Electric Car Batteries: Buying or Manufacturing?

Electric Car Batteries:
Buying or Manufacturing?

It is clear as a day; car manufacturers are leaning more towards clean technologies and developing electric car models is nowadays a must. 

Besides the ever-growing concerns about global warming, fossil fuels, and the stronger regulations being set in place, certain countries are making serious moves. The US largest car market, California, declared that it will cease the sale of new cars powered by gasoline and diesel by the year 2035. Even though that year sounds like very much far off in the future, it is just 15 years from now.

If they want to stay on top of the game, manufacturers need to find ways in making their electric cars and their components the best possible. Not only that, but they need to stay informed when it comes to the newest technologies.

And what is the most important component of an electric car? An electric car battery, of course.

Opting for the Manufacturing 

Electric car batteries are the most expensive components. Deciding to invest in starting your own production line is a brave move, but in the long run, it may pay off handsomely. Developing the car batteries exclusively for your own car models can also help in achieving the exclusivity.

Tesla and Panasonic joined their forces four years ago by opening their Gigafactory 1 in Nevada. They are developing lithium-ion batteries for Tesla models. However, Tesla is still buying necessary cells for the batteries packs from Panasonic and other suppliers. Elon Musk, Tesla’s Chief Executive, announced that Tesla is working on its own cell technology to keep up with the customers’ demands

Following Tesla’s footsteps, General Motors teamed up with LG Chem and invested in building a factory in Ohio for battery cells. Meanwhile in Europe, Volkswagen invested in Northvolt AB startup. Part of their long term plan is to eventually open a battery cell factory, as well.

Buying Batteries: An Easy Way Out?

While these companies decided to invest heavily into developing their own technologies and production of car batteries, others decided to turn towards suppliers only. Companies like Ford and Daimler have put their trust into specialists and they are not getting their manpower involved into innovations.

Even though this choice may put these companies at the mercy of their suppliers, it can turn out to be a smart business decision. Technologies are prone to fast changes and adapting to them can cause serious issues and economic loss. 

Deciding what is the priority for these big companies is the first step when choosing whether to fund car production or to invest in battery technology. 

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