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"The semiconductor shortage that will sweep the auto industry in 2021 is just a small appetizer compared to the severity of the battery shortage we are about to usher in in the next 20 years."
RJ Scaringe, CEO of Electric Vehicle Upstart Rivian, said in an interview with the Wall Street Journal in mid-April.
It's not just Scarlinger, but in 2022, warnings about battery shortages are popping up in the auto industry.
On April 8, Tesla CEO Elon Musk tweeted the importance of lithium, a key raw material for electric vehicle batteries. He said: "The price of lithium has risen to crazy levels! Tesla may actually have to go straight into mining and refining. ”
In his view, there is no shortage of lithium on this earth, but the process of mining and refining is too slow at this stage.
The loss of control of the price of battery raw materials is the culprit.
Since 2021, the price of cobalt has nearly tripled, soaring from more than $30,000 per ton to more than $80,000 in March 2022.
Nickel was priced at $33,600 a tonne in March, up 59% from the beginning of January. In just two months, there was such a crazy trend that the London Metal Exchange even had to suspend trading.
A mid-April assessment by battery supply chain researchers and price reporters at its Headquarters in London showed that battery-grade lithium carbonate (EXW China, ≥ 99.5 percent Li CO) had fallen slightly by less than 1 percent in the previous two weeks but remained near $80,000 a tonne. Last April, it was trading at only about $15,000 a tonne.
Musk's Future Mining Path? (Image by Getty Images/Futurism)▼
According to Benchmark Mineral Intelligence, demand for lithium-ion batteries has surged to 400GWh in 2021 from 59GWh in 2015 and will jump another 50% in 2022.
Automakers have tried to plan ahead in the past year, investing heavily in battery research and development and manufacturing. However, it still cannot keep up with the consumption rate of global battery capacity reserves.
On April 27, Ford Motor Corp. held a first-quarter 2022 earnings call, saying it saw considerable inflationary pressures on raw materials needed for electric vehicle batteries, such as lithium and nickel. And if you want to go further down the road of electrification, raw material supply will be a key issue.
"We know very well that batteries are a key unlocking way to realize our aspirations for electric vehicles and drive our future growth." Jim Farley, Ford's chief executive, told investment analysts, "In the medium to long term, securing raw materials, processing and refining, as well as establishing battery production in the U.S. and around the world, will be an important part of our work." ”
Ford lost $3.1 billion in the first quarter, but thanks to the official launch of the F-150 Lightning on April 26, it is expected to make good earnings for the whole year. Farley is also targeting Ford at Tesla, which it hopes to become the world's leading manufacturer of electric vehicles and electric pickups.
The much-anticipated Ford F-150 Lightning went on sale on April 26 (Photo by FREDERIC J. BROWN/AFP via Getty Images).▼
Jim Rowan, Volvo Car's new CEO and president, similarly predicts that the scarcity of battery supply will become a pressing issue for the industry. The company has already made investments in the hope of gaining a foothold in the market.
In February 2022, Volvo and battery maker Northvolt announced that they would build a battery manufacturing plant in Gothenburg, Sweden, starting construction in 2023. According to the two companies, the plant will have a potential annual battery production capacity of up to 50GWh, which is equivalent to providing enough batteries for about 500,000 cars a year.
"Investing in batteries helps us control our own battery supply along the way." Jim Rowan, who joined Volvo earlier this year, was interviewed on CNBC's "Squawk Box Europe" section on April 28.
In March 2021, Volvo said it plans to become an all-electric vehicle company by 2030, a move that will require it to provide a stable and safe battery supply to its vehicles.
"I think battery supply will be one of the most major supply shortages in the coming years." Rowan said, "That's why we're investing so much in Northvolt. In this way, we can not only control the supply chain, but also really start developing our own battery chemistry and production facilities. ”
The ultimate goal is to give Volvo full control over future electric propulsion processes.
Rowan was speaking on the same day that his business announced its first quarter 2022 results.
Volvo revenue rose 8% to $7.56 billion in the first quarter of 2022. EBIT was $605 million, down from $847 million for the same period in 2021.
The company sold 148295 cars in the first quarter, similarly down 20 percent from the same period last year.
Like many businesses, supply chain issues continue to have an impact on operations. Volvo expects this shortage to continue in the second quarter and could improve in the second half of the year.
The new president of Volvo, Jim Rowan (Source: Volvo's official website) ▼
Pulling back the clock to 2021, Herbert Diess, CEO of Volkswagen, has emphasized the importance of battery production in the coming years, calling battery supply an increasingly serious challenge that cannot be ignored.
"Battery reserves could be an ongoing constraint on the development of electric vehicles over the next 5 to 10 years," Dies said. Because preparation takes a long time, and the demand for energy and battery production is huge and will only accelerate. Therefore, a huge supply chain must be established in the next few years. ”
On May 3, the U.S. government said it would provide $3.1 billion in funding as part of the Bipartisan Infrastructure Act enacted last year to support the production of advanced batteries in the country to spur the adoption of electric vehicles. At the same time, they also set aside a separate $60 million grant for battery recycling to encourage more companies to recycle and reuse battery raw materials.
At present, in addition to Tesla's continuous investment in battery production in the United States, General Motors has established a joint venture with LG New Energy to expand production capacity in several factories in the United States; Ford Motor is also cooperating with SK Innovation.
This article was originally produced by Automotive Business Review
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