Dow makes strong push into the lithium-ion electrolyte industry

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By Steve Minnihan

Dow Chemical Company,a global leading chemical manufacturer, signed a joint venture with chemical company and electrolyte industry leader Ube Industries. Ube, based in Japan, manufactures and markets electrolytes and separators for lithium-ion batteries. This new partnership, named Advanced Electrolyte Technologies LLC, is a power move by Dow to capture a wider section of the lithium-ion supply chain, and a move that it has been working towards for some time.

This announcement follows other recent developments in the lithium-ion batteries arena. For example, fellow electrolyte producer Novolyte Technologies formed a joint venture with Korean chemical manufacturer Foosung last year. Additionally, BASF recently announced its entrance into the electrolyte market.

These announcements demonstrate the speed with which the North American battery manufacturing industry and the global electrolyte industry are developing. In addition to Dow, companies including LG Chem, 3M and Honeywell have made recent investments in the electrolyte market within North America. As the competitive landscape in North America thickens, competitors must look to establish strategic partnerships quickly in order to secure their positions in the market.

Specifically, the competitive landscape is heating up for Novolyte, which is currently the largest producer of lithium battery electrolytes in North America with 5,000 metric tons per annum. As a result of this joint venture, Novolyte will need to continue to focus on global growth and cost reduction in order to remain the strongest supplier in North America and eventually break into abroad markets.

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Therefore, those with a strong foothold in the global lithium-ion value chain should seek out a symbiotic relationship with Novolyte, which will be eager to partner and able to bring a strong technology to the table.

Steven Minnihan is an analyst for Lux Research, which provides strategic advice and on-going intelligence for emerging technologies. For more information, visit the Lux Research site.

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