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.
