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News Release from: Frost and Sullivan
Edited by the Electronicstalk Editorial Team on 27 March 2003
Automotive sector dominates supercapacitor market
An excited buzz is surrounding supercapacitors that offer storage capability millions of times greater than that of traditional capacitors
High costs and outstanding technical issues are, however, two key factors restraining growth optimisation. Even as technical problems get resolved, market participants are pinning their hopes on the automotive industry, particularly the hybrid electric vehicles (HEV) segment to increase volume demand, consequently triggering significant price declines.
This article was originally published on Electronicstalk on 27 March 2003 at 8.00am (UK)
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The total market generated revenues worth $2.85 million in 2002, based on the sales of 57,656 units.
Although a relatively small market today, it is expected to show an impressive growth rate between 2002 and 2009.
The market is expected to grow substantially to the end of 2009, represented by a unit compound annual growth rate of 157% and a revenue CAGR of 49%.
The automotive sector is expected to be the lynchpin.
While there will be sizeable demand from end-user sectors such as rail (heavy rail vehicles, tramways and metro), renewable energy systems (including wind power and solar applications), and uninterruptible power supply systems (over 50kVA), automotive applications are projected to be the highest growth area for supercapacitors.
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In the long term, almost 60% of the total sales of Supercapacitors are likely to originate from the automotive segment.
Demand is likely to come from truck companies, bus manufacturers - the first vehicle segment to adopt supercapacitor technology - as well as companies involved in the design and testing of 42V vehicles and HEVs.
Already, 12 car manufacturers in Europe alone are conducting research on HEV vehicles.
Tests on these prototype vehicles are spurring uptake of supercapacitor samples while generating significant revenues for the supercapacitor industry.
Moreover, as automotive manufacturers look towards improved energy storage technologies to rapidly develop the electric vehicles segment, they are encouraging supercapacitor manufacturers to boost performance levels, lower costs, and build production capabilities.
Identifying applications that will hold particular appeal for the automotive sector, a new study by Frost and Sullivan, the international market consultancy, notes that supercapacitor market growth is most likely to be driven by automotive applications such as drive train applications (regenerative braking, launch-assist, and start and go) and the powering of the onboard electronic features.
Across Europe, government incentives promoting the use of environmentally friendly energy storage devices as well as 'green' regulations encouraging the development of HEVs are likely to have a positive impact on the market for supercapacitors.
The British Government, for instance, is undertaking to convert its mainstream vehicles to low-carbon technologies.
By 2012, targets for achieving lower carbon emissions are set to account for 10% of all new car sales in addition to the 600 plus buses being operationalised annually.
Such pro-environment policies are likely to benefit the supercapacitor market in the long term.
More immediately, existing end-user awareness and familiarity with the concepts and working of traditional capacitors is likely to give supercapacitors the edge over competing technologies.
'Such awareness is already playing a critical role in the introduction of supercapacitors to the market because, from the beginning, researchers are predisposed to test and include supercapacitors in their possible designs', explains Anne-Corinne Barbier, Research Analyst at Frost and Sullivan.
'However, this market driver will probably develop its full impact only once price is not a barrier in the adoption of the technology by highly price-sensitive applications in the UPS or renewable energy markets', she adds.
Indeed, at present levels, supercapacitors are too high priced for many potential customers.
Taken in conjunction with the availability of competitively priced and reliable alternatives such as lead acid storage battery systems, growth prospects are likely to be dampened across certain key end-user segments.
In response, supercapacitor companies are promising considerable price reductions.
This assurance stems from the prospect of increased production impelled by the hybrid-electric segment.
The success of this strategy is, however, dependent on the automotive industry actually deciding to incorporate supercapacitors into new HEVs when they enter the mass market.
'Should this be the case, manufactured quantities will probably be high enough to generate sufficient economies of scale that will enable manufacturers to get a return on the considerable investments they would have made in the development and early commercialisation phases', says Barbier.
On the other hand, launch dates of hybrid electric vehicles continue to be deferred.
In addition, the initial expenditures on production and R and D will have to be recovered to a significant extent before price reductions can occur.
These are eventualities that will need to be factored into long-term calculations.
While acceptance of supercapacitor technology in the automotive segment will be a critical determinant of market expansion, other end-user markets offer tangible growth potential as well.
The rail market - expected to be the second largest in revenue terms - is likely to stimulate demand for very large cells.
The wind turbine segment is set to play a prominent role in promoting supercapacitor deployments within the renewable energy market.
By 2009, nearly 13% of large UPS units sold to the IT, telecomms and manufacturing as well as oil and process industry markets will be equipped with supercapacitors.
As the nascent supercapacitors market gathers momentum, companies will have to decide which of these end-user segments they should concentrate on.
They will also have to determine their product-range strategy, ie whether to develop separate cells or modules.
In 2002, European companies such as Epcos and Montena Components dominated the market, generating more than 60% of the revenues.
However, US company Maxwell Technologies' acquisition of Montena in July 2002 has transformed the competitive landscape and reflects the growing role being played by US and Asian companies such as Ness capacitor Co and Matsushita Electric Industrial Co.
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