Lithium ion batteries forecast: cheaper batteries and more of them on the way

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By: SGN Staff

Much has been written about the lithium ion battery market lately, and a lot of it hasn't been good. Their prices are too high to fuel a widespread adoption of EVs and other applications, and the rare earths needed to make them are in short supply. But IDC Energy Insights has some interesting things to say about where the Li-ion market is going over the next few years and, against the current pessimistic backdrop, it's good news.

 

IDC says Li-ion batteries have become the technology of choice for energy storage and are much preferred as the power source for EVs and other applications. While the market research and consulting company concedes that price has held them back, it's going to get better.

 

Here's why:

·         Li-ion batteries will get cheaper as the result of a major global manufacturing buildout, despite an expected hefty increase in demand over the next five years

·         Demand and supply will be roughly balanced for at least the next three years, which will allow manufacturers to rev up production capacity, which will help cut prices

·         As prices come down, more applications will be using them, causing a "self-feeding cycle" leading to lower prices and more widespread adoption.

 

"The lithium ion manufacturing buildout will reach a rough equilibrium with demand from car manufacturers, consumer electronics buyers and electricity grid operators over the course of the next few years," said Sam Jaffe, research manager for IDC. "This will lead to a dramatic reduction in price for Li-ion cells to as low as $400/kWh by 2015."

 

The increase in manufacturing capacity will jump substantially thanks largely to "massive private and public investment in the sector.

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Get the IDC lithium-ion battery report