Battery market for electric vehicles to rise to $10 Billion in 2020, thanks to Tesla, BYD and VW [Report]

A new research report from Lux Research looked into the projected growth of the battery sector for electric vehicles (BEVs and PHEVs) and concluded that the market will rise to $10 Billion in 2020 with six large carmakers led by Tesla accounting for 90% of the demand.

The research paper looked at both the demand from automakers and supply from battery manufacturers. Chris Robinson, Lux Research Associate and lead author of the report, sees  Panasonic keeping its lead with 46% market share, thanks to its Gigafactory deal with Tesla and the demand for the Model 3, followed by BYD, LG Chem, NEC, Samsung SDI and others.

Robinson added:

“Plug-in adoption is ultimately being fueled by rapidly decreasing battery costs and the success of early EVs such as Tesla’s Model S and Nissan’s Leaf, which has forced a number of other OEMs to make more serious commitments to developing plug-in vehicles,”

Lux released this graph showing its projected market demand from the top EV makers in the next 4 years:

Here are the key points being made in the report:

• EVs will take a giant share of battery demand. Plug-in hybrid electric vehicles (PHEVs) will do well in unit sales, accounting for 740,000 of 1.5 million plug-in vehicles. Still, EVs will account for over 80% of the energy storage demand, due to their larger battery packs.
• Tesla’s dominance will grow. Tesla, driven by its forthcoming Model 3, will continue to power the lion’s share of battery demand from EVs through 2020. Although the company is unlikely to meet its own aggressive sales targets, Tesla will still account for nearly half of the EV market’s battery consumption – followed by Nissan and GM.
• BYD will lose PHEV lead in 2019. BYD will dominate battery demand from PHEVs on the strength of robust sales driven by generous subsidies. But the Chinese company will cede its lead in 2019 when European and American carmakers gain ground. Volkswagen will show the most growth as it focuses on plug-ins following its emissions scandal, while Toyota will continue to lag in PHEV sales as it focuses more on hybrids and fuel cells.

Indeed, the VW group is expected to drive the electric vehicle market in the next few years. The automaker recently announced plans to build 2 to 3 million all-electric cars a year by 2025 and to introduce up to 30 new electric models.