Automotive Assembly

Battery Manufacturing Puts Charge Into Economy

The market for advanced batteries is expected to reach nearly $50 billion by 2020.

Batteries are big business.

Just consider one segment of the market—electric vehicles. According to Navigant Research, sales of plug-in electric cars will reach 5.2 million units worldwide by 2017, up from 114,000 vehicles in 2011. Sales of hybrid electric cars will represent an additional 8.7 million vehicles, for a combined total of 13.9 million units. Adoption will be highest in North America, where electric cars will capture 4.9 percent of the total light vehicle market in 2017.

Last August, the Toyota Prius became the third best-selling car in the world. Virtually every major OEM—Ford, Nissan, GM, Honda, Hyundai, Toyota and BMW—is preparing new models of hybrid and electric cars with improved performance, longer range and lower costs.

The market could be even better for electric motorcycles and scooters. Navigant predicts the total number of electric two-wheelers on the road, worldwide, will increase from 17 million in 2011 to a staggering 138 million by 2017. In North America alone, sales of electric motorcycles are expected to grow at a compound annual rate of 71 percent.

All those vehicles will require batteries. According to the U.S. Department of Energy, the market for advanced batteries is expected to grow from $5 billion in 2010 to nearly $50 billion in 2020, an average annual growth rate of roughly 25 percent.

Better yet, the United States is poised to become the world leader in the technology. Under the Obama administration, the DOE has awarded $2 billion in grants to 29 companies to build or retool 45 manufacturing facilities spread across 20 states to build advanced batteries, engines, drivetrains and other key components for electric vehicles. More than 30 of these plants are already in operation, employing thousands of Americans, and the DOE’s grants were matched dollar for dollar (or more) by private investments. 

One of those facilities is GE’s new, $170 million advanced battery manufacturing facility in Schenectady, NY. At full capacity, the plant will employ 450 workers. As large as four football fields, the facility is already producing GE’s next-generation Durathon batteries. The batteries are half the size of conventional lead-acid batteries, but last ten times as long and take half the amount of space. GE expects the plant to generate more than $1 billion in revenue annually in just a few years.

That’s just the advanced automotive segment of the market. All totaled, the U.S. battery manufacturing industry consists of some 125 companies with combined annual revenue of approximately $11 billion. The average annual revenue per worker in the industry is $445,000.

If you haven’t read senior editor Austin Weber’s comprehensive report on issues facing the industry, you should. Click here.

What do you think? How will battery manufacturing evolve in the next few years? Should the DOE be investing in battery R&D? What assembly technologies will be important to the industry? Share your thoughts!

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