How InoBat aims to differentiate itself from VW, Tesla, CATL in the battery cell business
Therefore, the capacity will be insufficient, despite the best efforts of the European Union to avoid this, as the pace of change is faster than anyone expected. What InoBat wants to do is try to shift the market from a supply-driven approach, where cells are developed and automakers have to integrate them, to an approach driven by customer demand. This means that we want to work in partnership with automakers – as well as with commercial vehicle manufacturers, off-road customers and airlines, because all of these industries need to go electric. To do this, we ask ourselves: how to design the best cell? How to customize this cell to meet their needs? So because we’re trying to reverse the model, it’s very difficult to tell you how much of the market we’re going to take. Ultimately, the value lies in these partnerships and the creation of units tailored to the needs of our clients. This is where we create value, so market share becomes less relevant because if you can build partnerships, you also create long term value as well as the ability to develop the market with your customers.
Your rivals in Europe include startups like Northolt in Sweden and British Volt, as well as automakers like Tesla and Volkswagen Group, not to mention established battery cell giants CATL and LG Chem. How will InoBat stand out in such a competitive market?
You are right, there is a transcontinental race for capacity in Europe. In 2019 alone, € 60 billion was invested in battery cells in Europe and this was triple that of China. We anticipate that there are more than enough opportunities for every player. But as we’ve discussed, there isn’t one rule that fits all that says all battery makers will be the same. Some will be very focused on a standardized product that builds an absolute super scale. There are others that will be positioned more to provide a slightly smaller scale but will have a more personalized approach. We’re probably more of the latter group than the first, but that’s what happens as markets mature. As the market grows, the needs are different and these different needs must be met. As a result, we see this need for customization of cells that truly meet the needs of the customer.
How confident are you that car manufacturers based near your factory, Stellantis, Kia, Jaguar Land Rover, will become customers? Is proximity something important in this sector?
Proximity really, really matters. Part of the challenge within the industry itself is the very long supply chains that exist. Obviously, there has to be a significant reduction and compression of this supply chain. This is essential because of the amount of power used, also from a cost point of view, so that the battery costs can be reduced. Therefore, InoBat is working with all clients to assess how it can do this. Proximity is therefore essential, therefore the manufacturers you mentioned on our doorstep are clearly very valuable and potential partners for the future. But I wouldn’t say it’s the only place, because if you think about how and where we’re based, this location in Central Europe gives us a significant advantage in terms of reaching a number of vehicles. Our estimate is that there are approximately 2 million vehicles manufactured within a 500 kilometer radius of where we are based. We are very well placed geographically to support Central Europe, but also Germany, France, Austria, Italy and beyond. We see the opportunity to work with a range of different clients to support the transition to electrification.