As hybrid and electric cars continue gaining popularity, demand for their batteries will grow
Los Angeles, CA (PRWEB) July 11, 2012
Many households do not realize just how much they rely on batteries. From the battery that starts (or sometimes even powers) the family car to the one that keeps the laptop running, batteries are an essential item in today's age. “Mobile electronics such as cell phones and tablets are becoming increasingly commonplace, a trend that battery manufacturers have welcomed with open arms,” says IBISWorld industry analyst Justin Waterman. Due in part to the proliferation of these gadgets, but also because of increasing interest in hybrid-electric cars, revenue for the Battery Manufacturing industry is expected to grow at an annualized rate of 0.9% to $10.1 billion over the five years to 2012.
Still, manufacturers have faced challenges. The prices of nonferrous metals such as zinc and lead have been volatile over the five-year period. “Rapid growth in developing countries, which is driving up demand for industrial metals, is the root cause of volatility,” adds Waterman. “Manufacturers were able to offset only part of the rise in metal prices through raising battery prices, causing average profit for the Battery Manufacturing industry to contract in 2012.”
Manufacturers that specialize in automotive batteries have struggled to maintain demand due to a severe downturn in the US automotive sector. Over the past five years, concentration has increased in both the consumer and automotive battery segments, owing to mergers and acquisitions by major players such as The Procter & Gamble Company and EnerSys Inc. early in the period. Additionally, the recession prompted households to postpone their nonessential spending, causing demand for battery-utilizing consumer electronics and new cars to crash. As the economic recovery gains traction, higher disposable incomes and pent-up demand will lead to an increase in electronics consumption and, by extension, batteries. As a result, revenue is expected to increase 3.4% in 2012.
The next five years will continue to charge the Battery Manufacturing industry. As interest rates stay low and spending begins to rebound, consumer electronics and motor vehicle sales (which necessitate battery purchases) will continue to rise. Automakers are focusing their research and development efforts on electric vehicles, the primary power source of which are electric batteries. Hybrid-electric vehicles will also continue to grow in popularity. As a result, industry revenue is forecast to grow over the next five years to 2017. For more information, visit IBISWorld’s Battery Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures two types of batteries: storage and primary batteries. Storage batteries are also known as secondary or rechargeable batteries. Primary batteries are non-rechargeable batteries that only have one life. Industry products have a variety of uses in cell phones, medical equipment, households and the automotive and transport sector.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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