Electric Vehicle Race: Joint Ventures and Partnerships Drive Performance

With an increasing shift to electric vehicles over the past decade, the automotive industry is experiencing its biggest revolution since the Ford Motor Co. introduced the mass-produced Model T in 1908.

Experts are now predicting high-speed adoption of electric vehicles over the next decade, driven by shifting preferences, climate change concerns, volatile gasoline prices and aggressive public policies such as California’s Next Ban on sales of new gasoline vehicles. By 2030, the share of electrified vehicles could account for up to half of new vehicle sales.

And that means the race is on for automakers to design winning vehicles, endlessly source battery raw materials and deliver financial performance. Companies that dominate the pack don’t do it alone, they rely on joint ventures and strategic partnerships. In fact, the automotive industry associates at rates surpassed by only a handful of other industries.

A new analysis of more than 300 auto industry joint ventures and partnerships shows a rapid increase in deal volumes, with an increase nearly tripling in the 18 months from January 2021 to June 2022 compared to previous years.

Electric vehicles have generated 56% of new joint venture and partnership activity since 2016, driven primarily by deals related to the battery, the largest, costliest and most complex component of an electric vehicle. Companies such as Ford, General Engines and the Volkswagen Group are teaming up at blistering rates for ssecure supplies of critical battery materials such as lithium, while accelerating the commercialization of solid-state battery technology, building networks of charging stations, recycling used batteries and, most importantly, ensuring guaranteed access to battery volumes in exchange for sharing the cost of multi-billion dollar investment from large corporations. large-scale production plants. For GM, that meant a joint venture with LGUltium Cells, to build three battery factories in the United States, each with more than $2 billion in investments, while Ford is pursuing a similar path with SK Industriesincluding several JV factories in the United States and Turkey.

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