The heavy push widespread adoption of electric vehicles has created a gold-rush of sorts. For a variety of potential benefits that range from reducing greenhouse gas emissions to reducing dependency on foreign oil, governments worldwide have put up billions of dollars for the development of battery-powered vehicles. With battery technology becoming just as, if not more vital to this movement than anything else, existing manufacturers and a whole host of hopeful entrepreneurs have set out reap the rewards. Currently, there are approximately 60 EV lithium-ion battery makers worldwide. As with all bubbles, however, this too will eventually burst in some shape or form. What might the burst of the ‘Batteries for Electric Vehicles’ bubble look like?
According to a report from the German consulting firm Roland Berger, only six or seven of those 60 lithium-ion battery makers will survive the decade. “Manufacturers of lithium-ion (Li-ion) batteries currently enjoy a great amount of hype, but massive consolidation is expected to come in the next 5 to 7 years,” says Wolfgang Bernhart, Partner with Roland Berger. “Therefore, only six to eight global battery manufacturers will survive in the next five to seven years,” states Bernhart.
While some say the damage caused by this could easily be as bad as the 2001 tech bubble, the manufacturers that make it through this consolidation period will be in a good position for success. “Unfavorable factors are piling up,” Bernhart continued, “but managed correctly, electrified powertrains will still be a profitable market in the future.”
For these and other key points of information from the Roland Berger report, click here-
-The share of electrified powertrains will increase in all major automotive markets
-Battery costs will decrease significantly in the next 10 years
-Significant overcapacity expected between 2014 and 2017, especially in the US and in Japan
-Only six to eight global battery manufacturers out of approximately 60 will survive the next five to seven years