Will Merger Activity Dominate the Electric Vehicle Market?

Will merger activity dominate the electric vehicle market?
Will merger activity dominate the electric vehicle market?

It is sometimes easy to forget how far the electric vehicle market has come in such a short space of time. It was less than a decade ago that many were writing off the industry as yet another “busted flush” amid signs that the momentum built just after the turn-of-the-century, was beginning to fade. However, a mixture of enormous investment by corporate entities, improving technology and, perhaps most importantly, the introduction of government financial assistance seem to have been the turning points.

Now that the industry is firmly headed towards the mainstream, will we see an array of mergers and acquisitions in the electric vehicle market?

Partnerships are a plenty

There are many informal partnerships across the electric vehicle market, including the likes of Tesla/Panasonic and Apple/BMW to name but a couple. While many people assumed that Steve Jobs had plans to merge Tesla and Apple, it seems that Apple is now looking elsewhere after his untimely death. This in many ways perfectly illustrates the cutthroat nature of the electric car market which has come from nowhere to be one of the more prominent automobile/technology sectors of the moment.

There have been rumours and counter rumours about further partnerships across the industry looking to bring together pure electric vehicle companies and battery technology specialists. This makes perfect sense in the longer term, especially when you bear in mind the enormous size of traditional automobile companies.

Is technology now the name of the game?

While car companies such as Tesla continue to work on new designs and new materials for their vehicles, it is perhaps the area of technology which will dominate the future. Even though Tesla is a company which is quite capable of keeping all research and development in-house, it does make sense to take advantage of third-party expertise. This is why the likes of Panasonic were brought in to develop Tesla’s future range of batteries while the company continues to squeeze every last drop of energy from its vehicles.

The future of the electric vehicle market is very much in the hands of the battery companies as well as the recharging networks. Even though the introduction of home charging systems has taken away much of the “journey anxiety” of years gone by, we still need a network of quick charging stations.

Can we expect some big mergers in the future?

There is no doubt the future will see a number of large mergers going through to focus upon the electric car market. We have seen this in other new technology sectors such as electronic cigarettes and you can bet your bottom dollar that this will be replicated in the electric car market. Whether these mergers and acquisitions will see various elements of larger groups brought under one joint venture umbrella remains to be seen but there is certainly space for a number of large EV entities in this growing field.

Even the most ardent of critics now readily admit that the electric vehicle market is here to stay and while new technologies such as hydrogen cells continue to grab the headlines, they have yet to deliver; new fuel technology such as hydrogen cells could easily be used in modern day electric vehicles with minimal changes. We are moving towards a major stage of the development of the electric vehicle market and while the U.S. will no doubt dominate in the short to medium term,t his is still a relatively new market and there is scope for new entrants to emerge.