Global Automotive Lithium-ion Battery Market: Key Research Findings 2019
Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the worldwide market of automotive lithium-ion battery, and has found out the trends by product segment, the trend by market players, and the future perspectives.
In 2018, the global market of automotive lithium-ion battery (LiB) by battery capacity resulted in110.5GWh, increased by 92.4% from the previous year.
In China, the world’s biggest market for xEV, the demand shrank for commercial Plug-in Hybrid Vehicle (PHEV) and Electric Vehicles (EV) such as electric buses as the government subsidy for electric vehicles was reduced: However, in the second half of 2018, the demand recovered mainly in xEV for passenger cars, continually driving the market growth for xEV worldwide. In Europe, sales of Hybrid Electric Vehicles (HEV) is rising in recent years, affected by the slowdown in sales of diesel engine due to the ’Dieselgate Scandal’. Further production and market launch of EV and PHEV is scheduled among the major automobile manufacturers to prepare for the world’s strictest standard on CO2 emission (95g/km) starting 2021.
The market growth of EV and PHEV had been dependent on the government subsidies and tax benefits aimed to encourage consumer acceptance. Nevertheless, the Netherlands and UK scrapped their tax benefits on PHEV; the tariff reduction on EV is ended in Denmark; and China reduced the government subsidies further in 2019, aiming to eliminate the subsidies completely by 2020. It is undeniable that the abolitions of incentives and tax benefits for the purchase of EV would slow down the market growth of EV and PHEV hereafter.
On the other hand, however, both an enforcement of the New Energy Vehicle (NEV) system in China starting 2019 obligating the automakers to produce and sell a certain ratio of new-energy vehicles, and the implementation of more stringent emission standards in EU should drive the market growth for xEV as the alternative to the subsidy programs.
Compliance to Stricter Environmental Standards Worldwide Leads to Expansion of Electrification
China introduced the Corporate Average Fuel Consumption (CAFC) as a fuel efficiency requirement for automobiles, setting a penalty to the automakers that fail to meet the standard. Moreover, as the NEV system was reinforced in 2019, the automakers and import car dealers are required to increase the number of production/import of NEV passenger vehicles in proportion to the total number of increase in production/import of passenger cars.
In Europe, the ‘95g/km mark’, the world’s most stringent CO2 emission target, will be implemented in 2021, expecting the automakers to achieve almost 30% lower emission compared to the 2015 target. Besides, in December 2018, the European Union agreed to commit to reducing CO2 emissions by 37.5 percent by corporate average for passenger vehicles from 2021 to 2030. The automakers must drastically increase the sales ratio of EVs with no emission of greenhouse gases like CO2, as the total sales of clean diesel vehicles, HEV, and PHEV will not be enough to comply with the new emission standards.
In June 2019, Japan announced its new fuel economy guides which is at the same level with the EU standards, newly mandating the automobile manufacturers to improve fuel consumption of the new cars by 32% by FY2030, compared to the actual value achieved in FY2016. The target fuel economy guide for EV and PHEV are also introduced to achieve lower fuel consumption for wider variety of vehicles, urging the automakers for technical innovation.
In the United States, although the fuel efficiency requirements appear to be relaxing in the President Trump administration, the State of California redefined the vehicle types in the Zero Emission Vehicle (ZEV) program in 2018, and assigned the ‘credits’ to the target automobile manufacturers, a percentage of sales target for advanced clean cars each year based on the total number of cars sold in California by the manufacturers, enforcing the target automakers to comply with the ZEV standards.
The trend of stricter emission control is also seen in India and other emerging countries like ASEAN nations as a solution to the air pollution. The governments are providing support and preferential policies to spur the adoption of electric vehicles (M-HEV, HEV, PHEV, EV, etc.).
Considering the market environment of xEV market, two growth forecasts are generated; a policy-based forecast and a market-based forecast.
For the policy-based forecast, with worldwide movement for tightening environmental regulations, each government’s policies promoting expansion of EV market, and the automaker’s shift to electrification in line with the trend, the automakers and the governments introducing xEV are assumed to achieve 80 to 100% of their goals. The global market of automotive LiB is estimated to result in 188.2GWh in 2019 (based on capacity), 170.3% compared to the previous year.
On the other hand, the market growth is estimated lower for the market-based forecast compared to the policy-based forecast, on assumption that a certain period of time is needed to solve various issues regarding the penetration of xEV. The market is projected to achieve 162.2GWh in 2019, 146.8% compared to the previous year.
Currently, the automobile manufacturers are producing/launching the xEV to meet the standards in each country. In the light of consumer needs, such as user-friendliness and affordable price, whether or not the vehicles are to be fully accepted remains uncertain. Particularly, the EV has many challenges such as high price due to battery cost, short mileage per charge, and lack of charging-infrastructure. It is conceivable that delivering solution to every one of these issues takes long time. Based on the situation, the market-based forecast for the size of global automotive LiB market is assumed to reach 503.4GWh by 2030.
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