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EV push turns Asian battery makers into power brokers
The automaker is investing billions of dollars in bringing new electric vehicles
to consumers in the United States and other global markets
Their success depends on getting the most important
and expensive components: the battery.
A handful of companies based in China, Japan and South Korea make automotive-grade battery cells,
which has upset the traditional dynamics between carmakers and suppliers.
Although these battery companies are little known to the general public
and are relatively new to the auto industry’s extensive supply chain,
they are key to the manufacturers’ goal of bringing dozens of new EV models to US showrooms by 2025.
“Vehicle makers don’t have enough batteries to deliver on their near-term commitments,
” said Sam Jaffe, managing director of Karen Era,
an energy storage consulting firm in Boulder, Coldo.
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Many new battery factories are being built.
But there is a problem with battery supply in the near future.
All the car companies coming on this occasion are suppressing.
Intellectual property tensions, logistics,
production delays and battles have increased tensions between this new generation of carmakers
and suppliers, which could benefit far more than suppliers of camshafts, mufflers and pistons.
The auto industry’s sudden embrace of EVs can lead to more incidents,
such as recent memories of four different models of battery fire hazards.
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To avoid the possibility of Germany, Ford Motor Company,
which is again one of the companies,
now has to work with other car manufacturers to meet European emissions regulations.
‘Disruptive supply disruption’
Although battery manufacturers may increase output in the short term,
shortages are a major problem. Audi, a unit of the Volkswagen Group,
had to suspend production of its E-Tron and Jaguar Land Rover in February,
the same day that production of the iPace was suspended
due to interruptions with battery-supplying LG Cam.
Ford and VW have warned that a legal dispute over trade secrets between LGCam
and South Korean co-producer SK Innovation could “disrupt catastrophic supplies.
” The US International Trade Commission is expected to issue a review of the dispute on October 26.
Battery providers are wary of committing as much as any single car
and are willing to pay the billions of dollars they have spent on production lines around the world.
Many are hedging their stake by entering into agreements with more than one partner.
The small club includes two South Korean rivals,
China’s contemporary Amprix Technology Company and Japan’s Panasonic Corporation.
Battery suppliers can be very picky with their OEMs,”
said Nathalie Capati, a former battery engineer at General Motors and Apple Inc.
who now runs the Battery Lab, a consulting firm in San Francisco.
There are only a few cell suppliers who can meet their quality and volume.
The automakers are at the mercy of cell suppliers these days.
Tesla cell production
Panasonic has long been involved in hip-hop with Tesla Inc.
The two companies operate a large battery plant known as the Gig Factory outside Reno, New York.
CEO Elon Musk has complained that the Japanese company is
moving at a rate that limits production of Tesla’s Model 3 sedan.
Panasonic is adding a 14th battery cell production line to its Nevada factory,
a 10 percent increase in production.
But it doesn’t look like Tesla:
it has a joint venture with Toyota Motor Corporation.
Today’s batteries can’t scale fast, “Musk said at an event last month at Tesla’s Battery Day event,
outlining the company’s technology plans.
There is a clear path to success but there is still a ton of work to be done.
Tesla also acquired batteries from CATL and LG Cam.
But California-based automaker Palo Alto is in dire need of batteries
and wants to recover a company that relies on foreign suppliers.
Tesla plans to build its cells on a pilot line near its auto plant in Fremont, California
and in a new factory it is building in Austin, Texas.
During the horrific events of the environmental crisis,
the EV push has immediately made a new demand.
European cities such as Madrid and Paris
and the Canadian province of British Columbia are among
the powers that drive internal combustion engines.
And California, which is suppressing smoke from devastating wildfires,
announced last month that it would ban the sale of new petrol-powered cars in 2035.
Auto Club Texas New arms race
By 2022, more than 500 different electric models will be available globally,
according to BNEF’s EV forecast.
It estimates that by 2040, more than half of all passenger vehicles sold will be electric.
A report released last December by the Institute for Defense Analysis,
a nonprofit that examines national security issues,
said battery manufacturers were “important” in the auto industry.
And warned that Europe has not integrated domestic goods on this scale.
If there are major disruptions or disruptions in some parts of the supply chain, it will be a loss.
Mary Nichols, chairman of California’s Air Resources Board,
made the remarks last month when she announced
the state’s plan to ban gasoline-powered cars.
A new arms race has begun.
It’s an electric race to get cheaper and more powerful batteries,
and it’s a world where manufacturers from all over the world are competing.