LONDON, August 30, 2010 /PRNewswire/ -- The batteries used to propel electric vehicles (EVs) can be derived from one of several chemistries, including lead acid, nickel metal hydride (NiMH) and lithium-ion (Li-ion). The rapidly developing and evolving market for EVs is boosting demand for new battery technologies and greater supply. The EV industry has developed quickly, after decades of slow development, causing a potential bottleneck in battery technology supply. The chemical industry has recently discovered the opportunities to supply materials and components to this market, triggering a race to develop products.

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New analysis from Frost Sullivan (http://www.chemicals.frost.com), Global Opportunity Analysis for Chemical and Material Suppliers in the Electric Vehicle Batteries Market, finds that the EV Li-ion battery chemical and materials market is expected to grow at a compound annual growth rate (CAGR) of 125 per cent from 2010 to 2016. The products covered in this research service are separators, anodes, cathodes, electrolytes as well as binders and casings.

All the major automotive manufacturers are developing EVs -- considered the next generation of vehicles and a means for original equipment manufacturers (OEMs) to differentiate themselves to stay ahead of the competition, says Frost Sullivan's Global Programme Manager for Transportation Chemicals, Robert Outram. Escalating oil prices and environmental concerns are driving governments to grant incentives and encourage zero emission vehicles, further endorsing the importance of EVs and stepping-up the demand for EV batteries.

Chemicals and materials suppliers in the EV batteries market can expect exponential growth, as major OEMs launch their EV range with a plan for commercial production.

However, only a few market participants can supply separators, electrolytes, anodes and cathodes, particularly in Europe, potentially causing a bottleneck in the entire EV batteries market. Chemical and battery companies have failed to keep pace with the development of vehicles as electric vehicles have been promised for many years. Up until recently the market has failed to materialise causing chemical companies to develop a wait and see attitude toward battery material development. Now the market has finally taken off, very few companies are in a position to capitalise on the opportunities.

The market will face significant price pressure from downstream companies, explains Outram. Additionally, increasing competition from low-cost production locations will intensify the profit margin reduction for chemical suppliers.

With the EV batteries market showing signs of genuine potential in this decade, chemical companies are beginning to rise to the challenge and are partnering with the key battery producers to supply the required volumes and enhance existing battery technology.

EV batteries need considerable improvement in terms of energy storage capacity, size, weight, and cost, concludes Outram. The chemical industry can help achieve these goals with the development of innovative materials, chemicals, and solutions.

If you are interested in more information on this study, please e-mail Monika Kwiecinska, Corporate Communications, at monika.kwiecinska@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

Global Opportunity Analysis for Chemical and Material Suppliers in the Electric Vehicle Batteries Market is part of the Chemicals Materials Growth Partnership Services programme, which also includes research in the following markets: Automotive Adhesives Global Market Analysis, Strategic Analysis of the Global Automotive Under-hood Plastics Market, Lightweighting Megatrend Effect on Global Chemical Demand, and Global Markets for Plastics in Passenger Vehicles. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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Global Opportunity Analysis for Chemical and Material Suppliers in the Electric Vehicle Batteries Market M581 Contact: Monika Kwiecinska Corporate Communications - Europe P: +48-22-390-4127 F: +48-22-390-4160 E: monika.kwiecinska@frost.com http://www.frost.com

SOURCE: Frost SOURCE: Sullivan

CONTACT: Monika Kwiecinska of Frost Sullivan Corporate Communications -Europe, +48-22-390-4127, fax, +48-22-390-4160, monika.kwiecinska@frost.com