Smart solutions in consumer electronics and automotive prompted a whole new need for portable energy storage solutions, promising billions in return.
Advances in tech have heightened demand for batteries—and companies are capitalizing on the opportunity. Big names like LG Chem, Panasonic, Tesla and BASF among others are investing in the battery segment.
While batteries themselves are not a new industry, new products mean companies have to change and further develop their battery offerings. For instance, solar panels and the move to homes running on cleaner energy are fueling demand for new home storage batteries not previously available. The target market is new—and, for the moment, small. Companies like Tesla, LG Chem and Panasonic need to grow their customer base, encouraging shifts in economic policies, production, delivery, and competition.
BASF has been in talks with Japan’s Toda Kogyo regarding the use of lithium-ion batteries for the automotive, consumer electronics, and stationary storage markets. In fact, the companies created the BASF Toda Battery Materials in the last year to supply CAM with lithium-ion batteries in Japan. The collaboration of the two companies in North America is expected to significantly boost battery production.
However, as large as the market is for portable energy storage, there exist multiple hurdles. Elon Musk once envisioned homes running on their own power, but there needs to be a market before he can begin large-scale production. Expectations are grim for a SolarCity-Tesla merger, as experts doubt that the collaboration can unlock the type of market that will bring in profits. Home storage batteries still remains a relatively small market compared to those for solar or wind energy. Musk and his team would need to carve out a market to make the product line work. Home batteries, as opposed to mobile power banks, are more expensive. The market is only thriving at the moment thanks to tax credits from the government, but suppliers will need to find a way to sustain it in the long run.
Suppliers and companies are now faced with a dilemma: whether or not they should tap the battery segment. On one hand, it offers high potential as the market is huge—but on the other it is highly risky because not all portable battery offerings offer the same return.
Ultimately, a widespread demand for new technology will spur a demand for batteries—those companies that have prepared will be ready to jump on the new market.