EnerSys has 10,000+ customers in over 100 countries
EnerSys recycles 99% of its lead-acid batteries
#1 worldwide market share in batteries for electric forklifts and other commercial vehicles
The Path to Drawdown: Batteries for Electric Vehicles
The first electric vehicle (EV) prototype was built in the early 1800s, but internal combustion engines dominated the automotive and transport landscape ever since because of EVs’ inability to overcome the challenge of building a lightweight, durable battery with adequate range.
Today, that picture is changing. Thanks to supportive policies and declining costs, there are millions of EVs on the road. The difference in their climate impact is remarkable. Compared to internal combustion engine vehicles, emissions drop by 50% if an EV’s power comes from the conventional power grid. If powered by solar energy, emissions are cut by 95%. Once households purchase EVs, costs to operate and maintain those cars are often cheaper than gas-based cars, too.
What used to be an obstacle for EVs -- the question of how far the car can travel on a single charge -- is now much less of a concern. The average range of an EV produced in 2020 is about 217.5 miles, up from 124 miles in 2015.
What’s making this increase in mileage possible is the progress in battery technology and growth in battery production capacity. The cost of batteries is falling fast as a result. The cost of lithium-ion batteries in particular -- the key technology for electrifying transport -- has declined sharply in recent years after having been developed for widespread use in consumer electronics.
But battery production needs to continue scaling massively to keep up with the electrification of transport. According to the IEA:
- Global manufacturing operations produced 170 GWh of batteries in 2020
- ~3,000 GWh battery production capacity is needed by 2030 to achieve long-term sustainability goals
- That’s CAGR of 33.25%
EnerSys (stock ticker: ENS) is a stored energy systems and technology provider for industrial applications. They make and distribute reserve power and motive power batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure systems to customers worldwide. Headquartered in Reading, Pennsylvania, they provide aftermarket and customer support services to customers from over 100 countries.
ENS's Role in Drawdown
Almost half of EnerSys’ revenue comes from selling energy solutions to transport industries, particularly to industrial forklift, mining and other commercial utility vehicle companies. These solutions include lithium-ion batteries, chargers, monitoring and data analysis systems to enhance productivity.
Beyond energy storage products for these commercial utility vehicles, EnerSys also offers energy storage solutions for grid-interactive systems, off-grid systems, and industrial power and utilities. All of these are important Drawdown solutions that help electrify both the transportation and utility industries. In total, EnerSys’ sales revenue has been growing steadily, increasing by 5.22% annually between 2016 and 2020.
ENS: What We Like
EnerSys has a very diverse customer base (p. 7), with over 10,000 customers in over 100 countries. So they're not overly dependent on any particular end market. No single customer accounts for more than 10% of its revenues. The markets EnerSys serves include telecommunications, UPS, electric utilities, security systems, emergency lighting, services to broadband, renewable and industrial, thermally managed cabinets and enclosures for electronic equipment and batteries. This diversity means that EnerSys’s revenue base is resilient against business cycles and decarbonization.
We also love that EnerSys has a complete battery recycling program. EnerSys personnel pick up spent lead-acid batteries regardless of their size, quantity or manufacturer. This kind of programs ensure that used batteries are not mishandled or improperly disposed of so that they don’t harm the environment. This is the kind of circular economy business model that we want to see other companies adopt.