(Photo by Brian Snelson on Flickr)
The latest news in the electric vehicle market has revolved around new battery technology rather than vehicle designs. A group of American battery manufacturers and affiliated companies including 3M and Johnson Controls formed the National Alliance for Advanced Transportation Battery Cell Manufacture recently. This lobbying group will seek at least $1 billion in funding from the incoming Obama administration to advance America’s ability to produce hybrids and all-electric cars. One reason why this consortium was created is the recent announcement by Panasonic that it is buying Sanyo for $9 billion.
The Panasonic-Sanyo merger allows the former company to absorb new technologies produced by the latter. Sanyo has developed advanced solar voltaic cells and modules that are intended for use in the next generation of green vehicles. The company also announced plans to open a battery manufacturing plant in Oregon by fall 2009, which will be continued by Panasonic.
Panasonic instantly increases its credibility as an international leader in EV and PHEV battery manufacturing by purchasing Sanyo. While Panasonic held 10% of the rechargeable battery market in 2007, the Japanese company stands to hold at least 38% of this market by the time this purchase is closed in February 2009. In announcing the proposed purchase of Sanyo, Panasonic executives indicated that they are interested in further PHEV and EV battery development.
The Sanyo deal allows Panasonic to follow several avenues in the alternative vehicle market. Panasonic currently supplies Toyota with NiMH batteries for Toyota’s Prius and Camry Hybrid models. The company wants to produce batteries for additional Toyota models as well as plug-in hybrids in development by Honda and Ford. Panasonic also has a research partnership with Volkswagen for next-generation batteries that will benefit from the acquisition of Sanyo’s assets.
The conflict between American and international battery makers shows a shift in tensions within the global auto industry. Instead of higher-level conflicts between Toyota, Ford and Volkswagen, the primary tension in the world of alternative cars is the allegiance between parts manufacturers and automakers. We will see auto executives at Honda, Ford, GM, Toyota and other companies figure out their priorities as business people. In order to create a competitive market for EVs and PHEVs, every company will have to select a battery supplier based on economics rather than blind patriotism.
