The market for advanced Hybrid Electric Vehicle (HEV) batteries will grow from US$70 million this year to $250 million by 2005, and will top $500 million by 2009, according to the 2001 Advanced Automotive Battery Industry Report.OREGON HOUSE, California, US, 2001-10-22 [SolarAccess.com]. Hybrid electric vehicles combine an internal combustion engine with a small electric motor and a battery, and are finding commercial acceptance as an effective measure in combating global warming and pollution, as well as reducing dependence on fossil fuels without adversely affecting performance. HEVs are likely to receive U.S. federal tax credits. A key to the widespread commercialization of HEVs is the availability of an affordable, long-life battery. Nickel Metal Hydride (NiMH) is the incumbent technology due to its longevity under heavy usage. However, at an OEM cost of $500 to $2,000 per HEV battery pack, and with a life expectancy of 5 to 8 years, NiMH batteries are expensive for automakers. Lead-acid batteries are more affordable, but last only two years under typical HEV duty. The study examines other advanced batteries, including Lithium Ion which is popular in laptop computers and cell phones, to provide sufficient value to compete for this market in the future. The study also discusses the plans of major automakers and their battery suppliers. Toyota, Honda, Ford, and PSA (Peugeot) are leading the commercialization of HEVs, but most other major automakers expect to offer them commercially by 2006. Three Japanese battery producers, Panasonic, Sanyo and Japan Storage Battery, as well as the French battery producer Saft, have been awarded production contracts for HEV batteries from the major automakers. Panasonic EV Energy, a joint venture between Panasonic and Toyota, expects to retain half of the market share for several years while the others establish production capability. The consulting firm Advanced Automotive Batteries conducted 40 interviews with key industry players, including major automakers, automotive system suppliers and battery producers.