As hybrid and electric cars continue gaining popularity, demand for their batteries will grow.
New York, NY (PRWEB) March 19, 2014
Nearly every US household uses 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 tablets, are becoming increasingly commonplace and, thus, increasing demand for batteries. Due to the proliferation of electronics and increasing interest in hybrid electric cars, revenue for the Battery Manufacturing industry is estimated to grow at an annualized rate of 5.2% to $12.9 billion over the five years to 2014.
According to IBISWorld Industry Analyst Britanny Carter, “Despite growing demand, rising input costs have challenged industry operators over the period.” Refined lead and similar metals used to manufacture batteries have become increasingly scarce as countries like India continue to develop manufacturing sectors. In response to growing demand and scarce supply, nonferrous metal prices have risen at an average annual rate of 8.0% in the five years to 2014. Manufacturers were able to offset only part of the rise in metal prices by increasing battery prices, causing average profit to contract from 4.6% of revenue in 2009 to an estimated 4.3% in 2014.
“Demand from car and automobile manufacturing plummeted in 2009 and manufactures that specialize in automotive batteries struggled to stay afloat,” says Carter. Furthermore, the recession prompted households to postpone nonessential spending and demand for consumer electronics fell 11.1%, leading to a 6.9% drop in industry revenue in 2009. As the economy continues to recover, however, higher disposable incomes will increase electronics purchases and, by extension, batteries. Demand from car and automobile manufacturing has also rebounded over the period. As a result, industry revenue is expected to increase 2.1% in 2014.
Economic recovery over the next five years will continue to charge the Battery Manufacturing industry. As discretionary income rises, consumer electronics that use batteries will increase, boosting industry revenue. Increasing environmental concerns and skyrocketing gasoline prices will also push demand for hybrid electric vehicles that use hybrid batteries, which provide more favorable returns than traditional batteries. Slowing demand from the automobile industry and rising low-cost imports from countries like China, however, will hamper growth in the five years to 2019.
For more information, visit IBISWorld’s Battery Manufacturing industry in the US industry report page.
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IBISWorld industry Report Key Topics
The Battery Manufacturing industry manufactures two types of batteries: storage and primary batteries. Storage batteries are also known as secondary or rechargeable batteries. Primary batteries are nonrechargeable batteries that have only 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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