Navigant Research Blog

Battery Makers Moving from Supporting to Lead Actors in EV Industry

— March 30, 2016

Accumulators and batteries close up.While General Motors (GM), BMW, Audi, and others are in hot pursuit of Tesla Motors for the media’s attention, the battery makers that power their cars are becoming more prominent as industry leaders. LG Chem and the other top-tier battery suppliers are expanding relationships with the automakers that will lead these companies to selling more of the technology found inside a plug-in electric vehicle (PEV).

Most notably, South Korea-based LG Chem is now supplying not only battery packs, but also motors, inverters, and onboard chargers to GM for the upcoming Chevrolet Bolt. LG Chem expects its automotive battery business to reach $1 billion annually this year, and the company is pushing harder into stationary energy storage as well.

LG Chem committed early to the EV battery market, and Navigant Research (then Pike Research) ranked the company as the leader in the industry as early as 2012. It retained its position during the November 2015 Navigant Research Leaderboard Report: Lithium Ion Batteries for Transportation.

EV Battery Manufacturer Rankings, January 2012 (Left) and November 2015 (Right)

John Blog Charts

(Source: Navigant Research)

LG Chem recently won a contract to supply batteries for the upcoming Chrysler Pacifica plug-in hybrid. The company has the most diverse group of customers in the industry, supplying EV batteries to Daimler, Ford, Renault, and Volvo.

Meanwhile, competitor Panasonic is expanding in the burgeoning Chinese EV battery market  by forming a joint venture with Dalian Levear Electric Company to start producing batteries in the country, according to Automotive News China. Panasonic was the world’s largest supplier of EV batteries in 2014 with a 38% market share, according to Navigant Research’s Advanced Battery Tracker 4Q15 report. Panasonic is partnering with Tesla Motors to build the gigafactory, a $5 billion battery manufacturing plant that currently under development in Nevada. Tesla Motors recently canceled the larger 10 kW version of its pricey Powerwall home energy storage system, which was using batteries manufactured by Panasonic. Panasonic also supplies EV batteries to Audi, Ford, Honda, and Volkswagen.

Samsung SDI, LG Chem’s neighboring competitor in South Korea, said it will begin shipping batteries this year to enable a 300 km (186 mile) driving range for EVs, and it’s intent on doubling that range by 2020. Samsung will continue to sell batteries to BMW for the soon-to-be-upgraded i3, as well as the i8 sports car, and to Fiat for the 500e.

The quality and performance of the battery can make or break a PEV, and battery makers such as LG Chem will continue to benefit from that importance to further leverage their relationships with automakers.

 

 

EnerNOC Rides the Tesla Wave

— May 13, 2015

Tesla’s announcement on April 30 of its stationary storage product has been treated like the biggest energy news since Edison invented the lightbulb. Elon Musk’s cult of personality has captured the world’s attention, and anything he says gets extreme coverage. That’s not to say that there is no substance behind Tesla’s developments or that they won’t lead to changes in the industry. At the very least, the attention raises the profile of the normally staid energy world, which should benefit all players in the space.

One company that caught the Tesla wave was EnerNOC, which announced a partnership with Tesla’s new commercial and industrial storage offering. EnerNOC’s stock jumped over 20% after the news hit. That’s the short-term bump that such notoriety can lead to. I spoke with Micah Remley, EnerNOC’s senior vice president of product, to learn about what the company sees as the real benefits of this relationship.

Enhanced Intelligence

Basically, Tesla will provide the storage hardware to a facility and EnerNOC will provide the software smarts to tell the unit when to charge or discharge in an optimal manner. The software does this by taking in signals from inside the building and from external markets and figuring out how to gain the most financial benefit on an ongoing basis. Remley said that the Tesla unit has some smarts as a standalone unit, but the gains from EnerNOC’s software should outweigh the costs. When asked about the potential economic impact on EnerNOC’s business from this relationship, Remley said it is too early to measure as the partnership is still in its pilot phase. But it does not appear that this will add significantly to the bottom line in the near term.

I spoke with EnerNOC’s CEO Tim Healy at the company’s analyst conference back in November 2013, when the company launched its foray into the energy intelligence software space. I asked him if he planned on getting more into the hardware side with topics such as combined heat and power, solar, and storage; Healy said EnerNOC is clearly focused on the software side of things. It appears the company has found a way to keep to that mantra while not letting the proliferation of distributed energy resources pass it by.

Back to Earth

EnerNOC struck a similar deal with SunPower in the solar space in March that didn’t get nearly as much attention as the Tesla deal. From EnerNOC’s standpoint, things like solar and storage are just new endpoints that can be integrated into its existing software that has mainly been developed for demand response purposes. This move represents an important diversification strategy as competitors offer holistic solutions, customers demand central control systems for all of their various resources, and regulators in states like New York and California attempt to add value to all types of new technologies and market structures.

EnerNOC’s stock has come back down after the Tesla hype, but the partnership strategy should benefit the company in the long term.

 

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