He brings up two huge choke points about electric cars supposedly being the future of the industry…
Never did I think I would be agreeing so much with Carlos Tavares, CEO of Stellantis, but it’s 2022 and the world is turning upside down. At a time when baby formula is scarce, Americans are waiting months to buy average commuter cars, and there’s real talk about a food shortage coming, nothing is normal. Perhaps all that has helped to open the eyes of Tavares and others. I’m referring, of course, to the automotive executive’s recent comments which were surprisingly critical of the shift to battery-electric vehicles.
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Tavares rightly pinpointed one of the biggest problems with all these breathless declarations that “electrification is the future.” While addressing the crowd at the Financial Times Future of the Car 2022 conference recently, the CEO turned his attention to the battery shortage plaguing the industry. He also touched on the raw materials shortages, casting serious doubt on the ability to scale up battery manufacturing, something I and many others have always felt is one of the big choke points in the switch to electrification.
He went on to note, "And if there is no short supply of batteries then there will be a significant dependence of the Western world vis-à-vis Asia. That is something we can easily anticipate." The man didn’t want to specifically say a dependence on China, but there’s little doubt that’s what he really meant. With how aggressive The Red Dragon has been toward the West lately, including going hard against Australian imports like wine, being overly dependent on the communist dictatorship seems incredibly unwise. I’ve long been mystified why so many capitalists don’t understand this obvious point. Maybe a great awakening is dawning. Sure, it’s a little late, but at least it might finally be happening.
By about 2025 to 2026, Tavares believes the automotive industry will suffer a battery shortage problem thanks to supply shortages. That’s right, the man who runs Stellantis, which has been talking up electrification big in the past year or so, thinks automakers are going to run off a cliff if they put all their chips on EVs.
This is troubling for a much deeper reason: the supply shortages we’re suffering through in the automotive industry and in general aren’t going to ease up, despite people saying we’re almost to the other side. That starts to throw a monkey wrench in the assertion these shortages were caused solely by the pandemic, or more specifically government responses to the spread of covid. If such shortages continue, it’s obvious something or multiple somethings are driving market responses artificially.
It gets even better. During Tavares’ address, he brought up another inconvenient truth: the reality of how raw materials for EV batteries are extracted from Earth. Now, he said the industry won’t “like” it “in a few years.” But let’s face it, the way those minerals are mined right now often involves ecological devastation and child labor with horrific health consequences. To turn a blind eye to that is borderline criminal. Too often, Western countries of late have played the game of exporting the “yucky” parts of industry to nations in the East so they can pretend they’ve “gone green” and cleaned up their act entirely. That’s led to all kinds of unpleasant realities, like Europe becoming all too dependent on Russia for oil. Imagine if a similar uncomfortable reality about relying on China for lithium-ion batteries suddenly came in sharp focus for industry leaders? Right now it’s on their peripheral vision, but it’s entirely possible that notion will shift to sharp focus soon enough.
Finally, Tavares touched on one of the other huge choke points for EVs: how they’re charged. “Where is the clean energy?” he asked. “Where is the charging infrastructure?” Yes, indeed, why are these things not being resolved rapidly if governments are going to essentially legislate everyone buy EVs? This is a train wreck happening in slow motion. I think many officials will have to walk back the rash regulations put in place by their predecessors who’ve used them to get re-elected and gain breathless adoration from unquestioning journalists acting more as cheerleaders than truth seekers.
I fully admit to not having been a fan of Tavares since Stellantis was formed. However, if the guy keeps talking this way and backs that up with actions, he just might win me over yet.
Source: Automotive News