In the race for electric cars, a road strewn with pitfalls

posted on Sunday, August 28, 2022 at 10:45

Prompted by the authorities or by their own commitments, the main car manufacturers have embarked on a radical change towards the end of combustion engines and the arrival of electric cars. But to achieve their ambitious goals, they will have to overcome many obstacles.

Will there be enough lithium and other raw materials needed to make electric batteries? Enough charging stations? How to ensure that cars do not cost too much for the most modest pockets?

After the success of Tesla, built solely on electric vehicles, most of the large groups in the sector plan to invest tens of billions of dollars in the coming years to transform themselves.

Stellantis (PSA-Fiat-Chrysler) wants to sell 100% of electric vehicles in Europe by 2030. Toyota plans to launch 30 models in this segment by the same date. General Motors aims to stop producing cars with combustion engines by 2035.

They are encouraged in this direction by the authorities.

The latest, California on Thursday banned the sale of traditional new cars starting in 2035.

– Insured demand –

The European Union has also initiated a ban on the sale of new gasoline, diesel or hybrid cars by 2035, while China wants at least half of new vehicles by then to be electric, hybrid or hydrogen.

Automakers are warned, “it depends on them to prepare their stocks,” remarks Jessica Caldwell, from the specialized firm Edmunds.

“It was still recently said that the biggest obstacles to the adoption of electric vehicles would be the acceptance by motorists and the price”, underlines the specialist.

But driven by consumers who are increasingly sensitive to the impacts of climate change, the demand is there.

In the United States, for example, General Motors claims to have more than 150,000 advance orders for the electric version of its Silverado truck, which will not be available until 2023. It takes several months for Tesla, the flagship brand in the sector. . .

“The question now seems more about whether they can get the necessary materials,” says Ms Caldwell.

– Drastic changes” –

“Governments can decide all they want about subsidies or new regulations for electric vehicles. We are currently facing a lack of palladium, nickel, lithium”, explains Karl Brauer from the specialized site iseecars.

Certainly, the problem is in large part related to the conflict between Russia and the Ukraine, more “personne n’aurait prédit il already an l’escalade des prix ou la difficulté à se procurer ces materiaux”, rappelle-t-He Which highlights the fact that the situation “can change drastically at any time.”

Manufacturers are struggling to limit the dangers.

They build their own battery factories, create joint ventures with specialized manufacturers, or partner with mining companies.

German groups Volkswagen and Mercedes-Benz even signed deals directly with the Canadian government on Monday to consolidate their supply of rare metals.

But the market remains global, as far as oil is concerned, Brauer recalls: as long as supply is limited, “there will always be someone who pays a little more.”

In this sense, other aspects of the transition to electric, such as the conversion of production lines, are in the end quite easy “because they can control it,” he says.

– Help under conditions –

Local regulations can also complicate the task, as in the United States where a recent law conditions a $7,500 aid for the purchase of an electric car to certain elements, such as final assembly in North America.

The Automotive Innovation Alliance, an industry lobby group in the United States, has calculated that around 70% of the 72 electric, plug-in hybrid or hydrogen models currently on the market would not, as they stand, be able to claim this subsidy.

For Garrett Nelson, CFRA analyst, this new law will clearly favor Tesla, GM and Ford in the United States, to the detriment of European and Asian manufacturers.

Following California’s announcement, the Alliance for Automotive Innovation also estimated in a press release that it would be “extremely difficult” to achieve the state’s goals due to “external factors”: inflation, electric or hydrogen charging stations, supply chains , labor, availability and price of critical materials, and the continuing shortage of semiconductors.

“These are complex, interrelated, and global issues that go far beyond the control of (California authorities) or the auto industry,” says the Alliance.

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