MOUNTAIN VIEW, Calif., Sept. 4, 2014 /PRNewswire/ -- The global lithium-ion battery market is expected to witness exuberant growth in forthcoming years. Developing applications in the grid and renewable energy storage segment are helping boost demand for lithium-ion batteries. Vendors should include the grid and renewable energy storage segment in their growth strategy as the stationary energy storage market is likely to be the leading consumer of lithium-ion batteries and utility companies seek smart grid solutions that use these batteries.
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New analysis from Frost & Sullivan, Analysis of the Global Lithium-ion Battery Market: Growth Opportunities and Market Outlook, finds that the market earned revenues of $17.58 billion in 2013 and estimates this to more than quadruple by 2020.
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"Overall demand for lithium-ion batteries will continue to increase throughout the forecast period due to anticipated high growth in the automotive and grid and renewable energy storage segments," said Frost & Sullivan Research Manager Vishal Sapru. "North America and Asia-Pacific will lead demand, followed by Europe, wherein countries look for alternative energy sources to sustain automotive and energy sectors."
The automotive sector is among the end-user segments that will present strong opportunities for vendors, as pure electric vehicles are expected to witness longer mass adoption cycles and the push to marketing hybrid vehicles will continue. Along with these factors, the trend towards incorporating lithium-ion batteries for start-stop automotive applications will draw vendors to this space.
In both the automotive and grid and renewable energy storage sectors, regulatory incentives affect lithium-ion battery uptake. In the automotive sector, regulations encouraging fuel efficiency, emission standards and use of alternative and green energy sources stimulate need for lithium-ion batteries. Similarly, in grid and renewable energy storage, changing utility regulations, especially in the United States, Europe and Asia-Pacific, encourage battery-based energy storage and distribution projects.
Within the industrial segment, increasing utilization of battery backup for applications in healthcare, military, telecommunications and other areas is fueling adoption of lithium-ion batteries. Coupled with the growing need for lithium-ion batteries in the power tools and equipment market, this is boosting the attractiveness of the industrial segment.
However, the global lithium-ion battery market has its share of challenges. For one, the competitive structure of the market remains fragmented. As few small participants are expected to survive the resulting decline in prices and rise in R&D costs, market consolidation and a shake-out is imminent.
Further, due to recent recalls of many lithium-ion battery operated devices for risk of battery malfunction, product safety concerns have surfaced, effectively hampering market development. As a consequence of this and the continued reliance on traditional energy sources, migration to lithium-ion batteries has slowed down.
"Manufacturers are searching for materials that enable lithium-ion batteries to operate optimally and safely in extreme temperatures," noted Sapru. "Additionally, manufacturers are looking to reduce the cost of cells, battery-pack materials, and battery management systems. While these efforts will ensure a fall in prices of lithium-ion batteries, the decline rate over the next two years will be in the low single-digits."
Analysis of the Global Lithium-ion Battery Market: Growth Opportunities and Market Outlook is part of the Power Supplies & Batteries (http://www.powersupplies.frost.com) Growth Partnership Service program. Frost & Sullivan's related studies include: Analysis of the North American Generator Set Market, Global Military Battery Market, and Global Industrial Batteries Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Analysis of the Global Lithium-ion Battery Market: Growth Opportunities and Market Outlook
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