Energy storage, driven largely by electronics and plug-in vehicles, will grow at a compound annual growth rate of 8 percent to $50 billion in 2020 with dramatic shifts’ coming from the transportation industry, according to a Lux Research report, “Finding Growth Opportunities in the $50 Billion Energy Storage Market.”
Transportation applications will outpace electronics growth — attaining an 11 percent CAGR to become a $21 billion market by the end of the decade. Its faster growth will close the gap with electronics, which still will remain the single largest market valued at $27 billion. The market for stationary applications will be worth $2.8 billion as it awaits cost breakthroughs.
In addition, incremental evolutions such as start-stop technology are leading to significant changes in the energy storage market. With global sales of 59 million, a 53 percent market share and $6.1 billion in annual revenue, microhybrids for the first time will overtake the conventional internal combustion engine and emerge the most popular drivetrain by 2020.
“The automotive market is well on its way to displacing consumer electronics as the biggest user of energy storage,” said Cosmin Laslau, an analyst at Lux Research and lead author of the report. “As that happens, it will lead to further scale and a new round of cost reductions, which will impact stationary applications, as well.”
Lux Research analysts evaluated opportunities as the energy storage market exhibits tremendous growth and significant shifts. Among their findings:
Electric vehicles (EVs) are the largest opportunity in transportation. With modest sales of 440,000 units, EVs still will use $6.3 billion worth of energy storage — more than the microhybrids, which will have sales two orders of magnitude higher at 59 million units. The U.S. will lead EV sales for most of the decade, peaking at 167,000 units in 2019 before expiring subsidies dampen sales. That will help China nearly catch up with the U.S. in 2020 — attaining sales of 145,000, vs. 148,000 in the U.S.
Smartphones are the leader in electronics. The ever-growing popularity of smartphones, allied with a gradual increase in their battery capacity, will see this market segment growing at a 12 percent CAGR to $8.4 billion in 2020. Tablet computers follow with a 6 percent CAGR to $12 billion — the single largest energy storage consumption by a single application. In contrast, the energy storage market for feature phones, laptops and e-readers will shrink and wearables will not live up to the hype.
Residential leads stationary applications. Driven by solar integration, residential represents the biggest opportunity in stationary energy storage applications — leaping from less than $0.1 billion to $1.2 billion in 2020. A robust downstream industry, innovative financing and strong policies in countries such as Germany and the U.S. are favorable factors. UPS and backup applications provide the next-largest opportunity with $0.7 billion in 2020 revenues while renewables’ shifting at the utility level with $0.3 billion rounds out the top three.
The report, “Finding Growth Opportunities in the $50 Billion Energy Storage Market,” is part of the Lux Research Energy Storage Intelligence service.