The consolidation in the business of making lithium-ion batteries, a key component in electric vehicles, is moving faster than expected – the recent bankruptcy and sale of A123’s automotive operations to JCI just the latest example.
The consulting firm of Roland Berger predicted a consolidation back in 2010. But in an update to the report issued this week, it is saying the shake-out is unfolding faster than expected and predicts only six to eight international players in lithium battery production will remain in the market by 2017.
The move could head off a potentially devastating price war among competitors at a time of unexpectedly slow sales of battery-based vehicles. But for auto manufacturers, that could translate into higher component costs that, in turn, slow the growth in demand for electrified vehicles, some analysts warn.