Battery and Energy Storage Partnerships: Powering an Industry

December 2021 – Batteries and other forms of electric storage are becoming more powerful every day. They are now used in our electric grids with the rise of utility-scale battery systems and in electric vehicles, including in hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs). The creation and improvement of these new energy storage types and applications has caused a flurry of deal activity and, in particular, many joint ventures and partnerships (Exhibit 1). In the last three years alone, our JV Index, which tracks the largest, most material JV announcements globally, included 43 material partnership announcements specifically related to batteries and energy storage, not including partnerships related to electric vehicles or renewable energy more broadly.

Indeed, in the electric vehicle (EV) space, rising demand for electric vehicles and intense competition for market share has spurred many collaborations across the entire battery value chain. On one extreme, partnerships are addressing the shortage of raw materials required for energy storage. GM, for instance, is investing in one of the U.S.’s largest lithium projects to ensure the auto maker has its own source of the critical battery material. At the other extreme, companies aim to achieve the best approach for collecting and disassembling end-of-life EV batteries, like Redwood Materials and Ford, who started working together to use Redwood’s lithium-ion battery recycling technology to build a sustainable battery supply chain in the U.S. for Ford’s electric vehicles. In between are all manner of partnerships, including research and development of new battery technology, manufacturing of battery components and fuel cells, and integration into EVs. We have seen particular activity in battery manufacturing ventures, including Tesla and Panasonic, Geely Auto and LG Chem, Volkswagen and SK Innovation, and Toyota and CATL.

The same partnering rush has been seen in the energy storage, where companies are coming together at various stages in the value chain, from extracting raw materials to recycling utility-scale energy storage systems. Sustainable energy leader Vestas and battery manufacturer Northvolt have set up an R&D partnership to develop a lithium-ion battery storage solution to be deployed in wind power projects. Canadian resource recovery Li-Cycle has partnered with U.S.-based Renewance, a battery management company, to deliver a safe, sustainable, and cost-effective lithium-ion battery recycling solution for end-of-life energy storage systems. We foresee high partnership deal flow in the energy storage sector, particularly in Europe as the continent tries to increase its battery-manufacturing capacity to reduce reliance on imports.

Regardless of their position in the battery value chain, these energy storage partnerships span across various types of proven or potential energy storage solutions, from lithium-ion and lithium polymer batteries to the nickel-metal hydride batteries used in hybrid electric vehicles and to lead-acid batteries. For example, Germany’s BASF partnered with Cellforce, itself a JV between Porsche and Customcells, this summer to develop high-performing lithium-ion batteries for electric vehicles. Around the same time, American energy storage solutions provider, ESS, and Slovakian energy equipment supplier, InoBat, partnered to grow the presence of iron-flow battery technology and to establish R&D capabilities in Central and Eastern Europe. Fuel cell partnerships are also in the mix such as the alliance between Ballard and Linamar to develop fuel cell solutions for light-duty vehicles. The uncertainty regarding which of these technologies will take off and grow in market share in the coming years makes for interesting negotiations in these partnerships, with some partners willing to bet the company on a specific technology while others negotiate to hedge their bets.

There are endless partnering possibilities: among competitors, between automakers and battery suppliers, and even with governments, non-profits, and research institutions. Competitors Piaggio, KTM, Honda, and Yamaha set up swappable batteries consortium to develop common technical specifications for two-wheeled electric vehicles. Traditional automotive companies are pairing off with battery makers. For example, Volkswagen, took a stake in battery cell maker Northvolt. Volvo similarly formed a partnership with Northvolt. And Daimler bought a 33% stake in battery cells manufacturer Automotive Cells Company (ACC). These types of automotive-battery supplier partnerships are not new. In fact, Tesla formed a joint venture with Panasonic back in 2014 to build a “gigafactory” in the U.S. to manufacture batteries for Tesla cars.

Public-private partnerships are also on the rise. The European Batteries Partnership, for example, includes a wide range of European industrial and commercial companies, universities, research institutions, and trade associations and aims to support the creation of a competitive and sustainable battery industrial value chain in Europe. In the U.S., the Department of Energy is planning to launch new public-private partnerships to drive down battery costs and decarbonize the transportation sector. University of California San Diego is partnering with American engine maker, Cummins, to establish a multi-year partnership related to the reuse and repurposing of EV batteries.

So regardless of the place in the value chain, application where the battery will be used, battery technology, or type of partner, joint ventures and partnerships are playing a critical role in the development and commercialization of energy storage solutions. Ankura’s Joint Venture & Partnership practice helps set up, improve, and trouble shoot these dynamic and vibrant partnerships. Interested in learning more? Contact us.

How We Help: Trends

We understand that succeeding in joint ventures and partnerships requires a blend of hard facts and analysis, with an ability to align partners around a common vision and practical solutions that reflect their different interests and constraints. Our team is composed of strategy consultants, transaction attorneys, and investment bankers with significant experience on joint ventures and partnerships – reflecting the unique skillset required to design and evolve these ventures. We also bring an unrivaled database of deal terms and governance practices in joint ventures and partnerships, as well as proprietary standards, which allow us to benchmark transaction structures and existing ventures, and thus better identify and build alignment around gaps and potential solutions. Contact us to learn more about how we can help you.

About the Authors

Tracy Branding Pyle

Tracy Branding Pyle is a Managing Director at Ankura who specializes in helping organizations navigate complex transactions, and, in particular, joint venture-related transactions. She works with a wide array of U.S. and international companies across industries to help them structure, negotiate, approve, and launch joint ventures to set these ventures up for success. She additionally advises on governance of individual joint ventures and portfolios of joint ventures to help companies to minimize risk, increase efficiencies, and find value. Prior to joining Ankura, Tracy practiced law at Hogan Lovells, where she advised clients on joint ventures, public and private mergers and acquisitions, and corporate governance matters. Tracy is based in Washington, DC.

Marta Bayarte

Marta Bayarte is a Director at Ankura based in London. Marta draws on her international experience and investment banking background to support clients across different geographies as well as industries, with special focus on the oil and gas sector. She has advised clients at all stages of their joint venture cycle, from the early phase structuring of potential new partnerships through to reviewing the performance of mature JV portfolios. Marta speaks five languages and is originally from Spain.


Leave a comment

Your email address will not be published. Required fields are marked *

Subscribe to the

Joint Venture Alchemist Newsletter

Sign up below to receive the latest joint venture updates from Ankura.

"*" indicates required fields