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Evaluation of Make or Buy Approaches for Batteries Used in Electric Cars: A Comprehensive Make-Buy Analysis With Qualitative Factors Defending the Decision to Make Batteries
Abstract
The electrification of the vehicle has led to fundamental changes in the automotive value chain. Resulting in original equipment manufacturers (OEMs) to decide between manufacturing in-house and source the either product or component from joint ventures or suppliers. As electrical vehicle differs fundamentally from fuel-based counterparts, OEM must be adaptive with their manufacturing strategies. The value creation in the design is the replacement of engine-gear system with battery. Hence, battery is the critical component to be considered in manufacturing strategy. The decision making in finding less expensive and profitable way of either making the product or buying components from a capable supplier in global competitive environment is a serious discussion. In this chapter, the author is studying and applying the make or buy strategy to Tesla battery production.
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