Projected 2015 battery demand and supply in major regions ( in units “EV equivalents”, high penetration scenario). Source: Roland Berger.
The share of electrified powertrains will increase significantly in all major automotive markets, a development driven by dramatic battery cost decreases over the next 10 years. However, according to a new report from Roland Berger Strategy Consultants, planned investments in lithium-ion manufacturing will result in significant overcapacity between 2014 and 2017 relative to the demand generated by that growth, especially in the US and in Japan.
As a consequence, Roland Berger forecasts, only six to eight global battery manufacturers will survive the next five to seven years. These are the findings of a new market survey conducted by Roland Berger Strategy Consultants titled “Powertrain 2020: Li-ion batteries – The next bubble ahead?”
In an aggressive scenario, plug-in hybrid electric vehicles (PHEV) and electric vehicles (EV) in the key regions still will account for no more than 1.2 million vehicles by 2015. Li-ion battery demand for hybrids, plug-in hybrids, and electric vehicles will account for 0.82 million “EV equivalents” of battery capacity, while installed capacities in 2015 will be more than 2.6 million EV equivalents. The demand for Li-ion batteries will continue to rise until 2020, but 3 million EV equivalents won’t be reached until 2018 at the earliest, according to the report.
Planned investments will this result in significant overcapacity between 2014 and 2017, especially in the US and in Japan. Given the announced investments, capacity in 2015 will already reach 200% of the demand projected for 2016. In addition, not all investments have been announced; as-yet unknown investments by key players will lead to further overcapacity, and national subsidies will stimulate even more investments.
In addition, high levels of R&D and CAPEX will be required to drive down costs fast: €50-100 million for new cell chemistry, €350 million for a 100,000 unit plant.
Western governments therefore need to act now in order to avoid losing future technologies to Asia; at the same time, battery suppliers need a well-defined strategy to gain market share fast in order to survive, the consultancy cautions. And last but not least, investors should be aware of massive investment risks. Wolfgang Bernhart, Partner with Roland Berger Strategy Consultants, notes “Unfavorable factors are piling up. But managed correctly, electrified powertrains will still be a profitable market in the future.”
The conclusions and recommendations in the document were based on market knowledge of Roland Berger Strategy Consultants or drawn from information and data gathered through desk research and interviews.
http://www.greencarcongress.com/2010/02/berger-20100223.html
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