The rising stars of the rechargeable battery space have, of course, been light-weight, but energy-dense lithium batteries, which are expected to experience a growing adoption rate in the global push for fuel economy.
NEW YORK ( TheStreet) -- As electric car trends continue to move forward into 2011, investors want to know what's in store for makers of the rechargeable batteries that will be powering them.
According to Wunderlich analyst Theo O'Neill, for lithium batteries to penetrate a meaningful fraction of the world's car market, prices need to fall by about 50%. He estimates this will occur in 2014, or when the industry has produced more than 50 million individual battery cells, or 150,000 electric cars. The lithium battery business could become very large depending on the market's acceptance of electric cars and hybrids, how quickly battery costs can be lowered and the extent of government subsidies," O'Neill says. In one instance of electric car acceptance, General Motors ( GM) has now raised its planned production rate of plug-in hybrid electric Chevrolet Volts to 60,000 a year by 2012, from the initial planned production rate of 30,000 a year, according to D.A. Davidson analyst Avinash Kant, who cites industry sources in an equity research report. General Electric ( GE) recently announced that it will buy 25,000 electric vehicles by 2015, almost half of them from GM, including the 2011 Chevy Volt. Read on for a sense of where a handful of lithium battery stocks that dropped in 2010 are going as we enter 2011.
ENER1 ( HEV)
Lew said if Ener1 was able to ramp up its battery production to 900 packs a month while fulfilling Think's orders, it would "elevate the company's stature" in the emerging electric vehicles market, and furthermore, lead to more business supply agreements with "tier-1" automakers. He was also optimistic about the possibility of long-term financial gains for Ener1 through its growing presence in China through a joint venture (JV) agreement with Chinese tier one auto parts supplier Wanxiang for developing battery systems, and relationship with Chinese automaker Geely via its partnership with Volvo; Ford ( F) recently sold its stake in Volvo to Geely's parent company. The company recently also signed a $40 million supply agreement with Russia's Federal Grid.
A123 ( AONE)
ADVANCED BATTERY TECHNOLOGIES ( ABAT)
ABAT) reported third-quarter net income increase of 118.8% year-over-year to $11.1 million, or 16 cents a share, from about $5.1 million, or 8 cents a share a year ago. For the quarter ended Sept. 30, ABAT generated revenue growth of 46.4% to $25.9 million, from $17.7 million the same time last year, partly driven by its recently-acquired electric vehicle business. At the end of April last year, ABAT said it completed the acquisition of Chinese electric vehicle maker Wuxi Angell Autocycle for RMB 70 million or $3.6 million.
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