Ricardo Strategic Consulting has published a white paper outlining the processes that investors and automakers should adopt as they evaluate investment opportunities and suppliers in the rapidly developing electric vehicle (EV) battery systems market.
Entitled “A battery of questions for electric vehicle investors”, the white paper sets out the nature of this challenge given the almost complete absence of industry standards for either cell chemistries and performance, or durability and control architectures in battery systems. Those engaging with the market must therefore operate without the kind of benchmarks and detailed technical information that would normally be expected in the established powertrain areas of diesel and gasoline engines.
This situation is further compounded by the relative immaturity and lack of industry experience of EV battery systems suppliers and tangible signs of a gold-rush market mentality, in which numerous young companies are chasing opportunities in different directions, with many as yet unable to fulfill automotive series production quality standards.
Key questions explored briefly by the white paper include:
Does the company have a product that is unique?
Does the company have a clear plan to manage rapid and aggressive cost reduction?
Has the company tested and validated the battery product (cells and pack) for quality and durability performance for both calendar-life and cycle-life on the road, as well as in its own labs?
Has the company tested and validated the product fit to application, and is it clear on the application it is targeting?
Does the company have either a proven track record of smooth but fast volume ramp up, or a technology that has the clear potential to be easily scalable, and a plan to execute such scaling?
Does the company have access to on-going development funding?
Is the company’s intellectual property secure?
For a car maker or an investor looking to put money to work in this dynamic industry by betting on which of the fifty or more existing battery firms will emerge from the shake out—either as a long-term success or a useful acquisition target—the changing commercial environment means that it is no longer enough just to evaluate the technology. The company must be evaluated too—and the same holds true for a buyer of batteries looking to make making intelligent long-term supply choices.—“A battery of questions for electric vehicle investors”