QUESTION ONE [30] Read the extract below and answer the questions that follow: South Africa Battery Manufacturing and Supply Market Report 2021 - ResearchAndMarkets.com This report focuses on the manufacture of batteries and includes comprehensive information on the state of the sector including primary, automotive, energy storage, industrial and lithium-ion batteries, electric vehicles, technology, recycling and other environmental factors. There are profiles of nine companies including Eveready, the only primary battery manufacturer in South Africa and other major brands such as Energizer and Duracell. Other companies profiled include AutoX, involved in the automotive battery replacement market, and First National Battery (under Metindustrial), a major player in the original equipment manufacturer sector, and a supplier of industrial batteries. The Manufacture and Supply of Batteries in South Africa Demand for lithium-ion batteries is expected to increase as internal combustion engine vehicles lose share to electric vehicles. While South Africa has no lithium-ion battery cell manufacturers, several companies are involved in battery pack assembly. Demand for all types of batteries is also expected to come from the rollout of renewable energy projects. Battery demand in South Africa is being driven by the growth in the number of renewable energy projects, an increasing number of homeowners and by industrial and commercial users looking for a reliable energy source as load-shedding continues. Electric Vehicles Global sales of new energy vehicles (battery, hybrid and fuel cell) accelerated in 2020, despite the decrease in new vehicle sales due to the pandemic. The number of electric vehicles in South Africa is small, although studies indicate the importance of local vehicle manufacturers moving away from combustion engine vehicles to ensure the industry's long-term sustainability. Electric vehicles are expensive and there is a limited charging infrastructure. Import tariffs are a significant inhibitor for investment in electronic vehicle manufacturing. Stationary Energy Storage In South Africa, the energy storage market continues to grow, as new independent power producer projects come on stream and as load-shedding continues. Load-shedding is driving demand for back-up power and uninterrupted power supply applications, particularly in commercial, industrial and agricultural applications where the costs of energy insecurity are high. (Source: https://www.businesswire.com/news/home/20210902005487/en/South-Africa-Battery-Manufacturing-and-Supply-Market-Report-2021---ResearchAndMarkets.com) 1.1 Taking the article into consideration, explain what is likely to happen to prices of batteries due to the aforementioned changes in demand and/or supply. (15) 1.2 Given the nature of electric cars, explain the importance of price elasticity of demand to electric car manufacturers.