FRANKFURT — Major automakers such as Volkswagen, Daimler and Stellantis have been competing to secure battery supply in Europe, but in the process of finding enough battery material to move to electricity. , You may face bigger challenges.
Failure to adequately supply lithium, nickel, manganese, or cobalt can slow the transition to electric vehicles (EVs), make them more expensive, and threaten automakers’ profit margins. I have.
“There is a serious question as to whether supply can keep up with demand throughout the battery supply chain,” said Daniel Harrison, an automotive analyst at Ultima Media.
Until recently, Europe was considered to have lost battery competition with major Asian manufacturers such as CATL in China, LG Chem in South Korea, and Panasonic in Japan, said Ilkavon Dalwigk of EIT Inno Energy, which founded a network of European-funded companies. Stated. Union of “European Battery Alliance”.
“No one considered it a problem,” says von Darwick. “I thought I could import battery cells.”
However, banks like UBS predict that EV sales will skyrocket over the next decade, rocking politics and automakers and forcing them to rethink battery production.
Many battery plants
This was followed by the announcement of billions of EU funding programs and major battery factories by automakers and suppliers. Volkswagen alone plans six battery plants in Europe, and Daimler plans to build four with its partners.
Recently, battery cell factories have been announced more and more, and EIT Inno Energy lists about 50 projects currently planned in the EU.
If all these plans are realized, local production should meet demand around 2030. Approximately 640 gigawatt hours (GWh) are available, sufficient to produce an average of 13 million vehicles annually.
By 2030, Ultima Media estimates global supply of 2,140 GWh and demand of 2,212 GWh.
Harrison of Ultima Media predicts that the Wolfsburg-based company will be able to cover about two-thirds of its battery demand at Volkswagen’s six planned plants.
Supply chain gap
The problem lies in raw materials such as lithium, nickel, manganese and cobalt.
Benchmark Mineral Intelligence (BMI) market experts talk about “a major break in raw materials.” This is a large investment in a cell factory, but there is a shortage of investment in raw material extraction.
Caspar Rawles, head of BMI pricing and data analysis, explains that the price of lithium carbonate has more than doubled within a year.
Prices are also expected to rise for cobalt, which has the largest deposits in Congo and can be extracted under dire working conditions.
In the first stages of the supply chain, it takes about seven years for a new mine to be developed.
“Europe is not the only country that has raised its e-car goals and reduced CO2 emissions,” Rawles said.
Global competition is underway. The automotive industry is currently experiencing painful production disruptions due to a shortage of semiconductors.
Some automakers, including Volkswagen, are trying to secure a supply of raw materials with an exclusive supply contract.
So far, lithium comes mainly from Australia and Chile, cobalt comes from Congo, and graphite comes from China. The largest processors of cathode and anode materials are also there, in Japan.
However, imports can be more expensive as the tanker accident that blocked the Suez Canal recently showed that it was interrupted by tariff hikes in trade disputes and logistics problems.
follow