Sunday, August 29, 2010

Lithium Battery price war will bring us mass market in Electric Cars. TNR.v, CZX.v, RM.v, TSLA, LIT, LIT.v, LI.v, WLC.v, CLQ.v, HEV, AONE, SQM, FMC, BYDDY, NSANY, F, FCX, RTP, BHP

"The ideal market situation for the new disruptive technology to create a lifetime investing opportunity is when the Demand for product or service is already there and you are able to deliver it in a new way, which will be more appealing to Existing consumers of this product or service. You have a dramatic shift in consumer preference and you are gaining a market share in a tidal wave fashion by shifting consumers from existing providers to the new product or service place. You do not have to teach the market and prove that they need this product - you just need to prove that the new technology you are putting in place is viable to deliver the Better Experience."

  Take your mobile phone and look at the first picture above - it is the power of progress and technological advance, what offshore drilling and wars can not deliver us any more (to continue supply "cheap oil), technology can deliver in a space of a few short years. We need a new drive, new ideas which will positevely affect all economy.
  Here is the reply to all concerns about "so expensive" electric cars. We expect that lithium batteries will have the double capacity with 50% cost cut in the next five yeas. It will open the doors to the EVs mass market and even initial ownership of the Electric Car will be cheaper that CV one.

"We expect consumers to shift - on a mass scale - from CVs to EVs, with proof that technology is viable and can provide the same utility but with a Better Experience. The Emotional Drive will be the driving force of this switch of consumer preferences"


By Mariko Yasu and Maki Shiraki - Aug 26, 2010 

Picture: Employees carry pallets containing Panasonic Corp. lithium-ion batteries on the production line of the company's plant in Suminoe, Osaka City, Japan. Photographer: Tetsuya Yamada/Bloomberg

Panasonic Corp. and Samsung SDI Co., the world’s two largest makers of rechargeable batteries, may deepen price cuts this year as overproduction worsens a glut in the industry, analysts said.

Lithium-ion battery prices may tumble 19 percent in 2010, the biggest drop in five years, said Hideo Takeshita, an analyst at the Institute of Information Technology Ltd. in Tokyo. Shiro Mikoshiba, an analyst at Nomura Holdings Inc., said the worsening oversupply may push prices down as much as 25 percent.

The price drops highlight how battery makers in Japan and South Korea, accounting for 75 percent of global production, may be sacrificing profit for market share as automobiles with no gas tanks are projected to help triple sales of lithium-ion cells in six years. Cheaper batteries may lead to lower costs at carmakers such as Nissan Motor Co., whose all-electric $32,780 Leaf sedan is scheduled to go on sale in November.

“Battery makers will probably go through a tough time with falling prices,” said Mitsushige Akino at Ichiyoshi Investment Management Co., who oversees about $450 million in assets in Tokyo. “The business may become lucrative only for a couple of companies with dominant market share. Others may never be able to make money.”

Winning the Battle

South Korean battery makers including Samsung and LG Chem Ltd. may better cope with lower prices than Japanese rivals because they purchase materials more cheaply from China and have faster production, Takeshita said. The won’s weakness against the yen also makes Korean products more competitive, he said.

“We anticipate the harsh price competition with South Korean makers will continue,” said Akira Kadota, a spokesman at Osaka-based Panasonic. “We are reviewing our production process to strengthen our cost competitiveness so that we can win the battle.”

Panasonic, which vaulted atop the rechargeable-battery industry with its purchase of Sanyo Electric Co., rose 1.6 percent to 1,060 yen as of the 11 a.m. break in Tokyo trading, narrowing its loss this year to 20 percent. Samsung SDI, the battery-making unit of South Korea’s largest industrial group, fell as much as 4.1 percent.

Samsung SDI was downgraded to “reduce” from “hold” at BNP Paribas Securities (Asia). Analyst Peter Yu cited excessive hype about batteries for electric vehicles as part of the reason, according to his report today. The stock has gained 19 percent this year.

$30 Billion Industry

Samsung SDI, based in Yongin, South Korea, will likely overtake Panasonic’s Sanyo as the world’s top producer of lithium-ion batteries this year, according to estimates at the Institute of Information Technology. Samsung SDI spokesman Seo Hae Soo declined to comment on the outlook for prices.

LG Chem, the third-largest maker of rechargeable batteries, expects price drops to persist, spokesman Terry Lee said. Falling prices of the product won’t have a serious impact on the company’s profit because LG Chem is buying lithium at competitive prices, he said.

At stake is leadership in an industry that Panasonic estimates will grow to 2.5 trillion yen ($30 billion) by 2015 from 926 billion yen last year. Shipments of lithium-ion batteries are estimated to rise 31 percent in 2010, after a 2 percent drop last year, according to the Institute of Information Technology.

Electric Vehicles

While lithium-ion cells are mainly used to power laptop computers and mobile phones, electric vehicles may fuel most of the growth. Sales of batteries in electric, hybrid and plug-in hybrid cars will increase to 1.7 trillion yen in 2020 from almost zero in 2009, according to March estimates at Daiwa Securities Group Inc.

Panasonic, which has pledged to invest 300 billion yen in energy-related products over three years, started production of lithium-ion cells at a factory in Osaka in April, aiming to double its annual production to 600 million units. The company aims to triple sales of lithium-ion cells by March 2016, Naoto Noguchi, president of Panasonic’s battery unit, said in an interview this month.

Sony Corp. is spending 40 billion yen to boost its monthly production capacity this year 80 percent from 2008. The company built a battery plant north of Tokyo in March and is adding facilities in Singapore and China.

Sony anticipates a difficult environment for the battery business because of competition and price declines, said Tomio Takizawa, a spokesman at the Tokyo-based electronics maker.

Samsung Group, whose units include SDI and top television- maker Samsung Electronics Co., said in May it plans to invest 5.4 trillion won ($4.5 billion) in batteries for electric vehicles by 2020.

“It’s a battle between the South Korean and Japanese makers,” Takeshita said. “They’re playing a game of endurance that’s eroding profitability.”

To contact the reporters on this story: Mariko Yasu in Tokyo at; Maki Shiraki in Tokyo at

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