IMS Research reports on battle to supply electric vehicles

Tier one suppliers, lithium ion battery makers, and manufacturers of traction motors are among the firms battling for a foothold in the electric vehicle market, according to a new report from IMS Research.

Jon Cropley, author of the report, notes that electric vehicles were a niche product a few years ago and now are considered by many to be the future if not the savior of the automotive industry. Numerous vehicle manufacturers already offer hybrid electric vehicles, and many have plans to introduce battery electric vehicles. Governments around the world are investing money to support development efforts, and  in Cropley’s view a fierce battle is raging as suppliers fight for a piece of the action.

Valence Technologies, A123 Systems, and LG Chem all have agreements to supply lithium ion batteries for major electric vehicle programs. AC Propulsion and UQM Technologies both offer traction motors. Continental supplies both lithium ion batteries and traction motors as well as a range of other systems used in electric vehicles, like DC/DC converters and inverters.

“It seems that Tier 1 suppliers like Continental are positioning themselves as ‘one-stop shops’ that can offer complete electric vehicle powertrain solutions,” Cropley suggests. “The supply chain will change greatly in the future. Vehicle manufacturers have the option of sourcing electric vehicle powertrain systems from a single supplier or from a number of suppliers. They also have the option of developing their own systems or even acquiring companies that already make them. This is a market in an early stage of growth. We should expect big changes”.

Cropley estimates that fewer than one million hybrid electric vehicles were produced in 2009, which equates to around 2% of all vehicle production worldwide. Less than 5,000 plug-in hybrids and battery electric vehicles were produced in the same year. Despite this, significant growth in production volumes is expected. IMS Research forecasts that over 12 million electric vehicles (either hybrids, plug-in hybrids, battery electric or fuel cell vehicles) will be produced in 2020. This offers a substantial opportunity for the companies supplying systems and semiconductors for these vehicles.

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