Powertrain 2020 - The Future Drives Electric (PDF ... - Roland Berger

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At the same time, key European suppliers such as Bosch and Continental
are increasing research in this area in an attempt to counterbalance Asian
dominance.
Existing players (excepting those in Asia) essentially have to start from
scratch when it comes to developing the new electrified components and
systems. This makes it much easier for new players to gain a foothold in
the market than was previously the case in the highly mature automotive
component market.
Indeed, a number of new players such as A123, Litec and Tesla are already
offering innovative technologies in specific components, trying to gain a
share of the attractive revenues in this section of the value chain. The task
facing them is a challenging one for two reasons: strong reactions are
expected from incumbents, and heavy up-front investments are required
in this field.
Battery cells have a number of different potential chemical compositions.
Moreover, safety requirements often conflict with performance requirements.
The R&D expenses and production investments involved are also
enormous. Only the strongest players will be able to achieve the required
economies of scale. This is likely to result in a first supplier concentration
process, similar to that found in the semiconductor industry.
Other key components such as electric motors and power electronics also
require large up-front investments and rely on companies tapping into
economies of scale. Consequently innovative new players are more likely
to enter on the software side and in specialized market niches.
4.3.3 Strategic partnerships
OEMs must try to identify strategic partners with the expertise and solid
finncial backing required to secure access to technological know-how. The
joint ventures mentioned below, such as LiTech between Daimler and
Evonik in Germany, are good examples of such attempts.