Several of the biggest makers of lithium-ion batteries have been accused of price fixing in a number of class action suits, which could have major implications for the future of electric cars.
As key components in everything from laptops and cell phones to electric vehicles, lithium-ion batteries have never been cheap, but it may have been more than just insatiable demand that has kept them that way over the years. According to the New Jersey Law Journal, at least 10 class actions have been brought against manufacturers of lithium-ion batteries alleging price fixing. Firms named include Panasonic, LG, Sony, Samsung, Sanyo and Hitachi, along with their American subsidiaries in California and New Jersey. The plaintiffs allege that these companies have engaged in price fixing to keep lithium-ion battery prices artificially high since 2000, and that they have controlled at times between 60 and 90 percent of global lithium-ion battery production.
The suit follows in the footsteps of others filed over price fixing of electronic components, such as LCD screens and RAM, and in some cases, the companies involved are the same. The plaintiffs allege that the situation the battery situation mirrors those previous cases in some ways, such as a highly concentrated market, rapid commoditization of new technology, and pricing that seems to defy the effects of fierce competition.
According to court filings, li-ion battery prices fell dramatically between 2000 and 2002 as Korean manufacturers entered the market and competition increased. But in the period following this, prices have risen consistently without even a hiccup during the 2008 economic downturn, evidence, plaintiffs claim, of price fixing.
Breaking up a potential price-fixing racket in lithium-ion batteries could be a significant development for EVs, where prohibitively expensive battery packs have served as an insurmountable stumbling block preventing mass EV implementation. Government programs have helped somewhat in reducing the cost for the consumer, but this spending is controversial, and skeptics see any consumer technology that needs to be propped up with legislation as being impractical in the long run. Prices have been predicted to fall for lithium-ion EV batteries over the next decade, but with sales of EVs falling well short of the high expectations of just two years ago and automakers rethinking their EV strategies, a decade from now might already be too late to save the EV. Should these suits trigger a worldwide drop in lithium-ion battery prices, the potential is there for an EV market which is competitive with standard gasoline-powered cars.
Source : digitaltrends[dot]com
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