The added value in batteries spreads from battery cells to battery pack components
Battery pack components are gaining importance in the fast-growing battery pack market, reaching $65.7B by 2021
The battery pack is the key element of battery storage systems. Such systems are used for clean mobility in hybrid electric vehicles and battery electric vehicles, and are crucial for the further deployment of intermittent renewable energy sources like wind and photovoltaics. Also, battery storage solutions are increasingly used in buildings and for electrical grid stabilization.
Demand for battery packs in these applications is growing rapidly, and the market value for pack components will reach $65.7B by 2021 - with a 2015 - 2021 CAGR of 47.4%.
The majority of battery pack demand will come from the automotive industry. As shown in this report, in 2015 the demand in MWh for plug-in hybrid electric and battery electric vehicles was about 18x higher than for stationary applications. This ratio will remain almost unchanged by 2021 because both the automotive and stationary markets will feature strong growth. Stationary applications also present opportunities for companies with relatively small production capacities that are not compatible with automotive industry volumes but offer a higher differentiation/added value.
Today, the development of innovative battery technologies is focused mainly on battery cells as a key component of the battery pack. In fact, cells represent more than 50% of the battery pack cost. As shown in this report, strongly decreasing cell costs will shift R&D efforts to other battery cost elements like the battery management system (BMS), thermal management (cooling, heating, thermally conductive materials), and protection solutions.
Many players with the know-how and/or manufacturing capacities for such technology solutions have already identified this business opportunity and are diversifying their activities into the battery pack business.
This report provides the 2015 - 2021 market potential for each main battery pack component.
Moving towards a reshaping of the battery pack supply chain
Battery cell supply is already well-consolidated, with Panasonic, LG Chem, Samsung SDI, and SONY covering more than 70% of the demand. But contrary to cell supply, the battery pack components supply chain is still largely dispersed.
According to Yole Développement’s estimates, more than 400 companies worldwide offer battery pack integration services. And despite numerous battery pack applications and different cost/performance requirements, there isn’t room for every player. Therefore, strong consolidation is expected in the main markets, and companies will reinforce their position by establishing partnerships and via vertical/horizontal integration within the battery pack supply chain.
Daimler, BYD, Tesla, BMW, Nissan and some other EV/HEV makers, as well as some Tier1 automotive companies, have already entered the stationary battery market and/or the battery pack manufacturing business.
Photovoltaic panel suppliers, residential PV installers (Solarcity), utility companies (E.ON, EDF), battery makers, photovoltaic inverter manufacturers, and many other companies are focused on the residential battery business. Energy providers like Total and Engie have recently announced significant investment in companies offering utility-size battery energy storage solutions.
The availability of second-life batteries at potentially much lower cost attracts companies involved in the energy business (Vatenfall, Duke Energy, Engie). And recycling companies, directly impacted by second-life batteries and having most of the necessary know-how and equipment already available, are evaluating this market too.
Seeking high energy density, safety, and lower cost
A battery pack is a complex system which often represents a significant part of the system cost. Innovative designs and technology solutions are needed to reduce cost, reach high energy and power densities, and keep the battery operating at optimum performance within safe temperature, voltage, and current ranges.
Cooling systems, thermal packaging materials, over-current protection solutions, fuses, interconnect solutions, busbars, application-specific battery management systems (BMS), and other products are being developed by numerous companies that have detected early market opportunities here.
The battery pack market is driven by the demand for EV/HEV applications, and so too is the development of technology solutions for battery packs. However, stationary energy applications often require specific technology solutions such as air-conditioning for battery cooling, and cooling-free small battery packs. With stationary battery demand growing, such solutions are gaining interest.
Product differentiation via pack design and components is commonly sought in the EV/HEV and stationary markets. Specific technology solutions are being researched to grant automotive batteries a “second life”. The end-of-life treatment of automotive batteries is governed by environmental issues and undesired costs for car manufacturers. Employing used automotive batteries in stationary battery storage systems for another 10 years-plus is an appealing thought, but it comes with many challenges.
Objectives of the Report
This report’s objectives are to:
- Demonstrate the strong, consistently-growing potential for power electronics players in the energy storage business, based on Li-ion battery technologies
- Discuss market opportunities for players that can supply materials, devices, or technology solutions to the lithium-ion battery pack industry
- Provide insight into different technologies currently used, technology trends, and newest innovations for battery pack elements
- Cover a large variety of different products and technology solutions used in battery packs – products/solutions which provide strong differentiation/added-value and allow for application-specific solutions to be adapted
- Offer deep insight into end-of-life battery issues, i.e. recycling and second-life battery applications
- Provide an overview of key players for battery cells, battery packs, and battery pack components