Johnson Matthey, a chemical company that makes batteries for cars and trucks, has canceled plans to grab a share of the electric vehicle market. This surprise decision saw Johnson Matthey’s shares fall by 20%.
According to the company, rivals are far behind in technology and battery chemicals will be sold.
Johnson Matthey, a leading producer of catalytic conversions for clean diesel and petrol engines, is an important player.
However, with such vehicles banned in the future it will require other sources of revenue.
It is believed that the company spent several hundred million pounds to market eLNO (a chemical project designed to improve the performance of battery cells).
The company was expected to play an integral role in helping Britain develop large-scale battery manufacturing.
Robert MacLeod announced that he will be retiring as chief executive on Thursday. He said that the potential returns to the battery division were not enough to justify additional investment.
He stated that “This decision will enable us to accelerate investment and focus our attention on more attractive growth area, particularly where we hold leadership positions like in hydrogen technology, circularity, and decarbonisation.
- Rivian, an electric truck manufacturer, makes a strong debut on the market
- The major carmakers are not supportive of the zero emission pledge
It is crucial to create electric vehicles that travel longer on just one charge by developing better-performing lithium-ion cells. Companies from Japan, South Korea and China dominate the market.
A Johnson Matthey exit would tie Johnson Matthey to the engine in a moment when electric transport is the future, stated Hargreaves Lansdown analyst Laura Hoy.
She stated that the group would be starting from scratch as it searches for new ways to adapt with the greener automotive industry.
Analyst at Jefferies Charlie Bentley stated that, while hydrogen transport development will continue to grow, it is difficult to believe they can replace Johnson Matthey’s very substantial earnings.
Liam Condon is replacing Mr MacLeod as head of Germany’s Bayer Crop Science Unit in March 2013.
“After eight years in chief executive I feel it’s time to step down. MacLeod stated, “I’m confident in our future prospects for growth.”
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