Johnson Controls Sees Slow Electric Vehicle Growth

...most optimistic view; electric vehicles and hybrids would make up 12 to 15 percent of the auto market by 2020.

CHICAGO, May 11, 2010; Soyoung Kim writing for Reuters reported that efforts to slash the cost of electric vehicles have been hampered by a lack of standardized batteries, potentially limiting early adoption by consumers, the head of Johnson Controls Inc said on Tuesday.

Steve Roell, chief executive of Johnson Controls, which makes automotive batteries, interiors and building efficiency systems, said scale is not there yet to drive costs down -- despite aggressive plans by every major automaker to roll out electric cars and hybrids in the next two to three years.

Speaking at the Reuters Manufacturing and Transportation Summit, Roell said his most optimistic view was that electric vehicles and hybrids would make up 12 to 15 percent of the auto market by 2020.

"Because right now there are so many different suppliers forming their own technologies and their own packaging standards, I think scale is hard to come by," Roell said.

Roell said the cost of hybrid or electric vehicles must come down, or fuel prices would have to spike to areas seen two years ago, for the vehicles to become more popular.

Johnson Controls is the recipient of incentives extended by the Obama administration aimed at helping spur development of advanced electric car batteries.

The U.S. Department of Energy awarded grants in August totaling almost $1 billion to companies including LG Chem (051910.KS), Johnson Controls and A123 Systems (AONE.O).

"The industry is a very immature market, it lacks scale and it lacks standards," Roell said. "What we're going to see over time is that we'll see chemistry and cell format and even battery management systems to begin to form standards, but it's going to take some time."

Editing for Reuters by Matthew Lewis