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The global lithium-ion battery (LiB) market was worth $11.7 billion in 2012 and is expected to double by 2016, according to a new report from Frost & Sullivan. This will happen despite the recent and highly publicized issues with Boeing's 787 jet, and despite Airbus' decision to abandon these batteries. In fact, the report says these incidents may affect the demand only in the short term.

North America holds the highest share of revenues for consumer and industrial applications, while Europe boasts the highest revenues for industrial LiBs. The highest growth in industrial battery demand is expected to come from Asia-Pacific region. China, Japan and South Korea account for close to 85-90% of global LiB production.

China, in particular, has the highest concentration of LiB manufacturers: over 200 players catering especially to the consumer segment and around 30-40 companies for automotive applications. The report says the Chinese government is strongly promoting electric vehicles (EVs), grid-scale energy storage and smart grids. Furthermore, many of the U.S. companies that have gone bankrupt have been acquired by Chinese firms; therefore, this region is expected to further strengthen itself as a leader of LiB production.

In the U.S., the Obama administration's American Recovery and Reinvestment Act of 2009 funding saw many LiB companies being set up or expanding existing facilities, mainly to cater to the EV segment. However, the past two years have seen many of these companies go bankrupt with the funding drying up.

Moreover, Frost & Sullivan says that the ongoing economic slowdown, coupled with the high cost of EVs (mainly due to high battery cost), has resulted in less demand for EVs than expected in the past one to two years. The number of EVs on the road is much lower than anticipated, and this has affected the demand for batteries.

Germany is a strong contributor among European countries, and the demand for batteries comes from all three segments: consumer, industrial and automotive. According to the report, Germany and Switzerland are the energy storage/battery R&D hubs, and quite a few manufacturers are based in these two countries.



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