Home > Stable market outlook for lithium batteries; automotive a big opportunity

Stable market outlook for lithium batteries; automotive a big opportunity

article image Priority amongst lithium battery makers is shifting to applications related to electric automotives

THE market for lithium battery cells remains stable in the long term, even though there were price fluctuations in the last quarter of 2014.

According to TrendForce research division EnergyTrend, the first half of 2014 saw an increased demand for lithium batteries due to the re-emergence of power banks for tablets and smartphones.

The second half of 2014 saw improved demand for prismatic laptop batteries as well as popular large-screen tablet devices, driven mostly by Apple. Cylindrical lithium batteries retained relatively constant pricing, while the prices for polymer and prismatic cells fell towards the end of 2014.

However, the outlook for battery prices in 2015 is stable, with little fluctuation predicted for 2015.

EnergyTrend predicts that cylindrical cell production will continue to decline, as priority amongst lithium battery makers shift to applications related to electric automotives. Battery makers will predominantly seek to find a balance between electric car and consumer products as to avoid overproduction and to retain their gross margin performance.

Quality remains an issue for polymer cells. The resulting impact on throughput meant that supply of smartphones batteries fell behind schedule in the fourth quarter of 2014. This caused a chain reaction that led to demand exceeding supply for the first-tier manufacturers.

The price of polymer cells will continue its downward trend, due to the competition caused by China’s subsidy policy and expanding production.

Additionally, as smartphones become bigger and tablets become smaller, both classes of devices are moving towards sharing the same battery capacity, with the result being greater battery interchangeability, reducing demand for a variety of polymer cells.

In contrast, the steady demand for electric car batteries encourages the growth of cylindrical cell production, hedging the prices against decline. This rise in the automotive sector is offset by the shrinking demand for cylindrical cells in IT, but the result is greater demand for high capacity cells.

The price for prismatic cells so far has been volatile because these cells are at the start of mass production. EngergyTrend forecasts that prismatic cell price will stabilise when the market reaches equilibrium in supply and demand.

Newsletter sign-up

The latest products and news delivered to your inbox