Auto Electronics

Strategy Analytics report predicts battery electric car growth

New investment activity could create annual demand for three million battery electric cars, generating over $1.1 billion of new semiconductor demand, according to a Strategy Analytics report, “Battery Electric Vehicles: Will New Activity Drive Market Out Of Niche?

Without new breakthroughs in business models and technology, however, the demand for battery electric cars will amount to fewer than 500,000 units a year by 2015. Kevin Mak, industry analyst in Strategy Analytics’ Automotive Electronics Service and author of the report, said electric vehicle market growth is driven in part by increasingly onerous mandates on fleet fuel economy and on carbon dioxide emissions, as well as consumer demand for more environmentally compatible vehicles.

“Although electrified powertrains in general are seen as an answer, battery electric vehicle technology is currently flawed. Problems – such as high cost, short range, and slow recharge – have held back mainstream consumer adoption. New battery technologies aim to address many of these problems, but the high cost and uncertain longevity of batteries will remain a barrier,” Mak said.

He added that initiatives such as Project Better Place, the Silicon Valley company that promotes electric vehicle use, encourage new business models to overcome consumer apprehension. “Projects developing recharging infrastructures, battery replacements and pay-per-mile usage are just some of the development proposals considered at this time.

“Better battery technology will not be enough to propel the electric vehicle into the mainstream within the next five years. Investment in re-charging and battery-swap infrastructure will be required to make electric vehicles anything other than a niche solution,” Mak said.

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