It’s time for forklift battery companies around the world to prepare for growing sales. Lead-acid batteries will continue to be a leading supplier of motive power for the foreseeable future, analysts say.
The latest in-depth report on the forklift battery market forecasts a significant growth rate over the next five years. According to Research and Markets’ publication Global Forklift Battery Market 2016-2020, the segment will grow at an average compound annual growth rate of 8.1 percent through 2020.
This news overturns the assumption that competing technologies will soon take over the mainstream. To be sure, newer power sources, including hydrogen fuel cells and lithium ion batteries, are developing quickly. But according to the latest market analysis, electric forklift users will continue to invest in the latest generation of lead-acid industrial batteries for some time to come.
This news isn’t surprising when you consider the factors that recommend lead-acid batteries to forklift users in general. In this article, we will explore these factors, with the goal of illuminating key strategies forklift users can employ to derive the greatest gains from lead-acid battery stock over the next five years.
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Existing infrastructure overwhelmingly prefers lead-acid batteries.
At the start of the study period, in 2016, the vast majority of electric lift trucks were powered by lead-acid batteries — between 75 and 85 percent of all trucks in operation.
Switching to a competing technology is not as simple as replacing a battery. Hydrogen fuel cells, lithium ion batteries, and lead-acid technologies each require their own support infrastructure, which is often expensive and complicated to replace.
When faced with the choice between improving conventional battery rooms and installing, for instance, an entirely new hydrogen refueling station, cost analyses tend to recommend optimized battery handling equipment.
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Lead-acid batteries remain resilient in harsh industrial environments.
Lead-acid batteries are tough. Steel cases resist impact, while internal components combine sheets of lead with electrolyte, neither of which is particularly vulnerable to damage.
Electric material handling equipment often operates in harsh environments. While the heat, dirt, chemical splashes, and heavy vibrations of industrial applications may damage competing power sources, all of these things tend to bounce harmlessly off of the steel cases of lead-acid batteries.
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Improved battery technology boosts performance.
The science of forklift battery design continues to advance, contributing to the market’s steady growth. Several innovations make next-generation forklift batteries even more appealing for industrial applications.
Integrated supercapacitors, for instance, store excess power to generate a strong burst of energy for power-intensive tasks such as lifting particularly heavy loads. Carbon electrodes resist deposit build-up, extending the working lives of batteries. And micro-structured lead electrodes create more surface area without adding bulk, providing more power for material handling tasks.
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Advanced battery handling equipment limits change-out time.
In 2015, the Fuel Cell and Hydrogen Energy Association published a report with assistance from the U.S. Department of Energy.
In that publication, The Business Case for Fuel Cells 2015: Powering Corporate Sustainability, the authors write that “by using fuel cell-powered forklifts — which fuel with hydrogen in just two minutes compared to 13 minutes to change a forklift’s depleted battery — [one company] has regained over 156 hours of lost productivity over its three-shift operation, which has an economic value of more than $65 million annually.”
That company needn’t have bothered with the expensive conversion. A more cost-effective approach would have been to simply update the battery room. Operator Aboard Battery Extractors from BHS Global can easily meet fuel-cell recharge times with every battery change-out. The average battery swap using an Operator Aboard Battery Extractor System takes only 2-3 minutes.
Under the conditions listed above, optimized battery handling equipment would produce the same annual savings as fuel cells, with a more affordable initial investment and a lower cost of ownership.
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Electricity continues to be an inexpensive source of motive power.
In many nations, electricity bills are much lower than comparable fuel costs. The average price of electricity for an industrial facility in the United States in September 2016 was only 7.15 cents per kilowatt-hour, according to the U.S. Energy Information Administration. That’s up by only 0.16 cents from a February low of just 6.9 cents per kWh for industrial electricity use.
Non-refrigerated warehouses use an average of 6.1 kWh per square foot on an annual basis, and only a fraction of that goes to charging forklift batteries. Exact numbers differ widely, but consider that, by the above-listed figures, a 20,000 square-foot non-refrigerated warehouse paying that 7.15 cent/kWh rate would only spend US$8,723 per year on electricity.
We know that most of this goes toward lighting. Only about 35 percent of the average nonrefrigerated warehouse’s electricity costs go toward “miscellaneous” usages. Even if charging forklift batteries accounted for the entire cost of “miscellaneous” energy usage, that would only amount to a little over US$3,000 per year.
In the same span, a company that ran liquid propane forklifts and paying US$2.00 per gallon for fuel would spend around US$6,000 per year, equaling twice the price of an electric fleet.
When you boil it down this way, it’s clear why electric lift trucks continue to gain more market share, paving the way for expansive growth in battery sales all over the world.
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Battery fleet management tools increasingly reduce the cost of ownership of lead-acid batteries.
The Research and Markets report points out the plunging costs of battery ownership, attributing this phenomenon to inexpensive fleet management systems.
These computerized systems range from relatively simple to totally comprehensive. At the very minimum, a software/hardware combination like Next Available Battery (NAB-2000) tracks the charge status of every battery in the collection, showing the progress on a single-point display. This allows forklift operators to choose only batteries that are ready for a shift, extending battery life both during and beyond the current discharge cycle.
On the more comprehensive end of the spectrum, systems like Fleet Tracker from BHS Global collect data along every metric that can affect battery life. The software tracks charging and cooling time for batteries, leading lift truck operators to the best battery to choose at any given time. It ensures that batteries are used consistently, preventing the operational inefficiency of battery preference and neglect.
Fleet Tracker also collects data about battery maintenance. When it’s time for a watering, washing, or an equalization charge, the software alerts battery room staff. This contributes to longer battery lifespans and more efficiency across the organization.
Detailed reports give managers the information they need to right-size battery fleets, perfectly matching costs to energy output. With systems like Fleet Tracker, facility managers can realize the full potential of battery investments. This drives down the total cost of ownership considerably — which is another reason lead-acid batteries will continue to capture market share over the next five years, and potentially beyond.
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Counterbalance lift truck design benefits from the physical characteristics of lead-acid batteries.
Like co-evolving species, lift trucks and lead-acid batteries have influenced each other since the first days of electric material handling equipment.
Counterbalance forklifts make up the bulk of the industrial trucks bought and sold in the North American lift truck industry, according to figures from the Industrial Truck Association. In 2014, the latest year for which statistics are available, counterbalance trucks represented a full 57 percent of the market.
These vehicles were built to be powered by lead-acid batteries. Rather than lament the great weight of forklift batteries — which can easily weigh 2,000 pounds and much more — engineers that design electric forklifts use that weight as a feature.
As their name implies, counterbalance forklifts require significant ballast to remain steady while lifting heavy loads with the forks. Lead-acid batteries provide this counterweight along with the power that keeps trucks running.
Lighter batteries would require more space dedicated to weight. To remain efficient, forklift design depends on the source of weight serving several purposes simultaneously — hence the dominance of lead-acid batteries.
Conclusion:
Forklift battery technologies do not evolve in a vacuum. Certainly, lead-acid batteries will remain the leading source of motive power for lift trucks over the next five years. But hydrogen fuel cells and lithium ion batteries continue to develop, and are preferable in many applications — they just do not meet the specific needs of transportable material handling equipment such as lift trucks.
A report from Transparency Market Research predicts a CAGR growth of 24.58 percent for fuel cells between 2016 and 2024. Comparably little of that growth will come from the lift truck industry, however. In 2015, nearly 65 percent of fuel cell applications were stationary, not motive.
Those outside the industry sometimes think of lead-acid batteries as a stable, proven technology, and on a purely chemical level, they’re right. However, advancements in battery design, and in the critical infrastructures that boost value for these power sources, continue to recommend lead-acid technology as the top option for fleet owners.
According to this latest round of research, lead-acid batteries will continue to dominate the material handling industry worldwide, from North America to Asia, from the EU to the Southern tip of Africa.
References:
“The Business Case for Fuel Cells 2015: Powering Corporate Sustainability.” Energy. Fuel Cell & Hydrogen Energy Association, 2015. PDF. 22 Dec. 2016.
“Carbon-Enhanced Lead-Acid Batteries.” Energy. United States Department of Energy, Energy Storage Program, Oct. 2012. PDF. 22 Dec. 2016.
“Electric Forklifts vs LP Forklifts — Reduce Operating Costs.” WarehouseIQ. Warehouse IQ, 2 Jan. 2011. Web. 22 Dec. 2016.
Faust, Brian. “Electric Forklifts Gain Acceptance, Driven By Sustainability Features.” FoodLogistics. AC Business Media, 26 Sept. 2014. Web. 22 Dec. 2016.
“Electricity Data Browser.” EIA. United States Energy Information Administration, Sept. 2016. Web. 22 Dec. 2016.
“Fuel Cells Market Volume and Revenue Anticipated to Reach 1504005 Units and US$27.25 Bn by 2024.” TransparencyMarketResearch. Transparency Market Research, 21 June 2016. Web. 22 Dec. 2016.
“Global Forklift Battery Market 2016-2020.” ResearchandMarkets. Research and Markets, June 2016. Web. 22 Dec. 2016.
“Global Forklift Battery Market Growth of 8.1% CAGR by 2020 – Analysis, Technologies & Forecasts Report 2016-2020.” BusinessWire. Business Wire, 7 July 2016. Web. 22 Dec. 2016.
“High Demand for Forklift Applications Predicted to Drive the Global Valve Regulated Lead Acid Batteries Market Until 2020, Says Technavio.” BusinessWire. Business Wire, 7 July 2016. Web. 22 Dec. 2016.
“Managing Energy Costs in Warehouses.” BizEnergyAdvisor. E Source Companies LLC., n.d. Web. 22 Dec. 2016.
“Market Intelligence.” IndTrk. Industrial Truck Association, 2015. Web. 22 Dec. 2016.
