Smart Grid Markets: Emerging Technologies Power a $44 Billion Opportunity for Transportation and the Grid

By Jacob E. Grose

With virtually every major automaker planning an electric vehicle launch, and governments worldwide pouring billions of dollars into Smart Grid technologies, questions abound as to how big the opportunities for transportation and grid technologies really are. Standouts include an e-bike/scooter battery market that will near $11 billion in five years, and a Smart Grid market that will near $16 billion over the same timeframe.
 
Startups like Tesla Motors, Better Place, Bloom Energy, and Silver Spring Networks have all raised hundreds of millions of dollars from VCs and governmental groups that believe the markets for these technologies are ripe to explode over the next five years.  In its report, titled “Emerging Technologies Power a $44 Billion Opportunity for Transportation and Grid,” Lux Research analyzes the prospects for several technologies, including batteries, supercapacitors, fuel cells in transportation and storage, distributed generation, and transmission and distribution technologies on the power grid.  The report states that over the next five years, the overall market for these technologies will grow from $21.4 billion to $44.4 billion.
 
In transportation, electric vehicle storage technology markets will nearly double from $7.7 billion in 2010 to $14.5 billion in 2015.  Surprisingly, markets for electronic bike (e-bike) and scooter batteries will lead the charge, growing from $6.4 billion this year to $10.9 billion in 2015.  Lead-acid batteries currently dominate transportation markets.  They will drive 93% of China’s e-bikes in 2010, and dominate the micro-hybrid automotive market. However, Li-ion technology is rapidly growing, and has gained further momentum from plug-in and electric vehicles. The upshot: With a compound annual growth rate (CAGR) of 22% through 2015, Li-ion battery markets are growing almost three times faster than those for lead-acid.
 
From the power grid sector, the markets for emerging technologies will skyrocket from $13.7 billion in 2010 to $30 billion in 2015 with the largest market being smart-grid.  Already formidable in 2010, with revenues of over $5.4 billion, mostly due to aggressive adoption in the U.S, the aggregate smart-grid market will grow over the next 5 years to reach $15.8 billion.