New investment activity could create annual demand for three million battery electric cars, generating over $1.1 billion of new semiconductor demand, according to a Strategy Analytics report, “Battery Electric Vehicles: Will New Activity Drive Market Out Of Niche?

Without new breakthroughs in business models and technology, however, the demand for battery electric cars will amount to fewer than 500,000 units a year by 2015. Kevin Mak, industry analyst in Strategy Analytics’ Automotive Electronics Service and author of the report, said electric vehicle market growth is driven in part by increasingly onerous mandates on fleet fuel economy and on carbon dioxide emissions, as well as consumer demand for more environmentally compatible vehicles.