The global battery market is a powerhouse, currently valued at approximately $55 billion, with roughly $6 billion attributed to rechargeable batteries. Projections estimate a steady growth rate of 5% annually through 2012. Key markets experiencing significant gains include Indonesia, Pakistan, Ecuador, Germany, and Japan.
The automotive sector is fueling substantial growth within the battery industry, marked by strong double-digit expansion. Hybrid Electric Vehicles (HEVs) are driving increased demand for lithium and related chemical technologies. Simultaneously, the established Sealed Lead-Acid (SLA) battery market maintains robust revenues, supported by aftermarket sales and the ever-expanding global vehicle fleet. Replacement needs account for nearly 50% of the $13 billion lead-acid battery market.
Despite fluctuating lead prices, the SLA battery sector is poised for continued growth, underpinned by its reliability, durable construction, low maintenance costs, competitive performance, and the absence of a commercially viable alternative that can completely replicate its attributes.
The PC battery market represents another rapidly expanding segment, projected to increase from $1.5 billion in 2006 at an approximate compound annual growth rate (CAGR) of 8%.
These market dynamics highlight the immense potential within the battery industry, attracting significant venture capital investment. A revolutionary breakthrough in battery technology holds the promise of substantial returns, given the widespread reliance on batteries for portability.
Within the diverse landscape of chemical technologies, the lithium rechargeable battery market is projected to reach $7 billion by 2015. Notably, the lithium rechargeable battery segment for Hybrid Electric Vehicles is anticipated to surge from near zero in 2006 to approximately $2 billion in 2015 – equivalent to a 50% year-over-year CAGR. While the overall demand for lithium batteries is rising rapidly, revenue growth is moderated by cost reductions achieved through improved manufacturing efficiencies and increased production volumes.
The storage battery market is intensely competitive, with substantial investments allocated to research and development annually. Advancements in both novel and established chemical technologies are expected to yield battery capacity improvements (for equivalent size and weight) of three to four times within the next four years. This rate of capacity doubling every two and a half years mirrors Moore’s Law in the computer industry.
Consumers typically purchase single-use batteries four times per year. These batteries often generate the highest profit margin per square foot in retail stores and are frequently impulse purchases. Single-use batteries are sold in more retail locations than virtually any other product, reflecting the ubiquity of battery-powered devices, making them generally resistant to economic downturns.
From an environmental perspective, disposable batteries pose challenges due to their inherent nature. Landfills worldwide contain significant quantities of potentially toxic byproducts from discarded batteries. In response, the European Union introduced the European Directive on Batteries, mandating recycling practices. It is anticipated that the United States and other countries will follow suit by enacting similar environmental regulations.