some time, the automotive lead-acid starter
battery was thought of in national terms,
a product difficult to ship, and produced,
in the main, by local manufacturers. During
the 1990s, however, suppliers such as US-based
Exide and Japan’s Yuasa moved into Europe,
showing that this sector could indeed become
truly global. In fact, well over 70% of
Europe’s OE battery supply is now in American

In a commodity market, however, product
differentiation is often difficult and profitability
is inextricably linked to volume/economies
of scale in OE supply and pricing in the
aftermarket. However, battery chemistries
are changing following the gradual rise
in hybrid electric vehicles (HEVs) and 42-volt
powered cars. The latest forecasts suggest
that by 2010 almost a quarter of the vehicles
built in the world will feature a 42-volt
electrical system.

Since their introduction in the late 1990s,
about 150,000 HEVs have been sold worldwide.
Batteries in hybrid cars, unlike those in
pure electric vehicles, will serve for the
lifetime of the vehicle. For perspective,
‘lifetime’ means 100,000 miles for Honda
and 150,000 miles for Toyota. In terms of
time, both companies warrant for eight years.

The switch to hybrid and 42-volt systems
will bring opportunities as well as threats
to all suppliers. The greatest pressure,
however, is on battery manufacturers. Until
now, the vehicle battery has had two main
purposes: start the engine and supply power
to the electrical system when the engine
is switched off. But the HEVs bring in a
new dimension: vehicle propulsion. This
is a very different story. Unlike a standard
lead-acid starter battery, an HEV battery
must be able to withstand near continuous
current draws and almost total discharge
on many operating cycles. Given that the
battery application is totally different,
alternative technologies said to be more
suitable are nickel-metal-hydride (NiMH)
and lithium-ion (Li Ion) chemistry. Li Ion
has three times the amount of energy for
the same weight and volume as lead-acid
batteries. NiMH and Li Ion chemistry is
already popular in mobile phones and portable

Some vehicle makers have warned that battery
manufacturers need to speed up development
of a replacement for lead-acid batteries,
otherwise it may seriously hamper progress
in vehicle electrical and electronic systems,
particularly in the light of the switch
to 42-volt networks. It seems, however,
that battery manufacturers themselves do
not yet agree on the best technology to
meet the demands of a 42-volt system.

So which technology will win out? Well,
lead acid certainly has a cost advantage
over competing battery chemistries. Replacing
a NiMH or Li Ion battery for an HEV, if
required at all, will cost between $2,000
– $4,000. That is between five and ten times
as expensive as an equivalent lead-acid
battery. The cost of NiMH alone to the carmaker
is between $500 and $2,000 per HEV pack.

In an exclusive interview with,
Pankaj Dhingra, Delphi’s business line manager
for batteries, said: “Ultimately, I think
all three battery chemistries will be present.
Mild hybrids will have either 12-volt and/or
36-volt batteries. We believe that these
batteries will primarily be based on the
lead-acid chemistry. There is a lot of work
going on in lead acid; and these batteries
have a big advantage from a cost perspective.
When you go to full hybrid vehicles, such
as seen in the Honda Insight and Civic,
these vehicles are high-voltage systems
running at 150 – 300 volts. From a weight
perspective, because of the required energy
and power density, lead acid is not as appropriate
as some of the alternatives.”

According to Menahem Anderman, president
of California-based Advanced Automotive
Batteries and author of the report entitled,
‘A Critical New Assessment of Automotive
Battery Trends’, the global battery market
for advanced vehicles (i.e HEVs and vehicles
with upgraded 42-volt electrical systems)
is expected to be evenly divided between
NiMH and VRLA at about 400,000 batteries
each by 2008. Dr Anderman predicts that
HEV volumes will reach 600,000 units by
2008. The resultant advanced automotive
battery market is expected to top $500 million
by that year, with NiMH batteries capturing
$400 million and VRLA (valve regulated lead-acid)
batteries $100 million. He also estimates
that when 25% of the vehicles in operation
use 36-/42-volt systems, the automotive
battery industry will double from $8 billion
to over $16 billion. In addition, when 10%
of the vehicles in operation include HEV
functions, the dollar value of the automotive
business will triple.

Market players

The market has become an oligopoly dominated
by the major suppliers. As the number of
manufacturers rationalises – mainly through
globalisation – so the relative market shares
of the leading companies should increase.
This is indicated in the following tables
where industry estimates show the market
shares of the big four manufacturers: Exide,
Johnson Controls, Yuasa and Delphi Corp.

The three big American battery producers
effectively control 45% of the global automotive
lead-acid battery market. Exide is said
to lead, closely followed by Johnson Controls,
Yuasa and then Delphi Corp.

click here to class=
on the image to enlarge

In the North American OE lead-acid automotive
battery market, the largest supplier is
Johnson Controls, which leads with over
one-quarter of the market, followed by Exide
and Delphi Corp.

In Europe, Exide claims it has the largest
market position in automotive batteries
in both the OE and aftermarket. Its next
largest single competitor in the automotive
market is Johnson Controls (following its
acquisition of Varta and Hoppecke), followed
by Delphi and Fiamm. Both Johnson Controls
and Exide have around 30% of the European
OE battery market.


automotive batteries: A global
market overview

our series of component market
studies, this
report reviews the key market
drivers for vehicle batteries
and provides forward-looking
analysis for the European, Japanese
and North American markets.
Chapter two sets some market
shares for lead-acid battery
manufacturers in Europe, North
America and globally. The factors
affecting the OE battery market
are consumer demand for passenger
cars, light trucks and sports-utility
vehicles, consolidation in the
auto industry, globalisation
of vehicle makers’ procurement
activities and competition.
Chapter three sets out recent
innovations and assesses the
forces driving innovation in
the automotive battery arena.
Chapter four will provide you
with brief profiles of the major
battery manufacturers: Delphi
Corp, Exide Technologies, Japan
Storage Battery, Johnson Controls
and Yuasa
. Find out more


In 2002, Johnson Controls acquired Varta’s
automotive battery division for €312.5 million.
Johnson Controls now has annualised battery
sales of $1.8 billion with a market leadership
position in Europe as well as in the Americas.
Headquartered in Hanover, Germany, Varta
operates six battery assembly plants in
Europe located in Austria, the Czech Republic,
France, Germany and Spain. Varta manufactures
automotive batteries for BMW, DaimlerChrysler,
Ford, PSA, Volkswagen and other vehicle
makers in Europe. The company is also a
major supplier to the European independent
aftermarket, including customers such as
Robert Bosch, hypermarkets (such as Carrefour)
and wholesalers.

Other suppliers of batteries to European
vehicle makers include Moll, Delta Douglas,
Banner, Mutlu and Nuova Scaini.

In the Asia-Pacific region, the market
is dominated by the Japanese manufacturers,
including Yuasa, Japan Storage Battery,
Matsushita and Shin-Kobe Electric Machinery
Corp (a Hitachi group company). It indicates
that, despite the efforts of some of the
major players, the industry still has some
way to go before it can describe itself
as being truly global.

In South America, there are a number of
small manufacturers that dominate the starter
battery market. The industry is still very
nationalistic, understandably so in an area
where currencies have been unstable in the
past and where languages are not common
in many cases. Delphi has been operating
in the region with its own plant in Piracicaba,
Brazil and is market leader, albeit with
a fairly small market share of 10%. Yuasa
is also located in the region, and enjoys
a 3% share. Between them are local producers,
including Acumex and Baterias Moura.