Market for Plug in Hybrids Set to Ride on Lithium Ion Batteries

Business Wire, April 7, 2008

LONDON -- Plug in hybrid electric vehicles (PHEVs) are set to raise their niche profile and become more mainstream. The global market for PHEVs is poised for expansion, with major vehicle manufacturers pronouncing plans for their production. Issues related to the cost and safety of lithium ion batteries, used in PHEVs, are being resolved. Simultaneously, efforts are on to boost production volumes and achieve related decrease in costs.

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"With the advent of lithium ion battery technology, the automotive industry is set to witness a revolutionary change," notes Frost & Sullivan Research Analyst Anjan Hemanth Kumar. "Stringent emission norms and pressure from environmental advocates are the main factors spurring EOMs to adopt plug in hybrids."

The replacement of NiMH batteries with lithium ion enhances energy density 2 to 3 times, which would be ideal to drive electric vehicles. Another positive trend is the ability of PHEVs to reduce emission levels by 60 to 80 per cent. This will enable vehicle manufacturers to satisfy EURO and CAFE standards in Europe and the United States, respectively.

"However, the cost of lithium ion batteries increases the price of PHEVs in comparison to conventional vehicles," cautions Kumar. "The challenge, therefore, will be to reduce both manufacturing and packaging costs."

Co-operative initiatives of battery manufacturers, governments and energy utilities will accelerate the introduction of PHEVs. Strategies such as leasing batteries and introducing the plug-in feature as an option will offer benefits of cost and evaluation at the initial stage of product introduction. Targeting suburban populations (who have garages to charge their batteries overnight) will boost initial sales until adequate infrastructure is built.

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Global Market Analysis of Plug in Hybrid Electric Vehicles

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