Blog: Dave LeggettTake your partners please...

Dave Leggett | 1 September 2011

A strong theme that has emerged in the electric drive sector of the auto industry lately is that of strategic partnerships. For example, Ford and Toyota have said that they will work together on future hybrid technology.

Electric drive technology does not come cheap, so by working together on a system the two partners ought to be able to utilise their respective 'best bits' to create a strong and robust technology platform while also sharing costs. That's fine, but the surprising thing to me is that Toyota, a clear leader in this area, is prepared to collaborate with a rival. I guess it's a sign of how things are at Toyota these days. The evolving relationship between Ford and Toyota will be an interesting one to watch.

General Motors has also announced a strategic tie-up in the area of electric drive. This time the partner is not an OEM, but a South Korean conglomerate, LG, with fingers in plenty of pies (though it does not make vehicles). The two will work together on a range of future electric vehicles, LG's broadening role being that of battery specialist and technology integrator/facilitator.

I would expect to see more partnerships of this type springing up – selective tie-ups between OEMs, perhaps also embracing battery specialists and Tier 1s, but also with the possibility of non-automotive partners (and brands) being identified.

Hybrids and pure electric vehicles may not be taking over completely, but they will be undoubtedly become much more important and influential over the next ten years. The technology is very expensive to develop and there are potentially big competitive gains to be made by pushing the envelope on efficiency and performance. The conditions are set for collaborative ventures. And now is the time to be putting in place strategic relationships that will bear fruit in the second half of this decade. Watch that space.


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