The electronics maker being acquired by Panasonic Corp. is accelerating development of lithium-ion batteries for plug-in hybrid cars in anticipation of growth in demand for low-emission cars. The company estimates global sales of hybrid cars using lithium-ion cells including plug-in models will grow to 2.3 million units by 2015 and 10.2 million by 2020.
"Lithium-ion batteries used in cars are likely to be the winners in a high growth market and that’s why Sanyo has made it the centerpiece of its business strategy," said Nobuo Kurahashi, an analyst at Mizuho Investors Securities Co. in Tokyo. "Any agreement like this is a very positive development."
Most hybrid cars currently use nickel-metal hydride batteries and automakers are shifting to develop plug-in models and electric cars that use lithium-ion cells that are lighter and more powerful although they cost more.
Sanyo fell 1.3 percent to close at 157 yen on the Tokyo Stock Exchange, extending its decline this year to 5.4 percent. The benchmark Nikkei 225 Stock Average added 0.4 percent today.
Toyota Motor Corp., the maker of the world’s most popular hybrid vehicle, Prius, plans to build a plug-in model for retail buyers in 2012. General Motors Co. plans to build as many as 60,000 Chevrolet Volt plug-in electric cars annually starting in November 2010.
Sanyo will supply lithium-ion batteries for Toyota’s plug- in hybrid vehicles, the Asahi newspaper reported on Oct. 21, without saying where it got the information. Toyota spokesman Hideaki Homma today declined to confirm or deny that Sanyo will be its supplier.
Global lithium-ion battery sales will likely grow to $23 billion in 2020, fueled by demand for batteries used in electric cars and hybrid vehicles, Daiwa Institute of Research Ltd. estimated in January. Lithium-ion cells will likely overtake nickel-hydride batteries in the car-use market around 2014, the researcher said.
"Lithium-ion batteries are big business," because their cost currently makes up about 2 million yen or almost half the price of electric cars sold in Japan, according to Takeshi Miyao, a Tokyo-based supply-chain analyst for auto consultant Carnorama. While battery power and costs will be lower for hybrid cars, "securing a customer now may lead to future deals with affiliated brands," he said.
Plug-in hybrids will be among models to drive growth of low-emission cars in the coming years until new technologies for batteries, motors and charging stations are developed for vehicles fully powered by electricity, Honma said. "About 80 to 90 percent of environment-friendly cars in 2020 will probably be either plug-in or hybrids."
Sanyo will probably be able to make 300,000 to 400,000 of those cells per month when it starts production as early as 2011 at its new plant being built in Kasai, Hyogo prefecture, western Japan, Honma said in October.
The company’s factory in Tokushima prefecture, southwestern Japan, makes lithium-ion batteries exclusively for Volkswagen AG, Europe’s largest automaker.
Last month, Sanyo said it will supply nickel-metal hydride batteries for PSA Peugeot Citroen Group’s hybrid cars from 2011. Sanyo already provides batteries for Honda Motor Co. and Ford Motor Co. for their hybrids.
The battery maker plans to build factories in Europe, China and the U.S. as early as 2012 to start making car-battery modules, Honma said at a briefing in October.
The average cost of lithium-ion cells used in electric and hybrid cars will likely drop by half by 2014, research firm Fuji Keizai Group said Nov. 6. Technical advances and mass production can lower the cost to boost the global lithium-ion car battery market to 2.25 trillion yen in 2014 from 25 billion yen this year, according to the researcher.
Nissan Motor Co. Chief Executive Officer Carlos Ghosn said in August electric cars will comprise at least 10 percent of global demand by 2020, assuming oil costs more than $70 a barrel. Nissan plans to start selling its Leaf electric car next year.
Sony Corp. is in talks to supply "several companies" with lithium-ion car batteries, Executive Deputy President Hiroshi Yoshioka told reporters last week, declining to identify the potential customers. Yoshioka on Nov. 19 said Sony plans to spend 100 billion yen researching and developing rechargeable batteries, including for electric cars.
"It’s only natural that Sony plans to enter this market given its high growth potential," Honma said. "With or without Sony, the competition in this market will intensify both in terms of technology and prices."