Panasonic holds a 39 percent market share in the emerging battery market for electric vehicles (EV), according to Lux Research. However, the market researcher believes LG Chem has the potential to overtake Panasonic in a market forecast to reach $30 billion in 2020.
The Lux report, Watch the Throne: How LG Chem and Others Can Take Panasonic’s EV Battery Crown by 2020, reveals that Panasonic is in a very vulnerable position in the EV battery market due to its reliance on a single deal with EV leader Tesla, compared to LG Chem, which has signed up large auto makers including General Motors, Volkswagen, Daimler, and Ford. “In the event of a surge in sales of plug-in hybrids (PHEVs) by the German manufacturers, LG Chem would only need to win over Japan’s Nissan to topple Panasonic,” according to the report.
“The battery world’s big three – Panasonic, LG Chem, and Samsung SDI – are engaged in an all-out war for market share in the emerging plug-in vehicle opportunity, yet their strategies differ wildly,” said Cosmin Laslau, Lux Research senior analyst and lead author of the report, in a statement.
Lux cited the Renault-Nissan Alliance as a wildcard. Renault-Nissan is expected to account for nine percent of this market in 2020. The challenge is that AESC, its joint venture that sources batteries from NEC, has been hurt by high costs and lagging technology, which opens the door for LG Chem to win Nissan’s business, said Lux. LG already supplies Renault.
However, the plug-in vehicle market is still very small. Lux reports that even Tesla holds less than a 0.1 percent share of global automotive sales, but auto makers are starting to offer more options, including The Volkswagen Group, which plans to add 20 plug-in options by 2020. The company sold 9.6 million units worldwide in 2014.
Lithium-ion batteries are the primary power source for electric vehicles; however, Lux reports that new technology beyond the current Li-ion batteries is key to the lower cost and higher performance.
The leaders will be those with next-generation technology, and many manufacturers are already making investments in new technologies. The report cites Samsung Ventures’ investment in solid-state battery developer Seeo and graphene-silicon anode maker XG Sciences, Volkswagen’s backing of Quantumscape and GM Ventures’ investment in Sakti3, Envia Systems, and SolidEnergy Systems.