Electric Vehicle Battery Issues

The supply chain nightmare has been a wakeup call for many companies. Add to this the increasing tensions between the USA and China and what should a temporary problem caused by Covid could result in permanent issues for American and European companies. Electric vehicle battery issues came to mind as we read a recent article in The New York Times about Tesla’s efforts to secure a supply of nickel for its batteries. Nickel is added to lithium batteries to enhance performance at lower cost according to the Nickel Institute.

China’s Dominance of the Lithium Battery Supply Chain

China produces 80% of all lithium batteries. They also dominate in raw materials, both from mining in China and buying up mines across the world. So, even as Western companies develop their own sources of raw materials (lithium, nickel, cobalt) for electric vehicle batteries, they end up sending the ore to China for manufacture of batteries. The USA and Europe are scrambling to secure raw materials and to ramp up non-Chinese manufacturing. We have written about sourcing raw materials from Greenland and Bolivia. And now we see that Tesla is working to secure its nickel supply chain with a share of a mine in the South Pacific. From an American perspective, it is reassuring that Australia is the second largest producer of lithium after China.

Manufacturing Lithium Batteries Anywhere but in China

As Western companies rush to build up supply chains for nickel, cobalt, and lithium that do not depend on China they are also working to ramp up manufacturing in the USA. The current leaders in US lithium battery manufacturing are Tesla, Panasonic, LG Chemical, Duracell, and Samsung. From the US perspective it is good news that South Korea is the second leading lithium battery manufacturer and the US has moved up to fourth place. The US Department of Energy, under marching orders from President Biden, is leading the charge in efforts in increase lithium battery manufacturing capacity in the USA.

National Security, Essential Minerals, and Batteries

The Allied Powers won WWII largely because of America’s industrial and agricultural capacity. Food from the heartland fed soldiers fighting in the Pacific and European theaters as well as Russian soldiers on that front. The USA,  with its industrial heartland safe from German and Japanese bombing out produced the Japanese and Germans putting more ships, tanks, and planes to work while destroying production capacity in those countries. A third world war would likely to be short and extremely intense with the ability to resupply with troops and materials a critical factor in who wins. The fact that the West has outsourced so much manufacturing offshore and particularly to China has worried US strategic planners for years. The Covid crisis helped act as a wakeup call. Thus the Biden administration pushed through the infrastructure package and is helping lead the efforts to beef up US industrial capacity across the board and especially for the raw materials and manufacturing of items critical to continued economic and military dominance which, in the end, is what has helped avoid the next world war.

Electric Vehicle Battery Issues

Electric Vehicle Battery Issues – Slideshare Version

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