Overproduction and falling prices of lithium-ion batteries, have led to significant consolidation in the global market. Smaller parties are repressed, and the market will be largely dominated by five major players. These are the main findings of an international study conducted by Roland Berger Strategy Consultants.
The strategy consulting firm has been doing research into the market for lithium-ion batteries in cars, trucks and buses with hybrid and electric drive systems for the past years. In 2010, Roland Berger also concluded that a consolidation would take place in the battery industry. In the previous study, released in September 2011, it became apparent that the market for lithium-ion batteries will grow explosively in coming years.
The market for lithium-ion batteries for electric vehicles is very dynamic. Roland Berger expects that cars and light commercial vehicles will cover over 85% of the total market for lithium-ion battery in 2015 and predicts that more than 4 million vehicles with electric, hybrid or plug-in hybrid drive systems (xev's) will roll off the production line each year. There are more than one hundred companies worldwide that want to capitalize on it. Production in 2015 will, however, be twice as large as the demand for these batteries, with a lot of pressure on prices as a result.
For 2015 Roland Berger anticipates that car manufacturers have to deal with prices between 180-200 EUR/kWh for high-energy batteries as the demand drops. This represents a decrease of about 5 to 10% of the current margins. Especially the small players, with a market share of only 2% will have a hard time in 2015. The competition will increase in the coming years as almost 70% of the market in 2015 will be dominated by the five major players: AESC, LG Chem, Panasonic / Sanyo, A123 and SB LiMotive.
Chinese manufacturers are gaining ground
In addition to the Western market leaders competition from China is on the rise. Chinese manufacturers will control about 8% of the world market in 2015. René Seyger, partner in the Dutch office of Roland Berger explains: “the Chinese e-mobility market could well be the biggest in 2020. For international battery manufacturers, this trend is both an opportunity and a challenge. Battery manufacturers will have to position themselves in the Chinese market accordingly if they want to remain successful in the long run”.