Green Tech Expert Mike Millikin Predicts The ‘Big 3’ Of Lithium-ion Battery Firms (Part 1 of 2)

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With oil prices still going up, investors are increasingly aware that there will likely be a pot of gold waiting for the companies that come to dominate the lithium-ion car battery market. That market is expected to take off in 2010 or 2011 as a raft of plug-in electric hybrid vehicles (PHEVs) are introduced by virtually all major car manufacturers.

If you want to share in this big payday, Michael Millikin, editor of the authoritative alternative energy web site Green Car Congress, has a prediction you should to write down. Millikin predicts that the “Big Three” of lithium-ion car battery manufacturers will be, in order: Panasonic EV Energy Co., a joint venture between Toyota and Matsushita; Automotive Energy Supply Corp., a joint venture between Nissan and NEC Corp., and LG Chem, South Korea’s largest chemical company.

Exactly how much each will make is anybody’s guess at this point, but one research firm believes nearly three million PHEVs and all-electric vehicles per year will be sold by 2012, making the 2012 lithium-ion battery market worth $16.9 billion compared with $6.8 billion in 2007. (See New Lux Research Report: 3 Million Electric Vehicles a Year By 2012; Fuel Cells ‘Return From the Dead’; Li-ion Surges.)

Why does Millikin think these three will outshine other notables such as Sanyo and GS Yuasa Corp., which he picked to come in fourth and fifth respectively? Mostly because the Big Three have the strongest ties with automakers expected to be leaders of the PHEV revolution.

After a faltering start, several experts say Toyota is now supercharging its effort to get PHEVs into its showrooms, with Panasonic EV its battery supplier. Meanwhile Nissan-NEC is “very aggressive,” according to Millikin, who wouldn’t be surprised if it moved up to the number one position ahead of Toyota. In late May, Nissan-NEC announced that it had started full operation of lithium-ion car batteries, which will be used in forklifts in 2009 and in vehicles starting in 2010, with a global rollout by 2012. Nissan-NEC, through Nissan’s alliance with French automaker Renault, will also be the battery supplier to Project Better Place, which intends to put electric vehicles on city streets in Israel, Denmark and other countries starting in 2011.

LG Chem, through its Michigan-based unit Compact Power Inc., also is very-well connected, Millikin said, with deals to supply lithium-ion batteries to both Hyundai and General Motors. In announcing the GM-LG deal a year ago, a top GM official said, “This technology is developing rapidly.”

While Millikin doesn’t see either Sanyo (which has a deal with Ford and wants to sign deals with other carmakers), or GS Yuasa (which has a deal with Mitsubishi Motors), cracking the top three, he wouldn’t be surprised if A123 Systems, the privately-held Massachusetts company that’s generating a lot of buzz in anticipation of its expected initial public offering (IPO) maybe later this year, unseats LG Chem for third position. A123 Systems has the financial backing of General Electric and has deals with, among others, GM. (see When A123 Systems Goes Public, Watch Stock Prices Rise for Competitors Ener1, Valence and AltairNano)

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