The hybridization of America's auto fleet once threatened to
make lead-acid batteries obsolete, but analysts now believe the
veteran technology will serve as a workhorse for battery makers
to piggyback the evolving hybrid market on.
"The transition has already begun, because there's more than
a million hybrid vehicles on the road today. While those
vehicles might not be economical today, there's improving
visibility on costs becoming more economic in the future as
different subsystems come down in cost," said Craig Irwin,
senior vice president of equity research for clean technology
in Wedbush Securities' New York office.
While hybrids will dominate new car sales in years to come,
analysts differ on how quickly they will penetrate the on-road
UBS Securities LLC auto analyst Colin Langan takes a
conservative view, pointing out that hybrids represent 2 to 3
percent of the 250 million vehicles on the road today. "From a
cost perspective, hybrids are still not there and it's probably
going to be a long path," he said.
In contrast, Boston Consulting Group Inc. sees the global
auto market taking a decided turn toward hybridization during
the next decade. "We anticipate that the approximately 14
million electric cars forecast to be sold in 2020 in China,
Japan, the United States and Western Europe will comprise some
1.5 million fully electric cars, 1.5 million range extenders
and 11 million hybrids. In the same year, the market for
electric-car batteries in those regions will be worth some $25
billion," analysts at the Boston-based company said.
That view was echoed by Deutsche Bank, where analysts peg
hybrid penetration at 17 percent by 2020. But even at that rate
of hybridization, conventional vehicles and their large
lead-acid batteries will still rule the road.
Behind the push are international emission control
regulations, which original equipment manufacturers (OEMs) must
either comply with or face tough penalties.
The quickest and cheapest way to meet the standards is to
downsize or introduce smaller vehicles that simply use less gas
and thus emit fewer emissions, an approach already taken by
Ford Motor Co., Dearborn, Mich. The automaker has focused on
bringing smaller cars into the market.
The second strategy has been to phase in fleet-wide
integration of stop-start technology. In a bid to appeal to
environmentally conscious consumers, automakers have branded
all "stop-start" vehicles the micro-hybrid, with micro
referring to the level of hybridization rather than vehicle
size. A micro-hybrid is just a conventional combustion engine
programmed to turn off when the vehicle stops, Langan
Lead-acid battery makers are embracing micro-hybrids as
their ticket into the world of hybrids through advanced
lead-acid battery technology like lead-carbon and advanced
absorbent glass mat (AGM) batteries.
Irwin singled out lead-acid technology as the most promising
in this segment as it resolves the sulfur buildup suffered by
traditional batteries by replacing the negative lead electrode
with one made of carbon. While the small adjustment means that
battery makers don't need to alter their production lines, it
increases the number and speed of charge cycles and extends
battery life for consumers. "You can charge it and discharge it
violently and it has much greater tolerances than other flavors
of lead-acid batteries," he said.
Lead-acid batteries have eked out a more basic role in
hybrid cars. While a lead-acid battery proved unfit to power
the electric drivetrains of the high-technology vehicles, the
veteran workhorse is well suited to running the accessories and
creature comforts that drivers have become accustomed to. From
basic functions like headlights, windshield wipers and electric
windows to luxuries like heated seats and navigation systems,
the modest 12-volt battery keeps everything humming.
"I'm not aware of any single hybrid vehicle that eliminates
the lead-acid battery," Irwin said.
The lead-acid batteries in some hybrids are smaller than the
standard auto battery, but that's not the case for higher-end
hybrids like the Mercedes S400, whose lead-acid battery is the
same size as the battery in its gasoline-burning cousin, the
S550 luxury sedan. It also occupies the same location in the
car's trunk, pointing to another reason for lead-acid's staying
power: standardization. Since auto interiors are mass made and
electric systems are wired for standard volt requirements, it
makes sense to keep the lead-acid battery instead of radically
altering the vehicle's design.
This multi-battery design may be a good model for how
battery makers should approach the future, as opportunities to
diversify into new technologies and benefit from past
Boston Consulting Group sees great synergies for OEMs
teaming with battery makers. "Such relationships give the OEM
exclusive access to the know-how, technology and production
capacity of the cell manufacturer and allow the OEM to
differentiate its vehicles in terms of a chosen battery
technology," company analysts said.
They believe that exclusive partnerships-like the one Toyota
forged with Panasonic Corp. to bring its nickel-metal hydride
Prius battery to the market-likely will dominate in the medium
term. But as the new technologies mature and become
commodified, industry participants likely will return to more
The alternative model is for battery makers to join forces
in the development of new chemistries, such as the partnership
that Johnson Controls Inc., Milwaukee, has forged with France's
Saft SA to manufacture lithium-ion batteries, or New Castle,
Pa.-based Axion Power International Inc.'s partnership with
Exide Technologies in Alpharetta, Ga., to develop advanced