Watchmaker Swatch Group has been planning to launch a battery for electric vehicles, with the goal of meeting sales worth $10 to $15 billion by 2020, according to CEO Nick Hayek.
The car battery has been developed in collaboration with Belenos Clean Power (where Swatch holds a 51% stake), and the Swiss Federal Institute of Technology in Zurich. This comes when various experts already predict the boom of electric vehicles by 2030.
With prototypes reportedly produced at Swatch’s Renata battery unit, this new product will supposedly use a vanadium pentoxide compound, which means that the company’s goal is to produce safe batteries that have a longer life span and shorter recharging times.
Hayek mentioned earlier this year that it signed a memorandum with Chinese vehicle maker Geely in May, and the two agreed to jointly produce the battery early next year if prospects are feasible. (Geely spokesman Ashley Sutcliffe told Reuters though that they still work with other suppliers, and that the Swatch battery is just one of their many projects.)
Overall, it looks like a lofty prospect, but not without its share of skeptics.
Some share holders say that they have been provided little details and figures about this project.
“Investors do not have any figures, just this long-term fantasy that something could come of the cooperation with Geely,” said share holder and EFG Asset Management fund manager Urs Beck. “There are so many joint venture partners, that even if the project becomes a success, Swatch Group will probably only get a small share of it.”
Investors also feel that it’s expensive, considering how Hayek allegedly refuses to cut costs and production capacity amid lower sales compared to last year. Swatch’s share price has dropped by 12% this year in addition to a 21% decline last year, reports say.
One investor, Carine Menache, said that she hasn’t heard any news of cost cutting in the company, “but they should probably do that.” Menache also suggested that Hayek should consider diversifying into luxury accessories and produce more limited edition merchandise or smartwatches.