More than 20 companies are now believed to be making lithium-ion batteries for electric vehicles, in part because they were encouraged by government subsidies. The United States has put more than $5 billion into electric vehicle development, about half of which has been directed toward battery research and manufacturing. Similarly, China is believed to have invested $15 billion into alternate-fuel vehicles, while South Korea has invested more than $10 billion.
"There's been a lot of government focus on supporting this industry," Hurst said. "But there has definitely not been the quick ramp-up of production and sales of EVs that people were expecting."
Survival will not be a function of battery chemistry, Holman said. Most lithium-ion batteries use a graphite anode and a cathode that can be made from a variety of lithium-based materials. Lithium manganese spinel, which is employed by the Chevy Volt, will survive, as will lithium iron phosphate, which is used by A123 Systems and several Chinese battery manufacturers. Lithium cobalt oxide (18650-type batteries used in the Tesla Roadster) will also survive because that chemistry is commonly incorporated in consumer electronics.
"You're going to see all of the chemistries get manufactured," Holman said. "There will be winners and losers in every category."
Some battery makers may be able to hang on if they can adapt to making smaller batteries for products such as e-bikes. Tens of millions of e-bikes are sold in China every year and 120 million of them are already on the road there.
Because many lithium-ion EV battery cells tend to be large (about the size of a laptop computer), however, the number of other applications for them could be limited. For that reason, analysts believe the shakeout could be significant.
"It's pretty clear there's going to be an enormous increase in lithium-ion battery production," Holman said. "But the market -- in terms of the number of electric vehicles that will be bought and sold -- isn't going to keep up with that expansion."