Weak supply chain threatens EV battery deliveries

  • 16-Sep-2010 07:52 EDT

Chemicals and materials suppliers in the EV batteries market can expect exponential growth, as full or partial EVs come to market in the near future. The Chevrolet Volt (shown) hits U.S. streets later this year.

The rapidly developing and evolving market for EVs is boosting demand for new battery technologies, but after decades of slow development this boom is causing potential issues with supply. New analysis from Frost & Sullivan, Global Opportunity Analysis for Chemical and Material Suppliers in the Electric Vehicle Batteries Market, finds that the EV Li-ion battery chemical and materials market is expected to grow 125% per year from 2010 to 2016. This market includes separators, anodes, cathodes, and electrolytes, as well as binders and casings. However, only a few market participants can supply these parts, particularly in Europe, potentially causing a bottleneck in the entire EV batteries market. Chemical and battery companies have failed to keep pace with development as electric vehicles have been promised for many years. Until recently the market has failed to materialize, causing chemical companies to develop a "wait and see" attitude toward development. Now that the market has finally taken off, very few companies are in a position to capitalize on the opportunities. "The market will face significant price pressure from downstream companies," says Frost & Sullivan's Global Program Manager for Transportation Chemicals Robert Outram. "Additionally, increasing competition from low-cost production locations will intensify the profit margin reduction for chemical suppliers." With the EV batteries market showing signs of genuine potential in this decade, chemical companies are beginning to rise to the challenge, partnering with the key battery producers to supply the required volumes and enhance existing battery technology.

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