By John Gartner
In advance of this fall’s launch of plug-in hybrid and electric vehicles, lithium ion battery manufacturers are breaking ground on manufacturing plants nearly every month. About $2 billion in federal stimulus funding has spurred the building of facilities in Michigan and Indiana that will start churning out battery packs by the end of the year. But the escalation in production has the potential to outstrip the demand for the batteries by as early as 2012.
As I said on NPR�"s �SAll Things Considered" earlier this week, the battery companies have understandable motivations to quickly ramp up production. For battery companies to receive the full amount of stimulus grants and loans, they must meet specified goals for production capacity. What happens if these production goals exceed the high consumer demand for electrified vehicles anticipated by automakers?
During 2010 and 2011, consumers and fleet operators who are eager to own EVs will scoop up the first units that off the line without much concern for economics. For these early adopters, the first electric cars and plug-in hybrids are �Smust haves.⬝ But that is likely to be a niche market, numbering in the thousands to 10s of thousands. Remember that only about 1,000 Tesla Roadsters have been sold so far. The market appeal of EVs will have to be broadened beginning in 2012-13 to attract a more cost-conscious consumer, and that adjustment period could impact battery manufacturers who are likely to then be in full production.
Read More... [Source: HybridCars.com]