Hybrid Electric Vehicle Battery Market Charged for Rapid Growth

    OREGON HOUSE, Calif., Sept. 10 The market for advanced
Hybrid Electric Vehicle (HEV) batteries will grow from approximately
$70 million this year to over $250 million by 2005 and is expected to top
$500 million by 2009, according to a new study, "The 2001 Advanced Automotive
Battery Industry Report," to be published in November 2001.

    Hybrid electric vehicles (HEVs) are vehicles that combine an internal
combustion engine with a small electric motor and a battery. They are now
finding commercial acceptance as an effective measure in combating global
warming and pollution and reducing the dependence on fossil fuels without
sacrificing vehicle performance, and are likely to receive U.S. federal tax
credits. A key to the widespread commercialization of HEVs is the availability
of an affordable, long-life battery.

    The study analyzes the battery requirements set by all major automakers
for HEVs. Nickel Metal Hydride (NiMH) is the incumbent technology for these
applications due to its longevity under heavy usage. However, at the OEM cost
of $500 to $2,000 per HEV battery pack, and with a life expectancy of 5 to
8 years, NiMH batteries are barely affordable to the automakers. Lead Acid
batteries are considerably more affordable but last less than 2 years under
typical HEV duty. The study discusses the likelihood of other advanced
batteries, including Lithium Ion batteries, popular in laptop computers and
cell phones, to provide sufficient value to compete for this market in the
future.

    The study also discusses the plans of the major automakers and their
battery suppliers for the commercialization of HEVs and HEV batteries. Toyota,
Honda, Ford, and PSA (Peugeot) are leading the commercialization of HEVs, but
most other major automakers expect to offer Hybrid Electric Vehicles in
commercial volume by 2006. Three Japanese battery producers, Panasonic EV
Energy (NiMH), Sanyo (NiMH), and Japan Storage Battery (Lead Acid), as well as
the French battery producer Saft (NiMH), have been awarded production
contracts for HEV batteries from the major automakers mentioned above. Market
leader Panasonic EV Energy, a joint venture between Panasonic Batteries and
Toyota, will continue to enjoy over 50% market share for several years while
other developers are establishing production capability.

    The 2001 Advanced Automotive Battery Industry Report also points out that
Japanese automotive giants Aisin and Denso, and German suppliers Siemens AG
and Continental ISAD will provide power generation and management systems for
the early HEVs, while Delphi, Valeo and Visteon, as well as other major
automotive system suppliers, already have prototypes at an advanced stage of
development.

    To produce this study, Advanced Automotive Batteries, a consulting firm
that carries out technology and market assessments and organizes an annual
industry conference, conducted over 40 site interviews with key players in the
industry, including all major automakers, automotive system suppliers, and
battery producers.