You know that an industry is maturing when the original stalwarts tap out.
That happened in a big way when Sony announced in late July that it will sell its lithium-ion battery business to Murata Manufacturing, another Japanese company. Back in 1991, Sony released the first commercially available lithium-ion batteries, transforming the electronics market with a major improvement in energy density. That watershed moment ushered in the era of smartphones and sleek portable computers.
Elsewhere in Japan, Nikkei Asian Review reported in early August that Nissan wants to sell its electric-vehicle battery business. Back in 2007, when Nissan was developing the Leaf EV, there was no booming market for electric cars and therefore little demand to support EV battery manufacturing. Nissan decided to take the battery manufacturing process in-house and established a joint venture with NEC calledAutomotive Energy Supply Corporation. That company trailed only Panasonic in sales of lithium-ion batteries for cars, Nikkei reported. As the EV market scales up, Nissan may look beyond its borders for a steady supply of batteries.
These movements point to the difficulties first movers can encounter in adapting to the later stages of a market. For the pioneers in these two battery markets, there was no model to follow. They innovated battery products to suit their own needs, but later companies came in with the resources and focus to build such batteries at larger scale and lower cost. Without sufficient capital to scale their in-house production, these companies are feeling the pressure to exit the manufacturing side and leave it to the companies that can better compete in that arena.
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