry forecast is premised on low demand for EV’s and PHEV’s. Not surprisingly, the report attributes low demand to the high price of Li-Ion batteries. Powertrain 2000 predicts that advances in technology and manufacturing should be sufficient by 2018 to reduce the price of batteries to the point where demand will catch up with capacity.
We have to do better than that—and we can. Too much rides on the success of electric drive to leave its success to speculative advances in technology and economies of scale by 2018. As an industry we must find ways to reduce battery costs more quickly, by developing standards and best manufacturing practices, and by taking the burden of the costs that will inevitably remain off the shoulders of American consumers, whose product choices over the next few years will determine the success or failure of our industry.
NAATBatt will continue to do its part. I hope that you or the appropriate people in your organization have registered for our March 1 Webinar on “Reducing Waste in the Manufacture of Li-Ion Cells and Electrodes” with Dr. Mohit Uberoi of MEGTEC Systems and John Dispennette of KEMET Corporation (lines are still available; e-mail to register). The Webinar will discuss ways that manufacturers are working to reduce waste in the production process.
Our March 15 Webinar will examine the important issue of standards. Standardization of advanced batteries is a critical prerequisite for reducing the cost of electric vehicles. Bob Galyen of Magna, who currently chairs the SAE Battery Standards Committee, and Priya Tabaddor of Underwriters Laboratories will discuss the standardization process in the US, assess its progress and prospects in the battery area, and inform participants how they can help move the process forward. I hope you will join us on March 15 for this important program.