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Battery Growth, But Profits Elusive

January 28, 2012 in Electric Drive, EVs by Rich Piellisch  |  No Comments

The market for e-drive vehicles’ battery modules will grow at 25% per year to be worth $47 billion in 2020.

But price pressures and elusive economies of scale will combine to suppress profits.

That’s the word from ABI Research and analyst David Alexander. “The buyers still aren’t there,” he says.

“There is already intense competition in the market, with new and old manufacturers tooling up for a demand that has not yet materialized.

“Unfortunately there is almost no flexibility in pricing, and any drop would be impractical if companies want to keep up their loan repayment schedules. Most are hanging on in the hope that EV and PHEV demand picks up in 2012.”

Economies of scale? Due to the labor-intensive nature of battery module manufacturing, “This is one area where that’s not going to happen,” Alexander told F&F.

ABI’s 66-page Electric and Hybrid-Electric Vehicle Components is priced at $5,000.

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