Frost: Market for Plug-In Hybrids Set to Ride on Lithium Ion Batteries
May 21, 2008 // Published as a news service by IHS
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Plug-in hybrid electric vehicles (PHEVs) are set to raise their niche profile and become more mainstream, according to Frost & Sullivan, as major vehicle manufacturers reveal plans for their production.
Analysts said issues related to the cost and safety of lithium ion batteries, used in PHEVs, are being resolved, while efforts to boost production volumes and decrease costs are underway.
"With the advent of lithium ion battery technology, the automotive industry is set to witness a revolutionary change," said Frost & Sullivan research analyst Anjan Hemanth Kumar.
"Stringent emission norms and pressure from environmental advocates are the main factors spurring OEMs [original equipment manufacturers] to adopt plug-in hybrids."
The replacement of nickel-metal hydride (NiMH) batteries with lithium ion enhances energy density two to three times, analysts said, which would be ideal to drive electric vehicles.
Another positive trend is the ability of PHEVs to reduce emission levels by 60% to 80%. This will enable vehicle manufacturers to satisfy fuel standards in Europe and the U.S.
"However, the cost of lithium ion batteries increases the price of PHEVs in comparison to conventional vehicles," said Kumar. "The challenge, therefore, will be to reduce both manufacturing and packaging costs."
Cooperative initiatives of battery manufacturers, governments and energy utilities will accelerate the introduction of PHEVs. Analysts said 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 will boost initial sales until adequate infrastructure is built.
Source: Frost & Sullivan.