Lithium-ion, currently the most expensive rechargeable battery technology, will be the cheapest in 2020, according to IHS iSuppli.
“Lithium-ion at present is much more expensive than alternative technologies, costing two to three times as much as sodium-sulfur, lead-acid and nickel-metal-hydride rechargeable batteries,” says IHS analyst Satoru Oyama, “however, lithium-ion pricing will decline much more rapidly than the other technologies, coming close to cost parity in 2015, and then becoming the least expensive type of rechargeable battery in 2020. Combined with the inherent advantages of the technology, the increasingly competitive cost of lithium-ion will cause car makers to employ it as their battery technology of choice in future electric and hybrid vehicles.”
Consequently HIS sees a 350% growth in the market for lithium-ion between 2010 and 2020 – growing from a market worth $11.8bn in 2010 to one worth $31.4bn in 2015 and to $53.7bn in 2020.
In 2015 it will become the dominant rechargeable battery technology type by market value.
Lithium-ion delivers several enhancements compared to other rechargeable battery technologies.
These advantages include more flexible form factors and lighter weight. Furthermore, lithium-ion devices have no memory effect, meaning they maintain their full capacity even after a partial recharge. Finally, lithium-ion batteries are considered to be more environmentally safe than other technologies.
These features make lithium-ion particularly attractive for electric vehicles, hybrid electric vehicles and plug-in hybrid electric vehicles.
Because of this, the automotive segment will be the leading market for lithium-ion batteries by 2015, surpassing the current top application, notebook PCs.
The dominant battery technology used in hybrid cars now is nickel-metal-hydride. More than 1 million hybrids with nickel-metal-hydride batteries were shipped in 2010, led by the Toyota Prius.
However, shipments of nickel-metal-hydride batteries to the hybrid market will not grow in the future as the use of lithium-ion begins to take off.
One concern regarding the use of first-generation lithium-ion batteries in cars is safety. There can be a risk of fire using existing lithium-ion battery materials due to the high temperatures involved. There have been documented incidents of lithium-ion battery fires in smaller devices, such as PCs and mobile phones.
To achieve acceptable safety levels for hybrid and electric vehicle batteries, lithium-ion battery makers must take steps to prevent internal short circuits which can cause external damage. These steps include improving control of power generation during discharges and enhancing the management of rapid charging.
While automotive will be the dominant market for lithium-ion batteries, notebook PCs and cellphones will remain major markets for the technology, accounting for $12.3bn in revenue in 2010, up from $7.8bn in 2010.
Other major uses for lithium-ion batteries include use in solar power systems, smart electricity grids and electric tools