Los Angeles, CA (PRWEB) September 02, 2014
Lithium-ion batteries have a buyer power score of 3.3 out of 5. This score indicates that neither buyers nor suppliers have a distinct advantage with regard to negotiating prices. “Suppliers have been raising the price of lithium-ion batteries during the three years to 2014, largely due to rising demand,” according to IBISWorld business research analyst, Jeffrey Cohen. Still, buyers benefit from low market share concentration, moderate product specialization and moderate switching costs.
During the past three years, research and development costs have negatively affected suppliers and buyers alike. These costs have greatly increased as suppliers looked for ways to increase the energy storing capacity of lithium-ion batteries. In response to rising costs, suppliers passed some of these costs on to buyers by increasing the overall price of lithium-ion batteries. Additionally, as increasing research and development costs cut into suppliers' profit margins, suppliers have become less willing to negotiate lower prices with buyers, hurting buyer power. Another factor that has harmed buyer power is high price driver volatility. This trend is due in large part to the high volatility in the price of key inputs (i.e. steel and aluminum) that go into lithium-ion batteries. Although overall price volatility has been low over the past three years, high volatility in price drivers harms buyer power because it leads to more difficulty on the buyer's behalf when budgeting for purchases.
Despite these strains on buyer power, lithium-ion batteries are largely standardized products, which allows buyers to readily compare the prices and offerings of various vendors. “Because there are several suppliers of lithium-ion batteries throughout the wholesale and manufacturing channels, buyers also have a wide selection of suppliers to choose from,” says Cohen. Therefore, the highly fragmented nature of the market positively affects buyer negotiating power. Lastly, switching costs are moderate in the lithium-ion batteries market because there are several suppliers that sell lithium-ion batteries, thereby allowing buyers to pit suppliers against one another before making a purchase. Major vendors include EnerSys Inc., Johnson Controls Inc., Panasonic Corporation and Targay Technology International Inc. For more information, visit IBISWorld’s Lithium-Ion Batteries procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of lithium-ion batteries. Lithium-ion batteries are rechargeable and commonly used in consumer electronics, as well as for electric vehicle, aerospace and military purposes. Also included in the scope of this report are lithium-ion batteries that go into goods to be resold. Lithium-ion batteries are beginning to replace lead-acid batteries. This report excludes other types of batteries such as alkaline, nickel-iron and lead-acid batteries. This report also excludes battery recycling.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.