Welcome to issue number 14 of the Just Auto magazine.
The ICE is far from dead, but the rush to secure battery supply chains is on
The internal combustion engine (ICE) may well be on the way out ultimately, but it’s going to be a decline that varies in pace across the world. In terms of the transition to electric vehicles, there is a lot to be resolved. Value chains are starting to take shape and they will be more favourable for some companies than others. Also, if some markets lean towards ICE-powered vehicles for longer, that means there is a need to continue to supply ICE vehicles to them and be able to do that profitably (and presumably in a manner that is as sustainable as possible). As is so often the case, nothing comes risk-free. Companies must make tough judgement calls on where to invest and on strategies that mitigate risk and maximise profit.
The auto industry’s energy transition from internal combustion engines (ICEs) to battery electric vehicles (BEVs) is gathering momentum, but we are still in an early phase. As this transition scales up, it comes with a range of issues that are still to be fully resolved – such as the provision of battery charging infrastructure. Another emerging issue is the capability to manufacture sufficient EV powertrain batteries at volume. While so-called gigafactories are certainly coming, supply chains for the relevant raw materials – such as lithium and cobalt - must also be considered.
Ford, for example, is seeking to secure future lithium supplies for EV batteries and recently did a deal with an Australian lithium specialist, Lake Resources. Another example: General Motors and Glencore struck a cobalt supply deal. Cobalt is an essential material that provides EV batteries with energy density and longevity. Companies are thinking ahead.
After recent experiences with supply chain disruption, vehicle makers are also sensitive to future supply chain risks and a higher level of vertical integration is back in vogue for some.
In Europe, the decline of diesel share in the car market has been rapid and its decline is forecast to continue. The numbers are stark (see our article in this edition) and no-one wants to be left standing in what could turn out to be a Kodak moment.
Still on powertrain, Renault recently gave us some interesting insights into its long-term plans when it showed a hydrogen-powered car concept that could be commercially available after 2030. The company also said the concept’s exterior reveals the shapes and style of a new all-electric family model that will be marketed in 2024. Take a look at the Renault Scenic Vision concept in our news section.
Some of it good (breath-taking sustainability and engineering innovations) and some of it bad (a seemingly more volatile world; more cyber threats; growing climate change worries), the future, as they say, is coming. The auto industry will be at its heart.
Dave Leggett, Editor