Once peripheral technologies take center stage in new Freedonia research

Two recent studies by The Freedonia Group anticipate continued growth in demand for fuel cell and 3D printing technologies. According to the international business research company, US demand for battery and fuel cell materials is expected to grow 4.3% annually through 2017 to $6.1 billion, and world demand for 3D printers, related materials and software is projected to rise 21% per year to $5.0 billion in 2017.

Lead-acid, lithium-ion and fuel cells
In a recent interview, Freedonia analyst Nick Cunningham said fuel cell technology has been making steady gains in materials handling and other applications, despite its faltering history. “It’s always about 10 years from breaking through, and they’ve been saying that for 50 years,” said Cunningham, who said the largest setback right now is the use of platinum as a catalyst for the types of fuel cell engines used in lift trucks and cars. “The performance gains are widely accepted. Everyone agrees it can be more efficient than lead-acid battery alternatives, but the cost problem is holding it back.”

Cunningham said scientists are looking for a different catalyst, but there’s no telling when that breakthrough might come. If it does, or if platinum comes down in price, Cunningham predicted further penetration of fuel cells into material handling applications. For now, the Freedonia report predicts the fuel cell segment will “rise at a rapid double-digit annual pace due to the increasing adoption of fuel cells in electrical generation and industrial/motive power applications.”

However, lithium-ion alternatives to lead-acid batteries have already experienced a definite cost breakthrough, Cunningham said. “The cost per hour has fallen dramatically, but the extent of lithium-ion’s popularity will depend on the initial cost, which remains high,” Cunningham said. “Now it seems like much better performance at a much higher cost, but it will be interesting if it moves to much greater performance for a little more cost. I feel much more bullish about the prospects for lithium-ion.”

The performance benefits of lithium-ion over lead-acid batteries are actually similar to fuel cells, he said, and although lithium-ion is more expensive up front, the total cost of ownership will be appealing to many businesses.

3D printing, or additive manufacturing
The appeal of 3D printing, on the other hand, remains robust, even if the real-world applications are still largely undefined. According to the Freedonia report, professional uses such as prototyping will continue to account for the majority of demand, but the more rapid growth will be seen in production and consumer applications. The US will remain by far the largest national 3D printing market in the world, accounting for 42% of global sales by 2017.

“3D printers will increasingly be used to manufacture direct production parts and finished goods in a wide variety of applications,” the report continues. “In the consumer segment, projected price drops in desktop 3D printers (helped by the upcoming expiration of patents) will motivate purchases by hobbyists for at home use.”

3D printing, also known as additive manufacturing, allows solid objects to be built from a series of layers using plastic, metal, or other materials. This technology can thereby produce sophisticated structures with less waste compared to traditional manufacturing techniques which require longer setup times and higher material and labor costs. The technology has been around for 25 years, according to Freedonia analyst Pauline Tung, but like LEDs and solar technology before it, the meteoric rise of 3D printing is in large part due to governments’ financial support.

“Government subsidies in the US and Europe drove massive growth in production and consumer adoption of solar energy – until the subsidies ended,” said Tung in a recent interview. “In recent years, the government has zeroed in on 3d printing as a potential remedy to domestic manufacturing losses. As such, the government has invested tens of millions in 3D printing, but it is unclear if industrial growth of 3D printing methods will continue to grow as rapidly if the government withdraws its financial support.”

Even by 2017, 3D printing will only account for a miniscule share of manufacturing output, said Tung. “Nonetheless, the use of 3D printing can impart significant cost savings to manufacturers and usage will increase,” she said. “We do not see 3D printing as a threat to traditional high-volume manufacturing and by extension its supply chain, but the technology is certainly competitive in lower volume production runs that feature very complex design elements. In those scenarios, some sub-component suppliers could be supplanted as the need for them is eliminated.”

For instance, after installing additive manufacturing methods in October 2013, a manufacturer of parts for household appliances and commercial vehicles said it has reduced prototyping and production costs by more than 90%. Also in the fall of 2013, General Electric’s (GE) Aviation division, the world’s largest manufacturer of jet engines, announced plans to use 3D printing technology to produce 85,000 jet fuel nozzles for its LEAP engines.