Fierce Battle Rages to Supply Electric Vehicles - 06 January 2010
From being a niche product only a few years ago, many people now view electric vehicles as the future (or even the saviour!) of the automotive industry. Numerous vehicle manufacturers already offer hybrid electric vehicles and many have plans to introduce battery electric vehicles. Governments around the world are investing money to support development efforts. As a result, a fierce battle is raging as suppliers fight for a piece of the action.
A recent report* from IMS Research finds that it isn’t just traditional Tier 1 automotive suppliers that are involved in this market. Many other companies are active in the supply chain. For example, Valence Technologies, A123 Systems and LG Chem all have agreements to supply lithium ion batteries for major electric vehicle programmes. AC Propulsion and UQM Technologies both offer traction motors.
This isn’t to say that the traditional Tier 1 suppliers aren’t involved in the market. Continental, for example, supplies both lithium ion batteries and traction motors as well as a range of other systems used in electric vehicles like DC/DC converters and inverters. It seems that Tier 1 suppliers like Continental are positioning themselves as “one-stop shops”. In other words, suppliers that can offer complete electric vehicle powertrain solutions.
According to report author, Jon Cropley, “The supply chain will change greatly in the future. Vehicle manufacturers have the option of sourcing electric vehicle powertrain systems from a single supplier or from a number of suppliers. They also have the option of developing their own systems or even acquiring companies that already make them. This is a market in an early stage of growth. We should expect big changes”.
A number of findings from the report underline just how immature the market is. For instance, less than 1 million hybrid electric vehicles were produced in 2009 and this equates to only around 2% of all vehicle production worldwide. Less than 5,000 plug-in hybrids and battery electric vehicles were produced in the same year.
Despite this, significant growth in production volumes is expected. IMS Research forecasts that over 12 million electric vehicles (either hybrids, plug-in hybrids, battery electric or fuel cell vehicles) will be produced in 2020. This offers a substantial opportunity for the companies supplying systems and semiconductors for these vehicles.
Notes for Editors
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* Findings from the report “Opportunities for System and Semiconductor Manufacturers in Hybrid and Battery Electric Vehicles – 2010 Edition”.
About IMS Research
IMS Research is a supplier of market research and consultancy services on a wide range of global electronics markets. The company is supported by headquarters in Wellingborough, UK and offices in Austin, Texas and Shanghai, China. IMS Research regularly publishes detailed research on automotive markets, among others.
