Neil Oliver asks the question, who owns and controls the worldwide battery market and where is it heading?
The worldwide battery market is currently undergoing something of a renaissance thanks to the growing demand for long-life, high power batteries across consumer electronics, industrial, military and the hybrid electric vehicles sectors.
The worldwide battery market was valued at $54bn in 2013 according to market research firm Avicenne Energy. The market is currently growing at a compound annual growth rate (CAGR) of over 10%t and is expected to exceed $100bn by 2025.
According to Frost & Sullivan, the market can be broken down into two categories: primary (disposable) and secondary (rechargeable) batteries.
Primary batteries are used in everything from military equipment – where time to charge is a luxury – to pacemakers, wristwatches, remote controls and toys. Although the primary battery market accounts for 90%t of the volume of all batteries shipped, it only accounts for 37% of the market value, according to French research laboratory LRCS.
Here, secondary, rechargeable batteries, used in everything from portable consumer electronics, automotive, electric vehicles, starter batteries, industrial and medical devices account for 63% of the global market by value. Breaking down the secondary market further, by chemistry, we can see that lead-acid takes the lead for its widespread use in starter, lighting and ignition (SLI) batteries.
However, growth in the hybrid electric vehicle, medical technology (MedTech) and energy storage (ESS) markets, as well as global demand for high discharge devices, is seeing increasing investment in Lithium-ion (Li-ion) chemistry.
Although there are hundreds of battery manufacturers throughout the world, today's global battery market is dominated by a handful of multinational corporations operating and manufacturing from just four countries, South Korea, China, Japan and the United States. From South Korea, we have Samsung SDI and LG Chem; from Japan there is Panasonic, Sony, TDK, Hitachi, NEC, Toshiba, GS Yuasa and Mitsubishi Electric; from China BYD; and from the USA we have A123 and Ultralife Corporation.
Of this line up just three companies, Panasonic, Samsung SDI and LG Chem dominate the portable consumer electronics and growing hybrid electric vehicle (HEV) markets, with their hold on cylindrical, prismatic and laminated Li-ion technology.
Medical is critical
This oligopolistic structure raises concerns about the fast growing medical technology market. If a few multinationals control the design, development and manufacture of cells for batteries used in medical devices - many of them for use in critical applications - there is a risk that any strategic changes these companies make to cells could leave medical original equipment manufacturers (OEMs) high and dry.
While product development lifecycles in the consumer sector last between six months and a year, medical device lifecycles need to last ten years or more. Because the consumer sector typically makes up a larger proportion of the revenue stream for these large battery manufacturers, changes to the technology, size, energy density, and availability of the cells that make up the batteries can limit the options available to battery OEMs.
Many OEMs tell us they have struggled with this in the past, so at Accutronics we ensure that we mitigate future fluctuations in the supply of cells for medical batteries by engineering redundancies into our battery designs. This means that we can change the cells we use without affecting the shape, size and rated specifications of the batteries we supply. By doing this, we can offer a no-change guarantee to our customers that we will not modify the design of the battery for the lifetime of the product.
Whichever way you look at it, the battery market is set to undergo a sea change in the next decade. With early consideration of your battery in the design process, along with the right approach to sustainable procurement, design engineering and service, OEMs in the most affected sectors can stay ahead of the electrifying changes we expect to see.
Neil Oliver is technical marketing manager at battery specialist Accutronics.