Panel: European, US Automakers Anxious About Catching Up to China in EVs
China's stranglehold on minerals used in electric vehicle battery-making, and their head start on making quality, affordable EVs makes U.S. and European firms anxious, panelists said at a Georgetown Business School webinar on the future of auto value chains.
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Center for Automotive Research CEO Alan Amici, who spent 30 years in product development at Chrysler before joining the think tank, said what keeps auto company CEOs up at night is the affordability and profitability of EVs.
He said engineers will be working to learn how to improve battery cell construction and cell chemistry to find less expensive ways to get an energy-dense battery.
Electric motors, too, can be made smaller and lighter, he said. He asked rhetorically: "How quickly can that occur?"
David Roberts, a veteran of Aston-Martin and Chrysler in the U.K., as well as the chair of auto parts manufacturer Evtec Group and a hydrogen-fuel-cell/electric heavy truck manufacturing company, said companies are asking how long it will take to catch up with China in battery technology and materials needed for EV batteries. He noted that the best-selling EV in the U.K. is from a Chinese manufacturer, made in China, and it's also the least costly and pretty good quality.
"Most things go through China in batteries, whether we like it or not," he said. He said just one auto parts manufacturer pivoting from parts for internal combustion engines to parts for EVs will spend $100 million.
Jaguar-Land Rover is spending billions, he said. "Every OEM [original equipment manufacturer] is investing billions in the transition."
He said firms are looking to regionalize auto supply chains, too. "We used to say the supply chain is about 3,000 miles long and six inches deep," he said; now it's become "1,000 miles long and a quarter inch deep."
Richard Bouveret, CEO of Blue Solutions, a firm that makes solid state batteries in France, said that while the cost of batteries has gone down in the last 10 years, the cost of raw materials is going up, and that without controlling the mineral supply chain, it's hard to control the cost of batteries.
"If you take graphite, only China is managing that," he said. China imposed export controls on graphite recently. "The price and the power is not on the automotive makers, the power is on the raw material supplier. This is something that we need to control better."
Panelist Chris Levy, director of the energy transformation office in the State Department, said: "It’s disconcerting when you see an export control on a mineral you desperately need."
He suggested that diversifying the source of minerals would lower costs. However, most business people say sourcing processed minerals outside China will probably raise costs, as China subsidizes processing so heavily that market-based firms cannot compete -- that's how China became so dominant in the field.