1. Introduction

Vertical integration in the electric-vehicle (EV) ecosystem occurs when a company operates at multiple successive levels of the EV value chain—for example, manufacturing EVs, producing batteries, supplying charging equipment, operating charging networks, providing charging software, controlling vehicle data, offering financing, and supplying after-sales services.

Vertical integration can create substantial efficiencies. An EV manufacturer that also controls batteries, charging infrastructure and software may reduce transaction costs, improve interoperability, accelerate innovation and provide a better user experience.

However, vertical integration can also create competition concerns, particularly where an integrated undertaking possesses market power at one level and uses control over an upstream or downstream layer to disadvantage independent competitors.

The principal competition-law concern is therefore not vertical integration per se, but whether integration creates or strengthens the ability and incentive to foreclose rivals, discriminate against independent operators, restrict interoperability, exploit data, tie products, raise rivals' costs or extend market power into adjacent EV markets.

2. EV Ecosystem and Relevant Vertical Layers

A simplified EV ecosystem can be represented as:

Raw materials → Batteries → EV components → Vehicle manufacturing → Distribution → Charging hardware → Charging networks → Charging software → Payment services → After-sales/data services

Other connected markets include:

• EV financing and leasing;
• battery swapping;
• fleet management;
• navigation and charging applications;
• vehicle-to-grid services;
• energy supply;
• repair and maintenance;
• insurance;
• telematics and vehicle data;
• autonomous-driving systems.

Vertical integration may therefore occur in several forms.

Example 1: Vehicle + Battery

An EV manufacturer produces its own batteries and may refuse to supply them to competing vehicle manufacturers.

Example 2: Vehicle + Charging Network

An EV manufacturer operates a proprietary fast-charging network and gives its own vehicles preferential access.

Example 3: Charging Hardware + Charging Software

A charging-equipment supplier also operates the software platform required to manage chargers.

Example 4: Vehicle + Data

An integrated manufacturer collects extensive vehicle and charging data and restricts access by competing repairers, charging operators or mobility platforms.

Example 5: Energy + Charging

An electricity company owns charging infrastructure and may disadvantage rival charging-service providers.

3. Why Vertical Integration Can Become an Antitrust Problem

Vertical integration generally produces fewer competition concerns than horizontal mergers because the parties are not necessarily direct competitors.

Nevertheless, vertical integration can become problematic when the integrated undertaking has market power at one stage of the supply chain.

The basic theory is:

Market power at Level A + control over an important input or distribution channel + ability and incentive to disadvantage rivals at Level B = potential vertical foreclosure.

For EV markets, this can involve:

• input foreclosure;
• customer foreclosure;
• discriminatory access;
• refusal to deal;
• tying and bundling;
• margin squeeze;
• interoperability restrictions;
• data foreclosure;
• technical restrictions;
• exclusive dealing;
• discriminatory charging access;
• restrictions on independent repair;
• degradation of competing charging services.

4. Input Foreclosure

Input foreclosure occurs when an integrated undertaking restricts competitors' access to an important upstream input.

EV example

Suppose an EV manufacturer becomes dominant in a particular battery technology and refuses to supply batteries to independent EV manufacturers.

The competition authority would ask:

1. Is the battery genuinely important to downstream competition?
2. Does the integrated firm have market power upstream?
3. Can competitors obtain alternative batteries?
4. Would exclusion substantially reduce competition?
5. Is there a legitimate technical or efficiency justification?

The concern becomes stronger where the battery technology is protected by:

• patents;
• proprietary software;
• battery-management systems;
• unique charging protocols;
• scarce raw materials;
• long-term supply contracts.

5. Customer Foreclosure

The reverse situation is customer foreclosure.

An integrated EV company may control a substantial proportion of demand for:

• batteries;
• charging equipment;
• charging services;
• fleet-management software;
• automotive components.

It may then purchase exclusively from its affiliated suppliers.

Example

An EV manufacturer operating a large fleet might contract exclusively with its own charging network, preventing independent charging operators from accessing a substantial customer base.

The concern becomes particularly serious when independent operators require access to large fleet customers to achieve scale.

6. Charging-Network Foreclosure

Charging infrastructure is one of the most significant areas of vertical-integration risk.

An EV manufacturer may control:

EVs + charging hardware + charging stations + charging software + payment system + vehicle navigation.

It could potentially favour its affiliated network by:

• giving affiliated chargers preferential placement in vehicle navigation;
• withholding real-time vehicle compatibility information;
• imposing higher prices on rival charging networks;
• limiting access to vehicle charging data;
• restricting interoperability;
• making third-party chargers appear less reliable;
• prioritising its own charging stations;
• using proprietary authentication systems.

Such conduct could transform a vehicle manufacturer's market power into power over downstream charging services.

7. Interoperability as a Competition Issue

Interoperability is particularly important in EV markets because charging networks must interact with vehicles, payment systems, energy-management systems and software platforms.

An integrated undertaking could technically design its products so that:

its vehicles work optimally with its own chargers while competing chargers experience reduced functionality.

The competition-law question is whether the restriction represents genuine technological differentiation or an exclusionary strategy.

Relevant concerns include:

• proprietary charging connectors;
• authentication protocols;
• software APIs;
• charging-management platforms;
• roaming arrangements;
• payment interfaces;
• vehicle-to-grid communication;
• battery-management information.

8. Tying and Bundling

Vertical integration may also facilitate tying.

For example:

An EV manufacturer could require purchasers of its vehicles to use its affiliated charging service.

Or:

Access to a particular fast-charging function could be conditioned on purchasing the manufacturer's charging subscription.

Competition authorities would consider whether:

1. the products are distinct;
2. the undertaking has market power in the tying product;
3. customers are coerced or practically pressured;
4. the conduct forecloses competing suppliers;
5. there is an objective justification.

9. Margin Squeeze

A vertically integrated EV company can potentially engage in a margin squeeze.

Suppose it:

• sells charging hardware to independent charging operators at a high wholesale price; while
• providing charging services itself at a low downstream price.

Competitors may be unable to earn a sufficient margin between the upstream price and the downstream price.

The central issue is whether the integrated company's pricing structure makes effective downstream competition impossible.

10. Refusal to Supply or Provide Access

An integrated undertaking may control an infrastructure or input that competitors cannot reasonably reproduce.

Examples include:

• proprietary charging infrastructure;
• essential vehicle data;
• battery-management information;
• charging authentication systems;
• proprietary software APIs;
• access to an important battery-swapping network.

A refusal to provide access can raise issues under the essential-facilities/refusal-to-deal doctrine, although competition authorities generally apply demanding conditions before requiring compulsory access.

11. Data Foreclosure

EVs generate enormous amounts of data:

• battery health;
• charging history;
• driving behaviour;
• vehicle diagnostics;
• location;
• energy consumption;
• charging preferences;
• component performance.

An integrated EV manufacturer may control this data while competing in:

• charging;
• repair;
• insurance;
• fleet management;
• navigation;
• energy management.

This creates a significant competition concern.

For example, the manufacturer could give its own repair or insurance subsidiary extensive access to vehicle data while withholding equivalent access from independent competitors.

Thus:

Data control can become a vertically integrated competitive advantage.

12. Aftermarket Competition

EV vertical integration also creates important aftermarket concerns.

An EV manufacturer may control:

• original parts;
• diagnostics;
• software updates;
• battery certification;
• repair tools;
• vehicle data;
• warranties.

If independent repairers cannot obtain necessary technical information, the manufacturer may extend vehicle-market power into the repair and maintenance market.

The concern is especially significant because EVs increasingly depend upon software rather than traditional mechanical components.

13. Battery Swapping and Vertical Integration

Battery-swapping ecosystems can generate a particularly strong vertical structure:

Battery owner → swapping station → software platform → vehicle manufacturer → customer

A company controlling all these layers could:

• refuse interoperability;
• lock customers into its battery network;
• prevent competitors from accessing swapping stations;
• impose proprietary battery standards;
• make vehicle compatibility dependent upon its own battery system.

This may produce ecosystem lock-in.

14. Exclusive Dealing

An integrated EV undertaking might require:

• dealers to sell only its vehicles;
• charging operators to use its equipment;
• fleets to use its charging network;
• battery suppliers to avoid rival manufacturers;
• software providers to avoid competing platforms.

Exclusive arrangements are not automatically unlawful.

The critical question is whether they substantially foreclose competitors from sufficient access to the market.

15. Leveraging Market Power Across EV Markets

A central concern is leveraging.

For example:

Market power in EV manufacturing → charging infrastructure → charging software → energy services.

Or:

Market power in charging → vehicle navigation → energy management → vehicle data.

The integrated undertaking may therefore use power in one market to establish or reinforce power in another.

This makes traditional single-market analysis increasingly difficult.

16. Key Case Laws

1. European Commission v. Tetra Laval — C-12/03 P

This is a leading European authority concerning vertical integration and conglomerate effects.

The Court of Justice emphasised that competition authorities must establish, on the basis of convincing evidence, that a transaction is likely to produce anticompetitive effects.

EV relevance

An EV merger involving:

• vehicles;
• batteries;
• charging infrastructure; and
• software

should not be condemned merely because the resulting company operates across several markets.

The authority must establish a credible theory of harm.

Principle

Vertical integration must be assessed through demonstrable competitive effects rather than speculative assumptions.

17. United States v. Microsoft Corp. — 253 F.3d 34 (D.C. Cir. 2001)

Microsoft is a foundational case concerning leveraging, tying, interoperability and exclusionary conduct.

Microsoft used control over its operating-system platform to protect and strengthen its position against competing browsers.

EV relevance

The analogy is particularly strong where an EV manufacturer controls a platform consisting of:

• vehicle operating software;
• navigation;
• charging applications;
• vehicle data;
• app interfaces.

If the manufacturer uses control of the vehicle platform to disadvantage competing charging or mobility services, Microsoft provides an important analytical framework.

Principle

Control of a technological platform can facilitate exclusionary conduct in adjacent markets.

18. United States v. Dentsply International, Inc. — 399 F.3d 181 (3d Cir. 2005)

Dentsply concerned exclusionary distribution arrangements and the ability of a dominant firm to foreclose competitors through dealers.

EV relevance

The case is relevant where an EV manufacturer controls dealerships or charging distributors and imposes restrictions preventing them from dealing with competing products.

For example:

EV manufacturer → exclusive dealers → exclusive charging equipment.

Principle

Distribution restrictions can unlawfully foreclose rivals where they substantially restrict access to important distribution channels.

19. Lorain Journal Co. v. United States — 342 U.S. 143 (1951)

This classic U.S. case concerned a dominant newspaper refusing to deal with advertisers that also used a competing radio station.

EV relevance

The underlying principle is relevant to situations where an integrated EV platform controls an important commercial channel and attempts to punish customers or partners for dealing with competing platforms.

For example:

• charging operators using rival software;
• dealerships promoting competing charging networks;
• fleets purchasing rival charging services.

Principle

A dominant undertaking cannot necessarily use control over an important commercial channel to exclude competing channels.

20. Otter Tail Power Co. v. United States — 410 U.S. 366 (1973)

Otter Tail involved a vertically integrated electricity company that generated and distributed electricity and allegedly used its position to restrict municipal competition.

EV relevance

This is highly relevant to energy–charging integration.

Imagine an electricity company controlling:

• electricity generation;
• distribution;
• EV charging stations;
• charging software.

It might have incentives to restrict rival charging operators.

Principle

Vertical control over infrastructure can create opportunities to extend market power into adjacent competitive markets.

21. United States v. AT&T — 552 F. Supp. 131 (D.D.C. 1982)

The AT&T litigation is an important structural example of concerns surrounding vertical integration between telecommunications networks and competitive services.

The case ultimately produced major structural separation.

EV relevance

The analogy is useful for ecosystems where one company controls both:

• essential infrastructure; and
• downstream services competing over that infrastructure.

For example:

charging infrastructure + charging services + payment platform.

Principle

Where vertical integration permits infrastructure control to disadvantage downstream competitors, structural or access remedies may become relevant.

22. Bronner v. Mediaprint — C-7/97

The Court of Justice established a demanding framework for refusal-to-deal claims under Article 102 TFEU.

A facility generally must satisfy stringent conditions before a dominant undertaking can be compelled to provide access.

EV relevance

The case is particularly important for:

• charging networks;
• proprietary battery systems;
• vehicle data;
• charging software;
• infrastructure access.

A competitor cannot automatically demand access merely because access would make competition easier.

Principle

Compulsory access requires exceptional circumstances and cannot be based merely on commercial convenience.

23. IMS Health GmbH & Co. OHG v. NDC Health — C-418/01

IMS Health addressed the relationship between dominance, intellectual property and refusal to license.

EV relevance

The case becomes relevant when EV manufacturers control proprietary:

• battery technology;
• charging standards;
• diagnostic software;
• vehicle-data formats;
• APIs.

A competition authority must carefully balance exclusionary rights against the need to preserve effective competition.

Principle

Intellectual-property control does not automatically create an obligation to license, but exceptional circumstances may justify intervention.

24. Intel Corp. v. Commission — C-413/14 P

The Intel litigation is important for analysing exclusionary rebates and foreclosure effects.

The Court required consideration of the economic capacity of the conduct to foreclose an equally efficient competitor where the relevant test was applicable.

EV relevance

An integrated EV manufacturer could offer:

• charging discounts;
• battery rebates;
• vehicle discounts;
• bundled software;
• preferential network pricing.

Such arrangements should be assessed for their actual or potential foreclosure effects rather than characterised solely by form.

Principle

Economic effects and foreclosure capability are central to assessing exclusionary pricing practices.

25. Consolidated Case-Law Table

26. Major Competition Concerns in the EV Ecosystem

A. Battery foreclosure

Dominant battery producer denies or disadvantages rival EV manufacturers.

B. Charging foreclosure

Vehicle manufacturer favours its own charging network.

C. Software foreclosure

Charging-management software excludes competing hardware.

D. Data foreclosure

Vehicle and battery data are made available only to affiliated businesses.

E. Dealer foreclosure

Integrated manufacturers impose exclusivity on dealerships.

F. Repair foreclosure

Independent repairers cannot obtain diagnostics or software access.

G. Payment foreclosure

A proprietary charging payment system prevents competing payment providers from competing effectively.

H. Energy foreclosure

Electricity suppliers discriminate against rival charging operators.

I. Interoperability foreclosure

Technical restrictions make rival charging systems less functional.

J. Ecosystem lock-in

Customers become economically or technically dependent on a single integrated EV ecosystem.

27. Efficiency Defences

Vertical integration can generate genuine efficiencies.

An EV company may argue that integration:

• reduces battery costs;
• improves vehicle safety;
• improves charging reliability;
• enables faster charging;
• reduces transaction costs;
• improves cybersecurity;
• facilitates battery-management optimisation;
• improves warranty administration;
• enables vehicle-to-grid integration;
• accelerates innovation;
• prevents free-riding.

Competition law should therefore distinguish between procompetitive integration and strategic foreclosure.

28. Role of Interoperability Remedies

Competition authorities may impose behavioural remedies requiring:

• open charging protocols;
• non-discriminatory network access;
• interoperability;
• API access;
• data portability;
• transparent technical standards;
• non-exclusive arrangements;
• fair access to charging infrastructure.

These remedies can preserve integration efficiencies while preventing exclusion.

29. Structural Remedies

In extreme cases, authorities may consider:

• divestiture;
• separation of charging operations;
• functional separation;
• independent governance;
• access obligations;
• restrictions on cross-subsidisation;
• data separation.

Structural remedies should generally be considered only where behavioural remedies are insufficient.

30. EV Vertical Integration and Competition-Law Assessment Framework

A competition authority should examine:

Step 1 — Define the relevant markets

Potential markets include:

• EV manufacturing;
• battery supply;
• charging infrastructure;
• charging services;
• charging software;
• vehicle data;
• repair services;
• energy supply.

Step 2 — Determine market power

Consider:

• market shares;
• entry barriers;
• network effects;
• switching costs;
• intellectual property;
• access to data;
• infrastructure control.

Step 3 — Identify the vertical relationship

Determine whether the undertaking controls:

upstream input → downstream service

or:

infrastructure → platform → consumer.

Step 4 — Assess ability to foreclose

Can the integrated undertaking technically or commercially disadvantage competitors?

Step 5 — Assess incentive

Would foreclosure increase profits or strengthen ecosystem power?

Step 6 — Assess actual or likely effects

Consider:

• prices;
• output;
• quality;
• innovation;
• consumer choice;
• interoperability;
• entry;
• investment.

Step 7 — Examine efficiencies

Determine whether restrictions produce genuine and verifiable efficiencies.

Step 8 — Consider remedies

Possible remedies include:

• access;
• interoperability;
• data portability;
• non-discrimination;
• licensing;
• interoperability standards;
• divestiture.

31. The Emerging Concept of EV Ecosystem Power

Traditional competition analysis often examines individual markets.

EV markets increasingly require ecosystem analysis.

A company may not dominate EV manufacturing but may possess significant strategic power because it simultaneously controls:

vehicle + battery + charging + software + data + payments + energy.

The competitive advantage arises from the combination of complementary assets.

This creates a potential feedback loop:

More vehicles → more charging demand → more charging data → better network → more consumers → more vehicles.

Such feedback can produce significant entry barriers even where no individual market is completely monopolised.

32. Conclusion

Vertical integration in the EV ecosystem is not inherently anticompetitive. It can substantially reduce costs, improve interoperability, increase charging reliability and accelerate technological innovation.

The principal competition-law danger arises when a vertically integrated undertaking uses control over one indispensable or strategically important layer of the EV ecosystem to restrict competition at another layer.

The most important emerging concerns are:

1. battery input foreclosure;
2. charging-network foreclosure;
3. interoperability restrictions;
4. tying and bundling;
5. margin squeeze;
6. exclusive dealing;
7. vehicle-data foreclosure;
8. repair and aftermarket restrictions;
9. infrastructure discrimination; and
10. ecosystem lock-in.

The combined lessons of Tetra Laval, Microsoft, Dentsply, Lorain Journal, Otter Tail, AT&T, Bronner, IMS Health and Intel suggest that authorities should neither presume that vertical integration is harmful nor ignore its strategic potential for foreclosure. The appropriate inquiry is whether the integrated structure creates the ability and incentive to foreclose rivals and whether that foreclosure is capable of materially harming competition, innovation, interoperability and consumer choice.

Thus, in future EV competition law, the critical issue will increasingly be not simply who manufactures the vehicle, but who controls the ecosystem through which the vehicle operates.