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Communication, personal productivity and recreation are now largely based on battery-powered applications. This report shows how the development of battery technology and the battery market took place in different steps, in interaction with products. The same dynamic means that batteries are once again a growth area with the electrification of vehicles.

The battery principle is a hundreds of years old invention that has enabled much of the everyday technology we take for granted today. As these products and applications have evolved, the market for batteries has also grown. This has meant an increased scope for research and development on battery chemistry and related technology. When the development of new products and a greater leap in battery performance coincided, the battery market has grown rapidly to substantially higher levels – the battery market has naturally ridden the application’s diffusion curve. That is why batteries today – despite their hundred-year history – are once again at the beginning of a period of strong growth are to be regarded as a growth area. This time, it is mainly electric vehicles that drive the development.

The development of the battery market has always had a strong connection to an existing product or application and has rarely developed in isolation. Because batteries are not an end market in themselves, the battery market is driven by the growth and integration with the applications that enable them. Therefore, the rate of growth is also affected by how critical the energy storage is for the application as a whole and how important different functional dimensions such as weight, energy density cost are for it.

But behind this simplified logic there is a complexity and uncertainty that should not be underestimated. There are many different materials that affect the electrochemical performance of the battery, and that compete with each other. Monitoring systems and how batteries are integrated are also critical to practical performance. The applications in turn – and the demands they put on the power supply – are very varied. Production processes, economies of scale and business models also affects the commercial potential of batteries. Finally, in many cases, there are existing and potential substitutes.

What currently drives investment in battery production capacity and research on battery technology are instead expectations of a rapidly growing market for electric and hybrid cars, in the same way that they were previously driven by consumer electronics. The market development for batteries is therefore strongly dependent on how the electric car market develops. In turn, it is dependent on environmental goals and public support for electric cars.

 

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