Emily Hersh is joined by Hamutal Ben Bassat, the VP of Business Development at Nano One Materials Corp. Hamatul discusses the pendulum swing between full specialization at one extreme, and pure vertical integration at the other, and industries oscillate between the two at different points of history.
Hamutal uses the silicon chip industry and IBM's experience to show that companies face a conflict between increasing profit margin and maintaining control.
In the current battery and electric vehicle markets, this is a shift. Traditionally, Auto OEMs have been able to focus on the core competencies of the power train and design, but successfully been able to outsource manufacturing and leverage control while enjoying lower prices.
The rise of the EV is based on the battery, and OEMs have realized that they cannot afford to be so far removed from these supply chains without losing margins.
In a global economy without limitations like tariffs, taxes, and logistics, control isn't necessary and the pendulum swings to towards full specialization. At this point in history however, the pendulum is swinging the other way. Vertical integration driven by complex supply chains and a desire for control are driving EV battery supply chains.