From Cost Pressure to Scalable Advantage

Delivering $44M in Strategic Battery Cell Sourcing

Battery cells are a strategically critical component with high cost, constrained supply, and sustainability relevance. A leading global industrial company faced increasing price pressure, limited supplier choice, and strict technical eligibility requirements, while needing to secure reliable supply for its core power technology applications. In this challenging environment, the company partnered with us to design and execute a structured, competitive sourcing and negotiation approach.

Following a successful first engagement in 2024, the collaboration was continued in 2025, building on a negotiation framework specifically designed for the client to address increased market and sourcing complexity.

 

Industries
Engineered Products & Machinery
Expertise

// Situation and Objectives

Supplier RFQ responses indicated significant price increase requests – up to 51% in the first year and up to 18% in the second – driven by raw material costs, tariffs, and incumbents leveraging their strong positions in a constrained and highly dependent supply environment. At the same time, engineering constraints limited the ability to shift volumes across suppliers, while dual- and later triple-sourcing requirements had to be enforced to ensure supply security.

The objective was therefore not only to mitigate cost increases, but to secure a resilient and sustainable sourcing outcome.

 

// Our Approach

We implemented a process-driven, game-theory-based negotiation design, combining rigorous preparation with structured competitive pressure.

Rigorous preparation and supplier qualification

The process started with a detailed baseline analysis and full standardization of supplier quotes to ensure transparency and comparability. Close alignment with engineering defined eligibility, shiftability, and sourcing constraints upfront.

This resulted in:

  • Clear supplier qualification and ranking
  • Transparent definition of who could win which share of business

Structured, game-theory-driven negotiation execution

Negotiations were executed in multiple, well-defined phases. Top-ranked suppliers were given the opportunity to receive exclusive offers and submit counteroffers, preserving partnerships while rewarding competitiveness. Competitive tension was subsequently maximized through a targeted mix of:

  • Dutch auctions
  • Sealed-bid auctions
  • Hybrid auction formats

In parallel, negotiations explicitly addressed payment terms and key contractual conditions, supported by close alignment with legal and finance. All rules, timelines, and awarding mechanisms were defined upfront and communicated transparently to suppliers.

Throughout the process, we worked in close collaboration with procurement, engineering, legal, and senior management, ensuring fast decision-making and disciplined execution.

Sustainability and Supply Resilience

Sustainability and long-term resilience were embedded directly into the sourcing and awarding logic rather than treated as add-ons.

  • Dual- and triple-sourcing strategies reduced dependency on individual suppliers and regions
  • Production footprint scenarios, including in-China and out-of-China options, were evaluated on a like-for-like basis, balancing cost, tariffs, logistics, and sustainability implications
  • Competitive pressure was applied without compromising the quality of sourced battery cells or relationships with critical suppliers

This ensured that cost optimization went hand in hand with supply security and future-proof sourcing decisions.

 

// Results and Impact

Over two consecutive years, the structured negotiation approach delivered strong results. In 2024, the sourcing initiative achieved 12% savings to RFQ, despite severe supplier price increase requests and a highly restricted supplier base. In 2025, the approach was further scaled under increased complexity, delivering 16% savings to RFQ and securing a multi-year sourcing outcome.

  • $44M in cumulative savings delivered across two consecutive sourcing initiatives
  • Successful mitigation of incumbent-driven price increase requests
  • Secured dual- and triple-sourcing for critical battery cell types
  • Improved payment terms and contractual conditions
  • Establishment of a scalable negotiation framework for future strategic sourcing initiatives

 

 

Key Takeaway

By combining negotiation excellence with sustainability and supply resilience considerations, we supported the client in transforming battery cell sourcing from reactive cost defense into a strategic, scalable procurement capability, delivering proven impact across multiple years.

 

 

 

Contact Our Experts

Jürgen Wetzstein

Managing Director

Dr. Daria Khromenkova

Senior Project Manager

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