An Overview of the Battery Industry in 2015

As Mighty Max Battery has a primary focus on offering the absolute highest quality batteries and battery accessories, it is important that we are aware of all the intricate details related to batteries and the 2015 battery industry. We believe it is important for our community to be informed and, therefore, provide this easily digested analysis of the US battery market. The information within this analysis can be beneficial to individuals or organizations that have an interest in the current state of energy storage solutions.

If, during past few months, the word "battery" had come across your direct or peripheral vision as part of a headline to an article, much like this one, it was probably related to lithium batteries. These are the types of batteries being used to power the revolution we appear to be witnessing in automotive transportation. Thanks to the incredible marketing and public relations department at Tesla, led by the talented Elon Musk, the world of batteries and energy storage has become a hot topic. First it was battery powered cars and now we have battery powered homes and businesses. Tesla is not alone in this game; they are competing with GM, Ford, Nissan, and even Mercedes. Lithium is the word most often used in this part of the energy storage game.

As of 2014, China has had the 2nd largest amount of lithium reserves in the world.

Statistic: Countries with the largest lithium reserves worldwide as of 2014 | Statista

Exciting the evolution of lithium batteries may be, there are questions that aren't really being asked on a level that reflects their importance. Here are 3 of the big ones:

  • As with fossil fuels, are the ingredients used to create these batteries, e.g., lithium and graphite, limited and what are the amounts available?
  • Where do these resources come from and what are the extraction methods and costs?
  • What are the safety concerns with these giant batteries when there have been issues with tiny batteries in phones and laptops catching fire?

"No one wants a battery issue in their house."
-David Petersen, Vecture

The chart above from Statista shows us that as of 2014, China had the 2nd largest amount of lithium reserves in the world. Chile had more than double that of China. David Petersen, vice president of Vecture, a leading design and manufacturing company for battery management systems, discusses the safety concerns and brings up several other important points in a recent article by Shawn Wasserman. Materials extraction is a much more complex set of questions, but manufacturing appears to be on the rise.

According to a leading research firm, US battery manufacturing in general is a $12B industry and lithium battery manufacturing in the US is a $3B industry. So, what are the other types of batteries that make up 75% of the US battery manufacturing market? Well, there are over 50 other types of batteries that exist. There’s a Wikipedia page dedicated to battery types and the list is daunting. And while overall battery manufacturing in the US has grown 1.7% annually over the past five years, US lithium battery manufacturing has seen an impressive 16.4% annual growth in the same time period. While these are impressive numbers on their own and comparatively, the numbers are somewhat dwarfed when considering the data from China, which has a staggering $128B overall battery manufacturing market that has seen 10.5% annual growth over the past five years. Their lithium battery production is expected to surge 400% by 2017 according to market research firm CCM.

US vs China in Battery Revenues

US vs China in Battery Revenues ($ in Billions)

There is an obvious gap in the battery manufacturing prowess between the US and China. There are many reasons for this, including the continuous loss of job opportunities in the US due to the cost of labor as well as technical and expensive barriers to entry related to the materials, science, and required machinery. While there is effort being invested into the simplification and cost-effectiveness of battery production, such as that by Yet-Ming Chiang of 24M, a lithium battery company, the issue of labor cost is even more complicated. For labor we must consider cost of life, required education levels, and the role of automation. These are real and serious subjects that this article can’t even begin to tackle.

Gently and ever so respectfully, we are segueing back to batteries. This part of the analysis discusses the various uses the drives battery production and sales. As mobile storage units, batteries power small items, such as watches, phones, and toys, and range up to power gigantic electronics systems such as those on trucks, ships, and planes. One of the ubiquitously used type of batteries for automobiles are sealed lead acid (SLA) batteries. These SLA batteries are the ones that have been traditionally used to power the electrical systems in cars, trucks, motorcycles, ATVs, scooters, and other transportation vehicles. They are also used in uninterruptible power supplies (UPS), used as back-up power for computer environments, and for solar panel power storage solutions.

Solar is an important driver in the current battery industry

Mighty Max Battery

Solar energy has been another hot topic over the past several years. As the technology to convert the sun’s rays into electricity becomes better and cheaper, solar energy solutions become more viable. The primary driver behind the rise in solar has been a desire to decrease our dependency on power sources that are believed to be harmful to the environment, mainly gas and coal. Unfortunate as it may be for our appliances, the sun doesn’t shine all the time. This is why solar panels require a secondary energy solution; to provide energy when sunlight is not available. Some solar panels are connected to the local energy grid, which is well equipped to handle energy needs, but requires an endless cost for its services. Others are attached to rechargeable batteries, which have a varying lifespan of approximately five to fifteen years and don’t require much of an investment after initial purchase. This is becoming a very popular option in Hawaii, where grid-based energy costs are expensive due to their need to import fuel sources.

While the world crosses its fingers for the increase in efficiency and power promised by lithium-ion batteries, which will also lengthen the duration our cellphones can function without a charge, reduce our dependency on fossil fuels and resulting carbon emissions, and allow us to harness the sun’s energy at night, we will continue to utilize the best possible energy storage option for all of our needs. This includes alkaline, nickel-cadmium, and of course SLA batteries.