New projections from Navigant Research show that the market for lithium-ion batteries made for electric cars will grow substantially over the next decade.
According to the report, revenue from lithium-ion batteries for electric vehicles will reach $6 billion this year, but by 2023 annual revenues will surpass $26 billion.
"The shift to lithium ion represents a major endorsement of the ability of this chemistry to perform consistently in an automotive environment," said David Alexander, senior research analyst with Navigant Research, in a statement. "Most of the major automakers have introduced battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) models in the last two years, almost all of which use lithium ion batteries for onboard energy storage."
But while the industry seems to be moving toward lithium-ion batteries, one company could play a huge role in the growth of the market. That company is Tesla Motors. It has announced plans to build a multi-billion dollar factory that Tesla believes will produce more lithium-ion batteries in one year by 2020 than the entire world produced in all of 2013.
And earlier this week German automaker Daimler AG bolstered its investment in lithium-ion batteries by acquiring lithium-ion battery cell maker Li-Tec Battery GmbH.
Last month, three major players in the lithium-ion field announced a joint venture with a goal of doubling energy capacity in batteries for EVs.
But not everyone is banking on lithium-ion for their EV batteries. Kia says it has chosen lead-carbon over lithium-ion batteries for "mild hybrid" cars that use a small electric battery.