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Battery Industry Supply Chain Consolidation and Cooperation Trends

published: 2011-07-08 11:48

The development of the battery industry has a historical role in satisfying internal needs particularly in Japan. In Japan, the battery business has become a dispensable part of the corporation through diversified business practices. In addition, strategic cooperation among manufacturers in the supply chain has become a means of formation of a new battery company.

Diversification and Vertical Integration
In order to satisfy internal needs from development of various electronics, Sanyo Electric Co., Toshiba and LG Chemical started battery division responsible for research, development and production of batteries as part of the company’s core business.

Formation of New Companies through Strategic Alliances within Supply Chain
Power battery is the heart of an electric vehicle. Without stable and reliable supply of power batteries, the mass production of electric vehicles would be practically impossible. Hence, a combination of technology advantages from both battery manufacturers and auto makers makes perfect sense for risk diversification and technology enhancement purposes. Panasonic EV Energy Co. is an example of a cooperation between Toyota Motor and Panasonic, providing mainly NiMH batteries for EVs developed by Toyota Motor.

As early as in December of 2007, GS Yuasa established a joint venture with Mitsubishi to form Lithium Energy Japan and another other joint venture with Honda to form Blue Energy Co. in April of 2009.

Recently, Toshiba has also reached an agreement with Mitsubishi to become a supplier of rechargeable battery, known as SCiB, used for i-MiEV and MINICAB-MiEV, two new models of electric vehicles by Mitsubishi Motor. According to Mitsubishi, SCiB has the advantage of long lifespan, fast charge, and lower charge temperature all of which make it suitable for electric vehicles.

Traditionally, Japanese makers are the main market dominants. However, spotting enormous opportunity in this field, a number of countries including South Korea, China, and America are accelerating their investment in developing battery technology, trying to catch up with the Japan.

Korean battery makers are aggressively racing for global market share. SDI claimed it will acquire 30% of market share while LG Chemical aimed at 20% or above by 2015. Notably, LG Chemical has decided to partner with General Motor to be the sole supplier power battery for Chevorlet which was introduced to the market in the end of 2010. On the other hand, LG Chemical has started to supply lithium-ion batteries to Hyundai Motor’s hybrid electric vehicles.

The table below lists a number of battery suppliers to automakers through various cooperative means including but not limited to direct capital investment, and procurement or co-development, JV formation.

Cooperative Battery Makers Auto Makers
Automotive Energy Supply Nissan
Blue Energy Honda
HitachiVehicle Energy Mitsubishi Motor, GM
Lithium Energy Japan Mitsubishi Motor
Panasonic EV Co. Tesla
Sanyo Electric Co. Volkswagen, Toyota, Suzuki
Toshiba Volkswagen, Honda, Mitsubishi Motor
LG Chemical GM, Hyundai
Johnson Controls-Saft Ford

Source: EnergyTrend

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