The world’s largest automakers have warned supply chain disruptions and higher raw material prices are threatening to launch electric vehicles, even as the demand for battery-powered models far exceeds manufacturers’ current production capabilities.
Speaking at the Financial Times’ eighth-year futures summit this week, Tesla boss Elon Musk questioned his company’s ability to reach its goal – set a few months ago – of supplying 20 million electric cars a year by the end of the decade. , Calls it “aspiration, not promise.”
“We may stumble and not reach that goal,” Musk said exceptionally conservatively at the conference. “There are some raw material constraints that we see coming, in lithium production, probably in about three years, and in cathode production,” he added.
Musk’s remarks were echoed by several other industry leaders at the annual event, in contrast to previous peaks where executives announced increasingly ambitious targets for electric vehicles.
In 2021, even when the shortage of semiconductors showed little signs of decline, Mercedes-Benz boss Ola Clanius told attendees that his company Will go “faster” When it comes to the gradual cessation of combustion engine models and the construction of electric alternatives.
But the tone at this week’s summit was considerably more reluctant. No senior executive has announced higher targets for electric vehicle sales, or battery manufacturing. Tesla’s closest competitor, Volkswagen, which has long aimed to overtake its rival in electric vehicle sales by 2025, has reduced its chances of reaching that target, calling it “very, very close”.
“A lot of people now, I think, are a little too optimistic,” said Volkswagen CEO Herbert Dis, referring to the distribution of electric vehicles around the world.
Speaking from the back seat of Volkswagen’s latest electric model, a 60s emission-free version of the Camper van, he added: “We need the energy, we need the charging networks, we need the infrastructure, of course, we need the cars, but we We also need the batteries and the raw materials. “
Industry analysts, Dis said, do not take seriously enough “the amount of effort that needs to be put in to make this change happen.”
The warnings of the two leading electric vehicle manufacturers came as consumers ’appetite for battery-powered vehicles continues to exceed the sector’s expectations.
After VW, which plans to sell about 700,000 electric vehicles in 2022, revealed that the battery models in the US and Europe have run out for the rest of the year, Mercedes-Benz’s Clanius said at the summit that this is “especially true for us since.”
Musk of Tesla said he thinks “zero on generating demand and a lot on manufacturing and engineering and supply chain”, adding that he will not rule out buying a mining company to ensure the raw materials needed to increase electric vehicle production.
Continued bottlenecks in the supply of crucial raw materials for batteries have rubbed off analysts ’expectations for the entire electric vehicle industry.
Researchers from Wells Fargo who this week examined the prices of raw materials for components in the Tesla Model Y have found “a number of ‘surprises’ that challenge the concept of close [battery electric vehicle] adoption”.
“The rise in battery raw material costs has been delayed [battery electric vehicle] Equality of cost to [internal combustion engines] Up to a decade at least, ”the bank warned, referring to the moment when emission-free vehicles become as cheap as the value of petrol or diesel.
As a result, Wells Fargo analysts downgraded General Motors and Ford, as U.S. manufacturers “will likely have to sell money-losing compatibility [battery electric vehicles]”, To meet increasingly stringent regulatory targets.
Their assessment is in line with Renault CEO Luca de Miao, who told the FT conference that supply chain crises mean “the game has changed” and that automakers “need to play by new rules” that will see them rely on energy efforts. And mining companies.
He warned that the French group may not achieve cost equality for mid-range models by 2025, and that this could reduce demand for electric cars. “We know the buying power [of] “People in many parts of the world will not necessarily grow up,” de Miao said.
At the same time, generous subsidies for buyers of electric cars in China will be abolished by the end of the year, making it difficult for the transition to low-income earners.
Stellantis, which owns budget brands like Dacia, has warned that batteries will become scarce in just two or three years, making it difficult to launch affordable electric cars.
“The speed with which everyone is now building production capabilities for batteries is perhaps on the edge to be able to support the rapidly changing markets in which we operate,” said Stellantis boss Carlos Tavares.
“We are not addressing this change in a 360-degree strategic approach,” he added. “Everyone’s going to pour EVs into the market. So what’s next? Where’s the clean energy? Where’s the charging infrastructure? Where’s the raw materials?”
To help with the commodity crisis, Mercedes’ Klanius called on Europe to emulate the raw material procurement strategies implemented by China and the US and to develop “additional bilateral trade agreements”… Maybe beyond the three traditional regions.
The EU, he said, needs to look at ink deals with mineral-rich countries like Australia and India, as well as South American countries, and forge closer ties with “economies that may have some of the same raw materials we need to electrify.”
But most executives agreed that industry troubles would not go away quickly.
“[This is] “It’s completely different from what I said a year ago, ‘you know, we’re getting better, we’re getting better, one day we’ll be perfect,” said Ashwani Gupta, Nissan’s VP of operations.
“For me today, the supply chain crisis is the new normal.”
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