Too many batteries, not enough sales could be a big plug-in problem

As companies rush into the plug-in hybrid and electric car space, they've created capactity that far outmatches actual demand. Partnerships, consolidations and losers are coming.

A plug-in battery bubble is primed to burst

Significant amount of losers to be shaken out of battery industry

For years now a number of battery studies have suggested that the battery industry will eventually hit a time of serious over-production, as newcomers and established players race to battery-powered dominance, but overshoot market needs. The result, claim the forecasts, could be a glut of batteries, industry consolidation, and a lot of bankruptcies.

Lux Research is the latest to address this issue claiming that a “severe mismatch” is building between battery supplies and actual demand.

According to Lux, even $200 oil wouldn’t be enough to address the over-capacity that is now building.

So, which companies are shaping up to be winners and losers? According to Lux, LG Chem, SB LiMotive, and Chinese makers China BAK, China Aviation Lithium Battery (CALB), and BYD are in the best shape so far. On the other hand, A123 Systems, Ener1, International Battery, K2 Energy Solutions, Valence Technology, Leyden Energy, Electrovaya, and Altair Nanotechnologies face a more difficult future.

In order to address this over-supply, Lux recommends that battery makers develop new business opportunities for their batteries beyond just plug-in vehicles, such as for use in hybrid cars, electric bikes and the power grid.

While some might believe that a vast over-supply would be good for plug-in buyers, AutoblogGreen speculates that a massive over-supply could put the battery industry in such a fragile state that real battery cost-reductions will ultimately be delayed.

Source: NYTimes via AutoblogGreen

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