Acquisition of battery companies

The pace is hotting up. As the lithium-ion battery business grows rapidly over the coming 15 years a vital way of buying time, clout in purchasing materials, routes to market, technology, economy of scale and brand awareness will be acquisitions. Add the motivation of electric vehicle makers wanting to acquire technology that forms part of their vehicle unique selling proposition. The new IDTechEx Research report, Lithium-ion Batteries 2016-2026 looks at this in detail including what happens to over 400 cell makers and rising.

 

French oil and gas company Total has acquired industrial and military battery maker SAFT for $1.1bn as it moves to invest in clean energy. SAFT also sells hybrid supercapacitor-battery devices but they are nickel based, not of mainstream supercapacitor potential. Total already has the $4bn Hutchinson subsidiary in vehicle mechanical parts that has researched large supercapacitors and batteries for electric vehicles. In supercapacitors it has aqueous electrolyte technology key to making them non-toxic and non-flammable.

Total paid a 38 percent premium for SAFT following Borg Warner buying electric vehicle motor manufacturer Remy to "go electric" for a similar price and premium. Yes, another reason for acquisition of lithium-ion battery manufacturers will be investors spotting that the More Electric Aircraft (MEA) and the electric car are attracting tens of billions of dollars of sales now and are part of a megatrend: they want their investment portfolios to "go electric". It is emotive that the automotive division of Eindhoven University of Technology is part of the Electrical Engineering Faculty. Others will follow.

It is expensive to buy the future but the alternative is worse if you are a giant facing saturating or declining markets. Declining Apple, now researching electric vehicles, vacuums up future battery intellectual property such as that of failed Infinite Power Technology and, like Google, invest heavily in electric vehicle research. Google bought Makhani, a company flying huge tethered electric aircraft in the hope of generating megawatts with the aid of huge batteries and it studies autonomous solar aircraft with large lithium-ion batteries that will beam the internet to another billion people. It has the autonomous pure electric cars as well. Dyson, the world's largest vacuum cleaner company paid well for future battery company Sakti3 this year because it is interested in making electric vehicles now. Indeed, its robot vacuum cleaner is a form of electric vehicle using a Li-ion traction battery, so it can work up from there but it may never want to sell batteries.

A123 Systems, a US-based EV Li-ion battery maker bought by Wanxiang Group of China has contracts with five Chinese auto makers for the new mild hybrid 48-volt Li-ion batteries shipping this year. It sees all major Chinese auto makers on or sourcing 48-volt batteries phasing in over the next three years. By 2020 a substantial percentage of all new vehicles in China will have them they say. This aligns with the forecasts in the new IDTechEx Research report, Mild Hybrid 48V Vehicles 2016-2031 which gives detailed new roadmaps.

 

 

Certainly Chinese companies will be racing to buy companies with key products for the 48V evolution over the coming decade such as electric superchargers and back axle motor generators. Include those batteries because they will proliferate in different forms despite lithium-ion versions being chosen for all the first versions in 2017. Huanghua is buying electric bus companies: it placed a $1bn order on XALT for the Li-ion batteries but China apparently intends to remove subsidies to the vehicles using them thus cutting off imports in the false name of safety. Despite this, Panasonic has just set up a joint venture in China to make similar Li-ion batteries with NMC cathodes for higher energy density as used in leading electric cars globally. Tantech Holdings Ltd. in charcoal products acquired Suzhou E Motors this year, a specialty electric vehicles manufacturer. IDTechEx advises on acquisitions in the EV industry.

There is now work on B Category cars with 48V systems to follow their rollout for larger cars in 2017. Here the price is very critical so lead acid batteries are being considered. That varies from the lightweighted, value engineered conventional lead technology of Energy Power Systems in the USA which was first with an appropriate single unit to advanced lead acid batteries (ALAB) using carbon and the hybrid supercapacitors that are part supercapacitor. Perhaps someone will buy the lead acid leaders but much more acquisition focus will be on lithium.