MOUNTAIN VIEW, Calif. The multi-billion dollar battery industry is poised for huge growth. But lithium ion, today's fast rising technology, faces significant limits and a race is on to find better chemistries.
That was the conclusion of a panel of experts at a Silicon Valley gathering of investors Tuesday evening (April 13) sponsored by Silicom Ventures.
Lithium ion makes up about $10 billion of the $50 billion worldwide market for batteries today, but "every link in the whole value chain needs to scale up by three orders of magnitude," said Mark Platshon, a partner with VantagePoint Venture Partners (San Bruno, Calif.) that has investments in electric vehicle maker Tesla Motors, battery recycler Better Place and other battery companies.
"Given adoption in everything from consumer electronics to hybrid electric vehicles, we will need to grow production of lithium ion batteries a thousand fold, and not many $10 billion industries will grow a thousand times bigger," Platshon said.
Lithium ion batteries will see "in ten years a ten-fold increase in production, and that's only with tiny growth of things like electric vehicles," said Atiq Raza, an entrepreneur in residence at Khosla Ventures and chief executive of lithium ion battery maker Seeo (Berkeley). That's why battery maker A123 Systems [that recently went public] has a billion-dollar market cap," he said.
"A123 was the hottest IPO of 2009 despite having $91 million in annual revenues and $86 million in losses--this is how the market is valuing the promise of batteries," said Doron Simon, general partner of consulting firm Simon Says (Los Altos) who moderated the panel.
Although lithium batteries are the fastest growing segment of the market, the technology has limits in energy density and readily available raw materials. In a video segment below, panelists generally agreed the market for electric vehicles will be limited as a driver for lithium batteries.