What Does it Mean for Market Players?
Chemical companies tend to look at the consumer electronics sector as a lucrative segment, given the supply of raw materials to cell manufacturers aimed at developing batteries for gadgets and devices. An entirely new market opportunity requires a commercial strategy as to how much investment is safe to make in EVs. In addition, frequent amendments in the specifications of EVs also put the confidence of chemical companies at test. However, partnering with lithium-ion battery manufacturers will make it easier for chemical companies to supply raw materials on a demand basis.
As applications of lithium-ion batteries move into a new dimension, battery manufacturers have both, pressure and opportunity on the horizon. With drastic improvements in the demand for lithium-ion batteries ascending from the automotive sector, manufacturers need to prioritize their investments and production facilities as per the RoI potential of the region that they are operating in. Since leading battery manufacturers take a cost competitive and innovation-driven approach, product diversification can be a good bet.
The automotive industry has been undergoing a seismic shift, with electricity being the new default fuel. This has inspired automakers to redefine their business models based on current and future sustainability implications. With a high pick in the number of EV manufacturers, stiff competition can be tackled only by standing out in the market, which will shift focus towards the 'comfort' and 'aesthetics' of electric cars. To achieve this, automakers will seek customized auto parts, which can be achieved through backward integration, acquisition of a battery manufacturer, or a joint collaboration.