Hyperdrive Daily: the battle for battery-car supremacy
Welcome to the Daily Hyperdrive Briefing, decoding the revolution reshaping the automotive world, from electric vehicles to self-driving cars and beyond.
News in brief
- Ford closes at almost five years tallest $ 30 billion EV plan.
- Former CFO of Waymo joins electric truck maker Rivian.
- The bill directed to the Senate includes up to EV credits of $ 12,500.
Nation against nation
The auto industry has been the backbone of Western economies for decades, providing millions of well-paying manufacturing jobs. As the era of combustion engines wears off, governments that have long enjoyed a symbiotic relationship with the industry are scrambling to position themselves.
Longtime auto heavyweights – the United States, Germany and Japan – are under pressure to defend their position in a booming industry. At the same time, countries that have done little or no car manufacturing see an openness and a chance to boost local industries by making electric vehicles.
Saudi Arabia, whose crude has fueled the auto industry, has hired advisers to explore the possibility of starting its own domestic EV maker, my colleagues Christoph Rauwald and William Wilkes reported last month. Abu Dhabi and Qatar, which also derive significant wealth from oil and gas, have invested in EV-related companies to diversify their income.
While it might not be Game of Thrones-like material, the geopolitical competition to dominate the electric car is heating up nonetheless. Joe Biden didn’t just publicly test Ford’s new electric pickup truck (free marketing!) Last week; he also touted his $ 174 billion plan to make the American auto industry fit for the future. His climate adviser told Bloomberg Television’s Emily Chang that the president feared China was “far away” from the United States on electric vehicles.
China has been known to develop its domestic auto industry for decades, and has committed several hundred billion yuan to support EV change by an industry teeming with state-owned manufacturers.
So how do you win this race? Just as oil was the lifeblood of the economy of the 20th century, the main resource in the age of electric vehicles is the battery – and everything that is used to make them.
The International Energy Agency made a fascinating recommendation earlier this month to Western governments, advising them to consider stockpiling critical metals for batteries such as cobalt and lithium. Unlike petroleum, a relatively ubiquitous commodity, the production and processing of minerals such as lithium, cobalt and some rare earth elements is highly concentrated, with the three main producers accounting for over 75% of the global supply.
In Europe, the future battery manufacturers are emerging in the Nordic countries, Germany, France, the United Kingdom and Poland in a transcontinental competition to reduce the dominance of CATL in China and LG Energy Solution in South Korea.
Earlier this year, the EU paved the way for dozens of companies, including BMW and Swedish start-up Northvolt, will receive around 2.9 billion euros ($ 3.6 billion) in state aid for battery projects. The EU expects the support to trigger more than three times as much private investment.
The region has an important skin in the game. The automakers, including the owner of Volkswagen, Renault and Fiat, Stellantis, as well as the hundreds of companies that supply them, supply directly and indirectly. jobs to 13.8 million Europeans – around 6% of total employment in the EU.
The transformation of the industry is putting at least some of these jobs at risk (think of the people who make gearboxes and fuel injectors, for example). Europe’s battery surge is expected to create 3-4 million new jobs by 2025, while more are lost. By the same year, the EU hopes to become the world’s second largest producer of battery cells behind China.
Germany seems ready to make their way to the front of the peloton. VW made a massive bid for pole position by launching an estimated $ 18 billion plan for six battery factories in Europe, and it’s also QuantumScape’s largest shareholder, which is developing battery technology that could extend reach and accelerate Loading time.
“Batteries are the most important component in terms of value in an electric vehicle and are crucial for performance and cost,” said James Frith, analyst at BloombergNEF. “Countries are fighting to attract manufacturers of this crucial technology to ensure that their auto industries remain relevant in an electric vehicle world and that existing jobs in the auto supply chain do not disappear.”
Before you leave
Tesla could take unusual steps to secure chip supply, including prepayment, Financial Times reported, citing people at semiconductor industry suppliers, chipmakers and consulting firms. The automaker is also considering an outright purchase of a factory, although those considerations are at a much more preliminary stage, the newspaper said.