Batteries Market

US demand to rise 4.8% annually through 2015

US sales of primary and secondary batteries are expected to rise 4.8 percent annually to $16.7 billion in 2015. Gains will be driven by healthy demand for replacement batteries in numerous electronic devices and a shift in the product mix toward more expensive, better-performing batteries. Furthermore, following some short-term weakness, a strong rebound in motor vehicle production and an improved outlook for fixed investment will bolster consumption of batteries in the motor vehicle and industrial markets. Growth in the rapidly expanding hybrid and electric vehicle market will also provide new sales opportunities. On the other hand, a moderation in prices after a period of strong increase will constrain value gains to some extent. Design improvements that contribute to longer life spans, thus reducing the frequency of replacement, will also limit future growth.

Alkaline batteries to remain dominant primary type

Demand for primary batteries is forecast to advance 3.1 percent per year to $5.4 billion in 2015. The growing popularity of battery-powered portable devices will spur strong replacement demand for these batteries. Furthermore, increased use of more powerful and expensive batteries will support value gains. Alkaline batteries will remain the most prevalent type of primary battery, accounting for over 70 percent of demand. However, sales of other battery chemistries, most notably primary lithium, are expected to register stronger advances through 2015. Consumer applications will continue to represent about two-thirds of all primary battery demand in 2015. The aging of the population will also benefit supplies of both consumer hearing aid batteries and primary lithium batteries for implantable medical devices, as the number of people 65 years of age and older tend to be the primary users of these products.

Secondary batteries to outpace primary types

The US market for secondary batteries is projected to climb 5.7 percent annually to $11.3 billion in 2015. Market gains will be bolstered by increasing usage of highdrain electronic products, which supports sales of more powerful, expensive batteries. However, market advances will be constrained by a number of factors, including a moderation in lead-acid battery prices after a period of healthy gains. Demand for lithium-ion (Li-Ion) batteries will be fueled by rapid growth in the production of hybrid and electric vehicles, which will utilize these batteries as a power source. Although lead-acid batteries will continue to account for more than 62 percent of secondary battery demand in 2015, sales of lithiumbased rechargeable batteries, which are widely used in both portable devices and hybrid vehicles, will record the strongest increases.

US trade deficit in batteries to widen through 2015

Shipments of batteries from US facilities are expected to advance at a 4.8 percent annual pace to $13.0 billion in 2015. Growth will be supported by the rising popularity of hybrid and electric vehicles, which will encourage domestic suppliers to dramatically boost production of Li-Ion batteries. However, gains will be limited by the strong leadership positions of foreign suppliers, which dominate the output of many advanced battery types. As a result, the US trade deficit in batteries is forecast to widen further through 2015.

Study coverage

Details on these and other findings are contained in a new industry study, which presents historical demand data for the years 2000, 2005 and 2010, plus forecasts for 2015 and 2020 by product and market. The study also considers market environment factors, examines industry structure, assesses company market share and profiles 35 US industry competitors.

Battery Industry in the United States

TABLE OF CONTENTS

INTRODUCTION XI

I. EXECUTIVE SUMMARY 1

II. MARKET ENVIRONMENT 4

General 4
Economic Environment 5
Cyclical Trends 9
Long-Term Trends 12
Fixed Investment Outlook 13
Personal Income & Expenditure Outlook 16
Government Spending & Investment Outlook 19
Durable Goods Manufacturing Outlook 20
Motor Vehicle Outlook 22
Electrical & Electronic Sector Outlook 26
Legal & Regulatory Environment 28
Recycling 31

III. TECHNOLOGY 34

General 34
Basic Electrical Properties 35
Battery Construction & Operation 37
Conventional Battery Chemistries 39
Alkaline 40
Zinc-Carbon/Zinc-Chloride 40
Lead-Acid 41
Nickel-Cadmium 42
Others 42
Advanced Battery Chemistries 43
Lithium 44
Nickel-Metal Hydride 47
Zinc-Air 48
Sodium Metal Halide 49
Other 50
Wireless Communications & Portable Computing 51
Hybrid/Electric Vehicles 53
Fuel Cells & Other Alternative Sources of Power 58
Fuel Cells 59
Other Sources of Power 61
Motor Vehicle Electrical Trends 64
Smart Batteries 65

IV. OVERVIEW 68

General 68
Pricing Patterns 70
International Environment 74
World Outlook 75
Foreign Trade 79
Primary Batteries 80
Secondary Batteries 83

V. PRIMARY BATTERY PRODUCTS 87

General 87
Alkaline Batteries 90
Primary Lithium 93
Other Primary Batteries 96
Zinc-Air 98
Zinc-Carbon/Zinc-Chloride 100
Silver Oxide 102
Specialty & Other Primary Batteries 104

VI. PRIMARY BATTERY MARKETS 107

General 107
Consumer Market 110
Entertainment 113
Lighting 113
Toys & Games 114
Photography 115
Other Consumer Markets 116
Industrial Market 117
Government Market 120
Other Primary Battery Markets 122

VII. SECONDARY BATTERY PRODUCTS 125

General 125
Lead-Acid Batteries 128
Starting/Lighting/Ignition 130
Non-SLI 132
Motive Power 134
Stationary & Other Types 135
Rechargeable Lithium Batteries 136
Lithium Ion 139
Lithium Polymer 142
Nickel-Metal Hydride Batteries 144
Nickel-Cadmium Batteries 147
Other Secondary Batteries 150
Sodium-Metal Halide 151
Rechargeable Zinc-Air 152
Nickel-Hydrogen 152
Sodium-Sulfur 153
Exotic & All Other 154

VIII. SECONDARY BATTERY MARKETS 156

General 156
Motor Vehicle Market 159
Conventional OEM 161
Conventional Replacement 163
Hybrid-Electric Vehicles 164
Portable Device Market 168
Portable Computers 171
Personal Communication Devices 173
Power Tools 175
Other Portable Devices 176
Motive Power Market 178
Industrial & Mining Vehicles 180
Recreational & Personal Mobility Vehicles 182
Other Motive Power 183
Backup Power Supply Market 184
Industrial 186
Telecommunications 187
Utility-Related 188
Government & Other Secondary Battery Markets 190
Government 192
Mowers, Tractors & Industrial Trucks 193
Marine 194
Motorcycles 195
All Other 195

IX. INDUSTRY STRUCTURE 197

General 197
Industry Composition 198
Market Share 201
Primary Batteries 202
Lead-Acid Secondary Batteries 204
Non-Lead-Acid Secondary Batteries 205
Research & Product Development 206
Manufacturing 209
Marketing 211
Cooperative Agreements 213
Distribution 221
Financial Requirements 222
Mergers, Acquisitions & Industry Restructuring 224
Company Profiles 227
A123 Systems Incorporated 228
ABSL Power Solutions, see EnerSys
Acme Aerospace, see TransDigm Group
American Power Conversion, see Schneider Electric
ASB Group, see Saft Groupe
BYD Company Limited 231
C&D Technologies Incorporated 233
Cobasys, see Samsung SDI
Compact Power, see LG Chem
Crown Battery Manufacturing Company 236
Douglas Battery Manufacturing Company 238
Duracell, see Procter & Gamble
East Penn Manufacturing Company Incorporated 239
Electrochem Solutions, see Greatbatch
Ener1 Incorporated 243
EnerDel, see Ener1
Energizer Holdings Incorporated 246
Energy Conversion Devices Incorporated 249
EnerSys 251
Enertech International, see Ener1
Ener-Tek International Incorporated 255
Exide Technologies 257
Florida Substrate, see Saft Groupe
GE Transportation, see General Electric
General Electric Company 263
GNB Industrial Power, see Exide Technologies
GP Batteries International Limited 264
Greatbatch Incorporated 267
GS Yuasa Corporation 270
Hitachi Limited 273
Johnson Controls Incorporated 275
KCM Marketing, see East Penn Manufacturing
LG Chem Limited 279
MarathonNorco Aerospace, see TransDigm Group
Maxell of America, see Hitachi
Modular Energy Devices, see EnerSys
Ovonic Battery, see Energy Conversion Devices
Panasonic Corporation 283
Power-Sonic Corporation 288
Primearth EV Energy, see Panasonic and Toyota Motor
Procter & Gamble Company 290
Renata, see Swatch Group
Saft Groupe SA 294
Samsung SDI Company Limited 300
SANYO Electric, see Panasonic
SB LiMotive, see Samsung SDI
Schneider Electric SA 303
Sony Corporation 305
Spectrum Brands Holdings Incorporated 308
Swatch Group Limited 310
Tadiran US Battery, see Saft Groupe
Toshiba Corporation 312
Toyota Motor Corporation 314
TransDigm Group Incorporated 316
Trojan Battery Company 317
Ultralife Corporation 319
US Battery Manufacturing Company 322
Valence Technology Incorporated 323
Yardney Technical Products, see Ener-Tek International
Yuasa Battery, see GS Yuasa
Other Companies Mentioned in Study 325

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY

Summary Table 3

SECTION II -- MARKET ENVIRONMENT

1 Macroeconomic Indicators 9
2 Battery Market, 2000-2010 11
3 Nonresidential Fixed Investment Expenditures 16
4 Personal Consumption Expenditures 19
5 Government Spending & Investment Trends 20
6 Durable Goods Shipments 21
7 Motor Vehicle Indicators 25
8 Electrical & Electronic Equipment Shipments 28

SECTION III -- TECHNOLOGY

1 Wireless Communications & Portable Computing Device
Demand 53
2 Hybrid/Electric Vehicle Market Trends 58
3 Selected Alternative Power Product Demand 59
4 Smart Battery Demand 67

SECTION IV -- OVERVIEW

1 Battery Supply & Demand 70
2 Battery Pricing Patterns 73
3 World Battery Demand 78
4 US Battery Foreign Trade 80
5 US Primary Battery Foreign Trade 82
6 US Secondary Battery Foreign Trade 85

SECTION V -- PRIMARY BATTERY PRODUCTS

1 Primary Battery Supply & Demand 89
2 Alkaline Battery Supply & Demand 92
3 Primary Lithium Battery Supply & Demand 96
4 Other Primary Battery Supply & Demand 98
5 Zinc-Air Battery Demand 100
6 Zinc-Carbon/Zinc-Chloride Battery Demand 102
7 Silver Oxide Battery Demand 104
8 Specialty & Other Primary Battery Demand 106

SECTION VI -- PRIMARY BATTERY MARKETS

1 Primary Battery Demand by Market 109
2 Consumer Primary Battery Market 112
3 Industrial Primary Battery Market 119
4 Government Primary Battery Market 122
5 Other Primary Battery Markets 124

SECTION VII -- SECONDARY BATTERY PRODUCTS

1 Secondary Battery Supply & Demand 127
2 Lead-Acid Battery Supply & Demand 130
3 Starting/Lighting/Ignition Battery Demand 132
4 Non-SLI Lead-Acid Battery Demand 133
5 Rechargeable Lithium Battery Supply & Demand 139
6 Nickel-Metal Hydride Battery Supply & Demand 147
7 Nickel-Cadmium Battery Supply & Demand 149
8 Other Secondary Battery Supply & Demand 151

SECTION VIII -- SECONDARY BATTERY MARKETS

1 Secondary Battery Demand by Market 158
2 Motor Vehicle Battery Market 161
3 Conventional OEM Battery Market 162
4 Conventional Replacement Motor Vehicle Battery Market 164
5 Hybrid/Electric Vehicle Battery Market 168
6 Portable Device Secondary Battery Market 171
7 Portable Computers Battery Demand 173
8 Personal Communication Device Battery Demand 174
9 Power Tool Battery Demand 176
10 Other Portable Devices Battery Demand 178
11 Motive Power Secondary Battery Market 180
12 Backup Power Supply Secondary Battery Market 186
13 Government & Other Secondary Battery Markets 192

SECTION IX -- INDUSTRY STRUCTURE

1 US Battery Sales by Manufacturer, 2010 200
2 Research & Development Spending Patterns: Selected Battery
Manufacturers 209
3 Capital Spending Patterns: Selected Battery Manufacturers 211
4 Selected Cooperative Agreements 215
5 Composite Financial Ratios: Selected Battery Manufacturers 224
6 Selected Acquisitions & Divestitures 226

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT
1 Battery Market Trends, 2000-2010 12
SECTION III -- TECHNOLOGY
1 Basic Battery Construction 38
SECTION IV -- OVERVIEW
1 Selected Battery Price Deflators, 2000-2020 74
2 World Battery Demand by Region, 2010 78
3 US Primary Battery Imports by Source, 2010 82
4 US Primary Battery Exports by Destination, 2010 83
5 US Secondary Battery Imports by Source, 2010 85
6 US Secondary Battery Exports by Destination, 2010 86
SECTION V -- PRIMARY BATTERY PRODUCTS
1 Primary Battery Demand by Chemistry, 2010 90
SECTION VI -- PRIMARY BATTERY MARKETS
1 Primary Battery Demand by Market, 2010 110
SECTION VII -- SECONDARY BATTERY PRODUCTS
1 Secondary Battery Demand by Chemistry, 2010 128
SECTION VIII -- SECONDARY BATTERY MARKETS
1 Secondary Battery Demand by Market, 2010 159
SECTION IX -- INDUSTRY STRUCTURE
1 US Battery Market Share, 2010 202
2 US Primary Battery Market Share, 2010 204
3 US Lead-Acid Secondary Battery Market Share, 2010 205
4 US Non-Lead-Acid Secondary Battery Market Share, 2010 206