As technology improves, industry demand and production will continue to rise
New York, NY (PRWEB) February 04, 2015
The Lithium Battery Manufacturing industry is expected to more than double in size over the five years to 2015. Prior to the five-year period, US lithium and lithium-ion production comprised battery manufacturers catering to niche markets, such as defense contractors building advanced electronics and weaponry. Government incentives and improving technology, however, have spurred automobile manufacturers to begin producing lithium-ion batteries domestically. As a result, industry revenue is expected to grow an annualized 16.4%, reaching $3.1 billion during the period.
Lithium and lithium-ion batteries compete with batteries composed of alternative compounds. While lithium-ion batteries have become the defacto choice for electric automobile manufacturers due to its superior energy performance, the high price of lithium-ion batteries has limited demand and electric vehicle production. To expand the potential market for lithium-ion batteries, government organizations and industry players have invested heavily in research and development. These initiatives have decreased production costs and, as a result, electric car sales have grown considerably over the past five years. In 2010, Nissan launched the Leaf as the first mass-produced car in the United States. Other automobile manufacturers have followed suit, more than doubling industry revenue over the period. Production is expected to continue rising through 2015, boosting revenue 16.7% during the year.
Industry demand and production will continue to rise over the five years to 2020, with revenue projected to rise an annualized 16.3% to $6.5 billion. As a growing industry with heavy government assistance, research and development is expected to continue reducing production costs, allowing companies to sell batteries at a lower price while maintaining profit. Lower battery prices are anticipated to translate to improved downstream demand and expansion into previously untapped markets. However, industry projections hinge on a number of potential threats and initiatives. China is investing heavily in lithium-ion battery production and, through heavy subsidies and grants, could potentially flood the market with an oversupply of lithium-ion batteries, forcing operators to lower their prices and reducing revenue. If Tesla's factory were completed by 2020, US lithium-ion production would exceed current global production levels and establish the United States as the world leader in lithium-ion battery production.
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IBISWorld industry Report Key Topics
This industry manufactures primary and secondary batteries that use lithium as an anode. Industry products are most commonly used in vehicles and electronic devices such as cell phones, cameras, laptops, pacemakers and toys.
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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