The total annual demand for battery packs for the growing electric vehicle (EV) segment will grow from US$26.6 billion in 2019 to US$137.1billion by 2025, according to analysts from Yole. This demand will be driven mainly driven by full electric vehicles, specifically battery EVs (BEVs), which will represent 75.9 percent of the total demand in GWh by 2025. Plug-in hybrid EVs (PHEVs) enable big CO2 emission reductions due to their electric engines, while keeping long driving ranges thanks to their ICEs3—taking second place in Yole’s ranking of total demand measured in GWh by 2025. Yole has releases a technology and market analysis focused on the Li-ion batteries industry: Li-ion battery packs for automotive and stationary storage applications.
“The EV sector is booming mainly due to the need to significantly reduce average vehicle fleet CO2 emissions to match governments’ strict CO2 emission reduction targets and thus avoid heavy penalties,” commented Milan Rosina, PhD, Principal Analyst, Power Electronics and Batteries, at Yole Développement (Yole), within the Power & Wireless division.
Stationary battery energy business is not the first priority of most battery manufacturers that are focusing today mainly on electric mobility. But the market growth for stationary battery systems is growing and is mainly driven by renewable energy sources, mainly photovoltaics and wind, and electricity grid regulation. EV/ PHEV charging stations have emerged as a new interesting market driver for stationary battery energy storage solutions to “smooth” strong electricity demand peaks while charging many EV/PHEVs at the same time.
Yole’s market forecast has been made during the outbreak of coronavirus disease 2019 (COVID-19). According to the analysts, the impact of this virus on automotive and battery industry is significant. It is hard to evaluate how long this crisis will last and how its duration will negatively impact the manufactured volumes of conventional vehicles and EV/PHEV. The numbers presented in this report for 2020 might be thus reduced in the case of prolonged crisis due to coronavirus.
“There is no big technology breakthrough expected in coming years regarding battery cells and other battery pack components. The main trends will involve existing technology solutions, which will be further improved and more widely deployed. Technology and cost improvement will be steady,” said Shalu Agarwal, PhD, Power Electronics and Materials Analyst at Yole, within the Power & Wireless division.
Battery pack suppliers face significant challenges from newcomers attracted by the fast-growing market, dominant position of some cell suppliers, and strong price pressure on all battery application segments. Most battery pack suppliers are battery integrators, especially carmakers. They purchase battery cells mainly from leading suppliers like CATL, LG Chem, Panasonic and Samsung SDI, and build their battery pack using other components, including BMSs, heating/cooling systems, electrical interconnections, safety components, and housings. Carmakers are intruding ever more into battery cell design and in some cases also into cell manufacturing, as in the cases of Tesla and Daimler. Instead of purchasing cells, some battery integrators purchase battery modules directly and they just integrate modules into battery packs.
Indeed, the modular battery pack approach enables further manufacturing cost reductions and keeps the design flexibility for battery packs. Some carmakers have developed specific internal know-how and established tight supply chain partnerships. They might remain at least partially stuck with their historical technology and integration choices, while their competitors will move rapidly towards latest technologies and full vehicle electrification.
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