What is the total addressable market (TAM) for a new battery technology in the US market?

Clarification Questions

   - What type of battery technology is it (e.g., lithium-ion, solid-state, flow batteries)?-- Assuming all have potential to replace lithium based batteries

   - What are the primary applications for this battery technology (e.g., consumer electronics, electric vehicles, grid storage, industrial applications)?-- Assuming Consumer electronic, EVs and Grid storages

   - Which market segments are we targeting (e.g., residential, commercial, industrial, automotive)?--> Assuming residential and automative

Approach

• Identify Target Segments
• Gather Market Data using secondary research
• Deriving Formula of TAM--> Number of Units x Average Price per Unit

Identify Target Segments

Based on the answers to the clarification questions, we can identify the primary market segments that will use this new battery technology. For this example, let’s consider 2 key segments:

1. Consumer Electronics

2. Electric Vehicles (EVs)

Gather Market Data

For each target segment, we will gather data on the current market size and growth projections. Reliable sources for this data include industry reports, market research firms, government publications, and financial reports from key players in the market.

1. Consumer Electronics:

   - Total annual sales of consumer electronic devices in the US.

   - Penetration rate of battery-powered devices.

   - Average battery cost per device.

2. Electric Vehicles:

   - Annual sales of electric vehicles in the US.

   - Average battery capacity per vehicle.

   - Projected growth rate of the EV market.

Step 3: Calculate the TAM

For each segment, calculate the TAM using the following formula:

-->  Consumer Electronics:

   - Number of Units: Total number of battery-powered devices sold annually.

   - Average Price per Unit: Average battery cost per device.

TAM_CE = Total Devices x Average Battery Cost per Device

2. Electric Vehicles:

   - Number of Units: Total number of EVs sold annually.

   - Average Price per Unit: Average battery cost per EV.

TAM_EV = Total Evs X Average Battery Cost per EV

Sum the TAM for All Segments

Total TAM= TAM_CE + TAM_EV +TAM_GS

Considering CE market is around 8.2 billion considering every person is carrying one of other form of consumer electronic device.

The device is expected to grow 10% in next 4 years which makes around 9 billion. For US household, let's assume the population of 300 Million and every one carries atleast 2 consumer electronic device.

Average battrey cost is around $5  which makes (TAM_CE) for US= 0.6 billion x $5--> $3 Billion

For EVs, the volume is around 1.5 million in 2023 and cost is ranging between $6000 to $20000. For calculation, let's assume average it to $10000

(TAM_EV) for US= 1.6 Million x $10000--> $16 Billion

Total TAM--> $3 Billion + $16 billion--> $19 Billion