AeroVolt, a pioneering manufacturer of lithium-ion batteries for electric vehicles (EVs), entered the European market in 2018. Following significant technological advances in cell chemistry and strategic partnerships with major automotive groups, it has rapidly scaled its production facilities ('Gigafactories') across Europe and North America to secure its position in the highly competitive clean energy supply chain.
Evaluate the extent to which economies of scale are the most important factor for a capital-intensive manufacturer, such as AeroVolt, when deciding whether to expand its production capacity.
