Navigating the EV Battery Supply Chain: Strategies for Auto OEMs

Jun 16, 2023

Based on the expected growth of electric vehicle (“EV”) demand and investments by Auto OEMs in vehicle electrification, EV battery production has elevated as a critical strategic supply chain challenge for car makers. The OEMs have pursued varying strategies / partnerships to mitigate supply risk, with three primary strategies emerging: A) single-region / single-source supplier partnership (e.g., Ford, Mitsubishi), B) multi-region / diversified supply (e.g., VW, GM), and C) vertical integration of battery production (BYD, Tesla).

As EV battery production CapEx build-out occurs over the next 5-10 years, Auto OEMs will continue to assess supply strategies and options to ensure adequate / stable supply across their global production footprint, which may be achieved via strategic partnership with battery producers, equity investments / joint ventures, or potential vertical integration by more Auto OEMs.