Bosch Surprises By Dropping Idea Of Battery Cell Production — What Does That Mean For Bosch? For Batteries?
Bosch is pretty much everywhere when it comes to mobility, and that’s particularly true with the electric vehicle (EV) sector. But one thing the global giant has shied away from so far is manufacturing its own batteries. It just announced it won’t pursue that route any longer.
Bosch Drops Manufacturing Batteries
From electric bicycles (e-bikes) to just about any car component, Bosch is there. And the multi-national company also has many interests outside electric motors and EVs. But one thing it did toy with for awhile but apparently drop was building its own battery manufacturing facility. Unfortunately, the world’s biggest automotive supplier announced it has now abandoned the idea, presumably because it’s just too big an undertaking with too much competition and not enough probably benefit. Indeed, the reason referenced by the company this week was that it represented unjustifiable risky investments, which the company opted against at the last minute.
Bosch does put together battery packs, it should be noted. This decision was about also producing the battery cells.
According to Reuters: “The question of (battery) cell production is not a question of technology, it’s an economic question that needs to make economic sense,” Those words were spoken by Rolf Bulander, head of mobility solutions at Bosch. He further added: “We will continue to buy cells from suppliers.”
From another Reuters report we referenced this week: “Bosch had said it would only consider making battery cells if there was a chance it could capture a fifth of that market by 2030, a move it said would require about €20 billion ($24 billion) of investment to create 200 gigawatt hours of capacity.”
“In the overall interest of the company, such an investment is not justifiable,” explained Rolf Bulander, the head of mobility solutions at the firm, on a conference call discussing the matter. “For new entrants, market conditions are more than challenging.”
Bosch & The Future of E-Mobility
The question as to whether Bosch needs to compete with its Asian rivals is difficult to estimate. On the one hand, Bosch’s multi-foothold across several industries is enviable for many companies. But on the other, it does it make sense to invest in the production of batteries when dealing with this kind of industry. Also, considering that the first players are barely getting into the game now, that would give Bosch an arm and leg up.
Last year, Bosch said the decision would depend on whether it could beat its competition with better and cheaper batteries to the market. The competition is obviously Samsung, LG Chem, and Panasonic.
To this day, the Bosch Group displays Rexroth as part of its conglomerate. The manufacturer of batteries certainly can come in handy but operates in too much of a niche market to satisfy the needs of a global market. Perhaps it feels it can use it later for the purpose of global scale battery production.
So far, Bosch doesn’t have to worry much about where the industries of tomorrow are coming from. It is so intelligently diversified across the mobility industry that it will always have a place to land back on in case of emergencies. It can safely adapt to most trends and should be able to weather most financial crisis.
As far as battery production itself, it seems that Bosch’s decision to not enter the market is a sign that the market is hyper competitive, growing at a necessary rate, able to meet coming demand, and extremely hard to break into at this point. Maybe. We’ll see what Northvolt and Kreisel are able to pull off.
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