Industrial applications represent substantial, untapped growth potential for lithium-ion batteries. The increasing need for cordless tools, data communication equipment and energy storage applications for renewable power promote greater demand for lithium-ion batteries. New analysis from Frost & Sullivan’s European Lithium-ion Battery Market for Industrial Applications research finds the market earned revenue of $748.2 million in 2012 and estimates this to reach $1.64 billion in 2017. The analysis covers the use of lithium-ion batteries in six key applications: industrial tools, medical devices, aerospace and defense, data collection, energy storage, and telecom and data communication.
“High energy density, light-weight, improved performance and long life-cycle are the key factors that motivate the use of lithium-ion batteries in industrial applications,” said Frost & Sullivan Energy and Environment Industry Manager Suba Arunkumar. “Such inherent advantages highlight their appeal, despite higher costs.”
These features are also underlining the potential for lithium-ion batteries in energy storage applications. In 2012, back-up applications accounted for the majority of revenue. However, the contribution of residential and community energy storage systems is likely to pick up significantly after 2015.
“Incentives to promote renewable energy is driving market growth by increasing the need for self-consumption of the energy generated,” said Arunkumar. “This will lead to heightened demand for lithium-ion batteries.”
A key challenge for market participants is to address the high initial price, which could impede mass adoption in stationary applications.
“Owing to low unit shipments and it being a relatively new market, lithium-ion batteries are a little more expensive than existing, established chemistries like lead acid, nickel cadmium and nickel metal hydride,” explained Arunkumar. “On reaching mass commercial volume, similar to consumer applications, the price of these batteries is expected to fall, pushing usage levels.”