Using our News Commentary feature (client registration required), Lux Research analysts have been tracking the energy storage space with unprecedented detail, covering more than 300 chosen individual developments during the past half year. These innovation-related events span from partnerships and investments to new research and new factories, and include information about the companies involved and our own takes on the developments. While this set of coverage is not meant to include every single development, it does capture much of what Lux analysts think is worth considering. The full dataset is available to Lux members to explore here, by clicking the News tab’s Energy Storage filter (client registration required), which includes interactive versions of the visualizations shown below. To help extract insights from this wealth of data, in this summary we analyze the trends that have emerged out of this in-depth coverage of how the energy storage landscape looks like in 2017 thus far, using the following heat map:
Samsung SDI is going to invest $600 million in China’s Shaanxi province to build China’s largest manufacturing base of lithium-ion batteries for electric vehicles (EVs). Two Chinese joint venture (JV) partners are involved: the government of Shaanxi Province and Anqing Ring New Group. Anqing is one of China’s leading auto parts suppliers, and the company has China’s biggest market share of piston rings and cylinder sleeves. Samsung plans to start construction of the plant in April 2014, and the plant is projected to start production at the end of 2014.
The two partners are strategic for Samsung SDI. Partnering with the Chinese government will no doubt help accelerate establishment of the project, and partnering with a leading Chinese auto-part supplier enables Samsung SDI to leverage the partner’s massive OEM customer connections, making penetration into the Chinese market easier.
By hiring lower-cost local Chinese employees and possibly procuring less expensive Chinese-made battery materials, Chinese-made Samsung SDI batteries are projected to be less costly than Korean-made products. The company’s China plant is not only able to keep supplying to existing foreign-made EVs like Chrysler F500e and BMW i3, but it helps the company to enter into what Lux forecasts will be the world’s largest EV market (see the report “Seizing the Shifting Opportunity in the $41 Billion Mobile Energy Storage Market” — client registration required). Though at this point it is hard for foreign-branded batteries to find a strong position in China’s EV space, the Chinese government’s protectionism over domestic products is projected to be weakened as the EV industry matures.
Already, BAIC – China’s top state-owned EV OEM – has started to adopt Toshiba’s lithium-titanate (LTO) battery cells. Secondly, the trend has begun of international EV leaders manufacturing their EV models in China’s joint venture automotive OEMs. The Nissan Leaf has already been produced in China’s Dongfeng-Nissan plant, and dozens of Leafs have already been demonstrated in the cities of Guangzhou, Dalian, and Xiangyang. Chinese-made, foreign-branded EVs is the additional targeted market for Samsung SDI’s China plant, and most of the company’s existing customers like Chrysler and BMW already have JV plants in China.
Samsung SDI’s construction of a China plant will no doubt boost the innovation of leading Chinese battery manufacturers, in reaction to the aggressive move from a strong Korean competitor. As a result, clients with leading battery materials may be sought after by Chinese leading battery suppliers.
Panasonic’s lithium-ion (Li-ion) battery division is resurgent: In Q2 2013, it
made about $40 million in profits, a turnaround from one year before, when it lost $20 million in Q2 2012. As a result, Panasonic will invest $200 million over the next year to expand its Li-ion production lines in Osaka and Kasai, making batteries destined for automotive applications.
The company’s improved Li-ion fortunes coincide with its customer Tesla Motors beginning to ship the Model S, an electric vehicle (EV) that packs a massive 60 kWh to 85 kWh worth of batteries. About 16,000 Model S units have been sold thus far, accounting for more than $400 million in revenues for Panasonic. Moreover, Panasonic has become the leading battery supplier for plug-ins and hybrids sold in the U.S. Its market share by capacity sold has increased to 54% during the last year, overtaking LG Chem and Nissan’s AESC in the process. This breakthrough has been four years in the making and involved Panasonic investing $30 million in Tesla in 2010.
Remarkably, the upstart Tesla now drives more of Panasonic’s battery revenues in the U.S. than the world’s largest automakers, like Toyota and Volkswagen. A mere 20,000 Tesla Model S units use three times more battery capacity than the U.S. sales of Toyota’s popular Prius hybrid family (which moved about 230,000 units during the past year). Tesla’s battery demand now outweighs all other OEMs in the U.S., taking 49% of the market share for battery capacity shipped in the U.S. plug-in and hybrid market in Q2 2013. Others are taking notice of Tesla’s increased clout: Samsung SDI, BYD, and LG Chem have reportedly been in talks with the automaker, seeking to supplement or displace
Panasonic. However, they may have to wait for Tesla’s next model, because Tesla could find it difficult to mix cells from different suppliers, due to battery management system considerations, and because the Panasonic-Tesla contract stipulates supplying 80,000 vehicles by 2015. Interested parties should now expect increased development and more pricing pressure for the Panasonic-Tesla battery solution, including more research on 18650 automotive cells and a strengthening nickel cobalt aluminum (NCA) cathode value chain.