EXECUTIVE SUMMARY: Pike Pulse Report: Electric · PDF fileElectric Vehicle Batteries Assessment of Strategy and ... As detailed in Pike Research’s Electric Vehicle Batteries report,

John GartnerResearch Director

Bob GohnVice President of Research

EXECUTIVE SUMMARY: Pike Pulse Report: Electric Vehicle Batteries Assessment of Strategy and Execution for 10 Leading Lithium Ion Battery Vendors

NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Pike Research at [email protected].

Published 1Q 2012

Pike Pulse Report: Electric Vehicle Batteries

© 2012 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.

1

Section 1 EXECUTIVE SUMMARY

1.1 Introduction

The electric vehicle (EV) battery industry is entering a mature phase. Some companies have developed products for as long as 15 years, while others are less than a decade old. The original development efforts focused on nickel-metal hydride (NiMH) and lead-acid batteries, but now companies and automakers have standardized on lithium ion (Li-ion) batteries.

As detailed in Pike Research’s Electric Vehicle Batteries report, the global market for Li-ion batteries is expected to grow by 450% from 2012 to 2017 to nearly 28 million kWh. The majority (74%) of demand for EV batteries will come from battery electric vehicles (BEVs) due to the vehicle’s larger battery packs.

Chart 1.1 Lithium Ion Transportation Battery Capacity, World Markets: 2017

(Source: Pike Research)

For the purposes of this report, Pike Research focuses exclusively on Li-ion battery manufacturers that are currently selling product to at least one automotive OEM for use in a light-duty passenger vehicle that is being marketed to consumers. Therefore, several companies that participate in other market segments, such as electric buses or medium/heavy-duty trucks, are not included.

HEV, 1.14

PHEV, 6.14

BEV, 20.69

(Million kWh)



2

The criteria on which the EV battery vendors were scored in this Pike Pulse are:

Vision

Go-to-Market Strategy

Partners

Product Strategy and Roadmap

Geographic Reach

Market Share

Sales and Marketing

Product Quality and Reliability

Product Portfolio

Staying Power



3

1.2 The Pike Pulse Grid

LG Chem was ranked highest in both the Strategy and Execution categories in this Pike Pulse and as the market leader today. The company has a diversified customer base of international automotive OEMs that are expected to be among the most successful sellers of hybrid and plug-in vehicles.

The Contenders shown in the Pike Pulse Grid in Chart 1.2 have shown the potential in both their business planning and execution to become market leaders. These companies have all established relationships with the top selling global OEMs and could quickly rise in the rankings by expanding their market share. The Challengers face greater obstacles, as they are not viewed by the industry as being in the elite field of EV battery companies. They also do not currently have the manufacturing capacity in place to produce the volumes necessary to become a global leader.

Chart 1.2 The Pike Pulse Grid

(Source: Pike Research)



4

The spread of scores shown in Table 1.1 indicates the differences between companies in terms of their ability to communicate a clear vision for their battery development efforts and translate that vision into significant customer wins. EV battery market share is largely dependent on contracts with OEMs that are selling light-duty vehicles in volume.

Table 1.1 Vendor Overall Scores

Rank Vendor Total Score 1 LG Chem 76.4

2 Johnson Controls 73.6

3 GS Yuasa 69.8

4 AESC 65.6

5 A123 Systems 64.6

6 Panasonic Group 62.4

7 SB LiMotive 56.5

8 Hitachi Vehicle Energy 52.8

9 BYD 50.9

10 Electrovaya 44.9 (Source: Pike Research)

Battery supplier relationships are expected to evolve over time. Some of the largest vehicle manufacturers currently source batteries from multiple vendors depending on the vehicle platform (e.g., HEVs or BEVs). Several are likely to shift suppliers as the market better understands the performance characteristics and longevity of the various battery makers and chemistries.

Note that the ability to sell Li-ion batteries into the three largest plug-in electric vehicle (PEV) markets (China, the United States, and Japan) is a requirement for automakers to be able to scale production and remain competitive. Companies that are not currently serving at least two of these markets will be at a distinct disadvantage in the long term.



30

Section 7 TABLE OF CONTENTS

Section 1 ...................................................................................................................................................... 1 Executive Summary .................................................................................................................................... 1

1.1 Introduction .................................................................................................................................... 1 1.2 The Pike Pulse Grid ...................................................................................................................... 3

Section 2 ...................................................................................................................................................... 5 Market Overview .......................................................................................................................................... 5

2.1 Market Definition ........................................................................................................................... 5 2.1.1 Power versus Energy Batteries ............................................................................................... 5

2.2 Market Trends ............................................................................................................................... 5 2.2.1 Chemistry Options ................................................................................................................... 5 2.2.2 Battery Cost ............................................................................................................................. 7 2.2.3 Hybrid Electric Vehicles ........................................................................................................... 7 2.2.4 Plug-in Electric Vehicles .......................................................................................................... 8

2.3 Market Drivers ............................................................................................................................... 9 2.3.1 Electrified Vehicle Sales .......................................................................................................... 9 2.3.2 Regional Demand .................................................................................................................... 9

2.3.2.1 Asia Pacific ..................................................................................................................... 9 2.3.2.2 North America ............................................................................................................... 10 2.3.2.3 Europe .......................................................................................................................... 10

2.3.3 Synergy with Energy Storage ................................................................................................ 10 Section 3 .................................................................................................................................................... 11 The Pike Pulse ........................................................................................................................................... 11

3.1 The Pike Pulse Grid .................................................................................................................... 11 3.2 Company Rankings ..................................................................................................................... 13

3.2.1 Leaders .................................................................................................................................. 13 3.2.1.1 LG Chem ...................................................................................................................... 13

3.2.2 Contenders ............................................................................................................................ 14 3.2.2.1 Johnson Controls Inc. (JCI) .......................................................................................... 14 3.2.2.2 GS Yuasa ..................................................................................................................... 15 3.2.2.3 Automotive Energy Supply Corp. (AESC) .................................................................... 16 3.2.2.4 A123 Systems ............................................................................................................... 17 3.2.2.5 Panasonic Group .......................................................................................................... 18 3.2.2.6 SB LiMotive ................................................................................................................... 19

3.2.3 Challengers ........................................................................................................................... 20 3.2.3.1 Hitachi Vehicle Energy (HVE) ....................................................................................... 20 3.2.3.2 BYD ............................................................................................................................... 21 3.2.3.3 Electrovaya ................................................................................................................... 22

Section 4 .................................................................................................................................................... 23 Vendor Profiles .......................................................................................................................................... 23

4.1 Leaders ....................................................................................................................................... 23 4.1.1 LG Chem ............................................................................................................................... 23

4.2 Contenders .................................................................................................................................. 23 4.2.1 Johnson Controls Inc. (JCI) ................................................................................................... 23 4.2.2 GS Yuasa .............................................................................................................................. 24 4.2.3 Automotive Energy Supply Corp. (AESC) ............................................................................. 24 4.2.4 A123 Systems ....................................................................................................................... 24 4.2.5 Panasonic Group ................................................................................................................... 25



31

4.2.6 SB LiMotive ........................................................................................................................... 25 4.3 Challengers ................................................................................................................................. 26

4.3.1 Hitachi Vehicle Energy (HVE) ............................................................................................... 26 4.3.2 BYD ....................................................................................................................................... 26 4.3.3 Electrovaya ............................................................................................................................ 27

4.4 Followers ..................................................................................................................................... 27 Section 5 .................................................................................................................................................... 28 Company Directory ................................................................................................................................... 28 Section 6 .................................................................................................................................................... 29 Acronym and Abbreviation List ............................................................................................................... 29 Section 7 .................................................................................................................................................... 30 Table of Contents ...................................................................................................................................... 30 Section 8 .................................................................................................................................................... 32 Table of Charts and Figures..................................................................................................................... 32 Section 9 .................................................................................................................................................... 33 Scope of Study .......................................................................................................................................... 33

9.1 Scope of Study ............................................................................................................................ 33 9.2 Sources and Methodology .......................................................................................................... 33

9.2.1 Vendor Selection ................................................................................................................... 33 9.2.2 Ratings Scale ........................................................................................................................ 34

9.2.2.1 Score Calculations ........................................................................................................ 34 9.2.3 Criteria Definitions ................................................................................................................. 34

9.2.3.1 Strategy ........................................................................................................................ 34 9.2.3.2 Execution ...................................................................................................................... 35



32

Section 8 TABLE OF CHARTS AND FIGURES

Chart 1.1 Lithium Ion Transportation Battery Capacity, World Markets: 2017 ........................................ 1 Chart 1.2 The Pike Pulse Grid ................................................................................................................ 3 Chart 2.1 Lithium Ion Transportation Battery Revenue, World Markets: 2012-2017 .............................. 6 Chart 2.2 Annual Electrified Vehicle Sales by Segment, World Markets: 2012-2017 ............................ 9 Chart 3.1 The Pike Pulse Grid .............................................................................................................. 11 Chart 3.2 LG Chem Strategy & Execution Scores ................................................................................ 13 Chart 3.3 Johnson Controls Strategy & Execution Scores ................................................................... 14 Chart 3.4 GS Yuasa Strategy & Execution Scores ............................................................................... 15 Chart 3.5 AESC Strategy & Execution Scores ...................................................................................... 16 Chart 3.6 A123 Systems Strategy & Execution Scores ........................................................................ 17 Chart 3.7 Panasonic Group Strategy & Execution Scores .................................................................... 18 Chart 3.8 SB LiMotive Strategy & Execution Scores ............................................................................ 19 Chart 3.9 Hitachi Vehicle Energy Strategy & Execution Scores ........................................................... 20 Chart 3.10 BYD Strategy & Execution Scores ........................................................................................ 21 Chart 3.11 Electrovaya Strategy & Execution Scores ............................................................................. 22

Figure 2.1 Global High Energy Lithium Ion Battery Estimated Cost Components: 2011 ......................... 7

Table 1.1 Vendor Overall Scores ............................................................................................................ 4 Table 2.1 Li-ion Battery Cost, World Markets: 2010-2017 ...................................................................... 7 Table 2.2 Lithium Ion Installed New Capacity, World Markets: 2011-2020 .......................................... 10 Table 3.1 Vendor Overall Scores .......................................................................................................... 12



33

Section 9 SCOPE OF STUDY

9.1 Scope of Study

Pike Research has prepared this report to provide participants involved in the electrification of passenger vehicles, including automotive manufacturers, drivetrain manufacturers and battery companies as well as energy storage companies that may be considering Li-ion batteries, with a study of the landscape of the major providers of Li-ion batteries.

Its major objective is to provide a timely overview of the companies involved and their strategy and execution in building a market for electric vehicle batteries, including those used in HEVs, PHEVs and BEVs. The company ratings capture the vendor's standing at the time of the report and are not a retrospective of past accomplishments or an indication of future success. The ratings are likely to change rapidly as the market for EVs is fluid, and the loss or addition of a significant customer would influence the ratings.

9.2 Sources and Methodology

Pike Research’s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike Research’s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community.

Additional analysis includes secondary research conducted by Pike Research’s analysts and the firm’s staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report.

These primary and secondary research sources, combined with the analyst’s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Pike Research’s reports. Great care is taken in making sure that all analysis is well supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients.

Pike Research is an independent market research firm whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. The firm is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets.

9.2.1 Vendor Selection

The companies selected for this report are producers of Li-ion batteries that currently have supplier contracts with at least one automotive manufacturer that is likely to be selling electrified vehicles in quantity during the coming years. Manufacturers of batteries for other vehicles segments, including two-wheeled vehicles, trucks and buses, or plug-in retrofits are not included so that a more direct comparison can be made. Battery companies that have not entered into volume production but may have developed competitive products are



34

also not included as they would reflect poorly in the Execution category.

9.2.2 Ratings Scale

Companies are rated relative to each other using the following point system. The ratings are a snapshot in time, showing the current state of the company. These scores are likely to be fluid as new competitors enter the market and customer requirements evolve.

Very Strong 91 - 100

Strong 76 - 90

Strong Moderate 56 - 75

Moderate 36 - 55

Weak Moderate 21 - 36

Weak 11 - 20

Very Weak 1 - 10

9.2.2.1 Score Calculations

The scores for Strategy and Execution are weighted averages based on the subcategories. The Overall score is calculated based on the root mean square of the Strategy and Execution scores.

9.2.3 Criteria Definitions

9.2.3.1 Strategy

Vision: Evaluates the company's stated goals in designing market solutions against the actual needs of customers based on the entire environment in which they will operate. Clear and compelling visions that are effectively communicated to the industry result in higher scores.

Go-to-Market Strategy: Evaluates the company's strategy for reaching the target market, including the sales and marketing channels to be used, as well as the processes established for informing the target market about brand differentiation and unique product value.

Partners: Measures the company's established partnerships with key organizations that will provide an advantage in sales, business, and product development, as well as the implementation of the product by customers. Considers existing affiliations with key suppliers and with large automotive OEM customers that are expected to sell high-volume electric vehicles.

Product Strategy and Roadmap: Evaluates the long-term competitiveness of the product plan, both as an effective solution that satisfies market requirements and as a profitable line for the company to merit continued product development investment. Scores are based on having products that appropriately serve multiple markets and can navigate changes in market demand.

Geographic Reach: Gives higher scores to companies with international manufacturing capabilities and partnerships and sales channels established in multiple regions.



35

9.2.3.2 Execution

Market Share: Evaluates the company's current share of the Li-ion batteries for transportation market including light duty HEVs, PHEVs and BEVs, including recent sales agreements and key customer accounts that are likely to affect sales during the next calendar year.

Sales and Marketing: Evaluates the capabilities of the company’s existing sales and marketing resources, the company’s understanding of the most suitable target markets, and its ability to successfully influence customer perceptions and purchases.

Product Quality and Reliability: Evaluates the quality and reliability of the batteries delivered to automotive customers, the company’s strategy to develop quality products for the market, and its track record on quality, longevity, and safety with its current product line.

Product Portfolio: Evaluates the completeness of the company's portfolio based on automotive industry customer needs.

Staying Power: Evaluates whether the company has ready access to the necessary capital to deliver the expected volumes based on short-term market growth projections. Also evaluates whether the company has access to capital for long-term investment in product development and to scale up to enable volume production (and lower costs) as the market evolves.



36

Published 1Q 2012

© 2012 Pike Research LLC 1320 Pearl Street, Suite 300

Boulder, CO 80302 USA Tel: +1 303.997.7609

http://www.pikeresearch.com

This publication is provided by Pike Research LLC (“Pike”). This publication may be used only as expressly permitted by license from Pike and may not otherwise be reproduced, recorded, photocopied, distributed, displayed, modified, extracted, accessed or used without the express written permission of Pike. Notwithstanding the foregoing, Pike makes no claim to any Government data and other data obtained from public sources found in this publication (whether or not the owners of such data are noted in this publication). If you do not have a license from Pike covering this publication, please refrain from accessing or using this publication. Please contact Pike to obtain a license to this publication.

Documents

EXECUTIVE SUMMARY: Pike Pulse Report: Electric · PDF fileElectric Vehicle Batteries Assessment of Strategy and ... As detailed in Pike Research’s Electric Vehicle Batteries report,