Lack of demand is already causing problems for some lithium-ion battery manufacturers. In recent years, two lithium-ion battery makers -- A123 Systems and Ener1 -- have filed for bankruptcy protection. And in February, a US Department of Energy investigation discovered that idle employees of LG Chem Ltd. were playing board games, watching movies, and volunteering at local non-profit organizations during work hours, after the company took more than $150 million in federal funds to help build its battery cell manufacturing plant. The battery manufacturer was subsequently asked to repay $842,000 in taxpayer funds.
Experts say the situation has been getting worse for lithium-ion, following the massive public attention of overheating incidents on Boeing’s 787 Dreamliner. “The glamour has definitely faded for lithium,” Cole told us. “The Boeing situation was the crowning blow.”
To be sure, lithium-ion will continue to play a role. Ford Motor Co. announced late last year that all its new hybrids would migrate to lithium-ion. And Pike Research declared earlier this year that the emergence of plug-in hybrids would boost lithium-ion sales over the next few years. ”Sales of lithium-ion batteries will be better than they have been,” analyst Dave Hurst of Pike Research told us. “But they still won’t be very good.”
The question now is how much of the hybrid market will still belong to lithium-ion. Most industry analysts still expect plug-in hybrids to be the province of lithium-ion batteries. However, the low end of the hybrid market -- mild hybrids and start-stop micro-hybrids -- will be a mix, with lead-acid, nickel-metal hydride, and lithium-ion grabbing chunks of the market.
”Lithium-ion is still a very solid player,” Cole said. “But now we’re entering a more realistic period with respect to batteries. The hype is over. The cost is going to have to come down now."