As (credit) card-carrying Americans, we’re used to getting what we want, when we want it: Amazon deliveries at terrifying speed. Costco ranch beef. quirks of Etsyand the night-whispered fantasies of Bring a trailer†
This is part one of a two-part explanation of the electric vehicle battery supply chain. Here’s how the auto industry painted itself in a corner. The following is what it does to knock its way back out.
With 200,000 reservation holders tapping their toes in line and dreaming of dusting gas trucks, we can take the Ford F-150 Lightning as an example, illustrating how much Americans wanted an electric pickup. So much so that even Ford was caught off guard, racing to double production in Detroit to 150,000 annual units by next year. Darren Palmer, Ford’s vice president of electric vehicle programs, told me Ford also wants to triple production of the Mustang Mach-E to 150,000 a year. That’s what happens when EVs go from compromised, short-range econoboxes to fully realized marvels that make gasoline versions seem almost obsolete, from performance, pollution and NVH to cost of ownership for fuel and maintenance.
The demand for the Lightning, Palmer admits, “has shocked everyone,” with Ford no longer making reservations for the time being.
But there’s a problem: an impending shortage of lithium-ion batteries that threatens to extend EV lines even longer, frustrate potential buyers and slow the transition from fossil fuel transportation to cleaner, radically more efficient means. It’s a discrepancy between automakers’ rosy forecasts for electric vehicle sales and the realities of the supply chain; a gorge in the Red Sea worthy of Charlton Heston, without sudden miracles. And it has everyone from Elon Musk to Rivian’s RJ Scaringe sound the alarm or suggest that things could get worse before they get better.
“We just don’t have the manufacturing capacity to meet demand,” said Venkat Srinivasan, director of the Collaborative Center for Energy Storage Science at Argonne National Laboratory. “And even if we had a wand, we don’t have the mines and materials to supply these things, so there’s a long-term materials challenge.”
Topographically, it seems that automakers have mastered these things: The Department of Energy has at least 13 new gigafactories slated to spring up on our soil by 2025, with about 300 gigawatt hours (gWh) of new capacity, almost all of them in the union-rejecting American South. That would be five times the current capacity of 60 gWh, while fast-growing EVs now control about 4% of the new car market.
Ford alone expects to add 60 new gigawatt hours in North America by 2025 — equivalent to total U.S. production today — and 140 new gigawatt hours by 2030, including joint-ops facilities with South Korea’s SK Innovation (SKI) in Tennessee and Kentucky. GM is preparing its first Ultium-branded battery plant with LG Energy Solution in Ohio, South Korea, with more to come in Tennessee and two other locations. Stellantis, Volkswagen and Toyota are laying the foundations for their own energy-rich battery activities. That 300 gWh estimate doesn’t even include Tesla’s Austin plant, from which Musk hopes to accelerate the deployment of Telsa’s large-format cylindrical cell — the much-anticipated 4680, so named for its size — to power its next-gen cars. Tesla, well ahead of the curve to produce its own batteries, says it has enough to support current production, at least until the sluggish Cybertruck demands more capacity from Panasonic or other partners.
On May 2, the White House announced it would raise $3.1 billion to help companies build new battery plants or retrofit old facilities (plus $60 million for battery recycling), part of the Bipartisan Infrastructure Law passed last year. year was adopted. The Biden administration aims to have 50 percent of new cars electric by 2030. Several automakers also agree with their own ambitious, possibly unrealistic goals for the transition from internal combustion to electricity.
That’s because experts don’t see the math add up. Mainly because, as experts like Rivian’s Scaringe warn, a US battery supply chain will basically have to start from scratch.
Srinivasan calculates that converting all new cars in America – 17 million in a good year of sales – to electric propulsion would cost more than 1,500 gWh per year in batteries. That is an average of 90 kWh in each car. (The Lightning and Rivian each put about 130 kWh in their long-haul packages, and a Hummer gobbles up 200 kWh, enough to power three smaller cars.) As things stand, America should increase capacity 25-fold. to there. Using the government’s 50 percent target for 2030 would require 750 GhW, more than double the country’s total projected capacity by 2025 – and that assumes every last cell would go into EVs. Grid battery storage, which will compete with EVs for capacity, may need 500 gWh or more of its own. Better go crack.
Tesla, with new plants in Austin and Berlin, is now on track to sell at least 1.2 million EVs worldwide by 2022. – twisting markings of some franchise dealers. (Is that predatory pricing, or classic supply and demand? You decide.) Even if Ford can get on schedule in Detroit, people at the back of the existing Lightning Line will certainly wait until 2024 to show off a truck in their driveway. Make them wait too long, and some customers will inevitably go elsewhere.
Until the entire EV ecosystem can expand, automakers — including giants in Europe and Asia with their own outsized electric ambitions — must fight for customers with one hand tied behind their backs. Hyundai Motor can’t build its knockout tag team, the high-design Hyundai Ioniq 5, Kia EV6 and now Genesis GV60 fast enough. The Ioniq 5 is the first car in Hyundai’s history to go on sale first in Europe, rather than in its home country, to help comply with Euro regulations and red-hot demand. That has salivated prospects for the U.S. essentially third in line, or completely deterred: The Ioniq 5 is only sold in 19 states that adhere to California’s emissions regulations. It’s a similar story with Ford, which has sent the majority of Mexico-made Mach-Es to Europe rather than America, even as it ramps up Mach-E production in China.
Battery experts recognize that current shortcomings were inevitable. Automakers didn’t have the cars, so there were no customers – or vice versa, depending on your opinion. Without customers, suppliers had no interest in developing technology, tools and components for a worthless trickle of business, including disingenuous lines of conformity cars. That chicken-and-egg puzzle tripped every potential EV maker, until Tesla came along. That includes Nissan (which has been making lithium-ion EVs since the 1990s) when it pioneered the first Leaf around 2011. Since lithium-ion cells were exceedingly expensive at the time, Nissan was forced to create its own joint-ops, in-house “spinel” battery, which became notoriously prone to problems. The Leaf’s already sparse range quickly declined, especially in easy-to-bake Southwestern climates.
It’s now easy to chuckle at that quirky, quivering Leaf, its meager 24-kWh pack and 77-mile range. But as I’ve grown tired of mentioning it, we’re still waiting for each non-Tesla EV to beat the Leaf’s 2014 US record 30,100 sales. race stays tight.
This is clearly due to limited production, not consumer demand.
If Ford can achieve its goals, the Lightning should be a shoo-in to set a U.S. sales record for any EV that doesn’t wear a Tesla badge. Ford’s Palmer says the company is well aware of the stakes, including the need to get the trucks into customer hands and potentially rebuild them for good. Three out of four Lightning reservation holders have never owned a Ford. Four out of five buy their very first EV.
“We know everyone will want these batteries because of the advancements in electric cars,” Palmer says. “We’re rushing and we have entire departments that are completely focused on how we’re going to get the offer at the rates we’ve shown.”
As automakers scramble to sign long-term contracts and lock in their share of limited battery supplies, Palmer notes these are no small challenges. Huge scale and long-term supplier relationships, he says, “can separate the big players from the start-ups.”