This week, the conversation surrounding electric vehicles heavily focused on battery materials as automakers work to secure supplies ahead of the competition. There was also some interesting news in the autonomous space regarding Robotaxis becoming more publicly available. And finally, we are tracking announcements for global auto sales and forecasts.

As the microchip crisis continues to plague the automotive industry and beyond, we have migrated all news updates related to the shortage to our website. You can stay informed on the automotive impact of the global chip shortage by visiting here.

If you missed my previous Hot Topics email, you can read it here.

We would love to hear from you and welcome your questions at any time. If you're interested in sharing your thoughts with us on hot topics, or if you would like to ask us a research question, please reach out to Katie Ramsburgh.

Hot Topics of 11/29/2021 - 12/3/2021

EV Battery Materials

• Lithium Shortage May Stall Electric Car Revolution And Embed China’s Lead: Report
• GM to form new joint venture to produce crucial materials for EVs
• VW expects battery, raw material drive to cost up to $34 bln
• Stellantis locks in lithium supply agreement to secure EV battery materials
• For smooth EV adoption, secure battery materials
• Report: EV battery costs hit another low in 2021, but they might rise in 2022
• EV battery makers would like to move away from cobalt
• At a toxic lake in Calif., enough lithium to transform North America's EV industry

My thoughts:

How many automakers hire geologists? I’d venture to say – nearly none! Yet, here we are facing raw materials shortages that require mining operations to fulfill the supply needed. If we are going to tackle this within the automotives, we had better consider the talent needed to manage this side of the business. Partnerships are starting to fill the gap for key materials, but outsourcing with internal knowledge is always dicey.

This supply chain issue is here to stay and this includes raw materials needed for electrification and beyond. The time is now to take a long look at your company strategy and determine which raw materials/components you will manage yourselves and those you will continue to outsource. This is the key to your company’s sustainability. Then, this strategy needs to be continuously reviewed and updated and the world is moving at an exponential pace.

Geologists in automotive….who would have predicted this?

Robotaxis

• San Francisco agency opposes Cruise robotaxi application, citing safety
• Baidu kicks off its robotaxi business, after getting the OK to charge fees in Beijing
• Lyft and partner to launch fully driverless public ride-hail service in Las Vegas
• Driverless car start-up WeRide partners with major Chinese automaker GAC on robotaxis as competition rises

My thoughts:

Today, I heard another roboshuttle announcement with Nuro and 7-Eleven. I think this is fabulous considering what is happening with the supply chain of goods and lack of workforce. It is vital that these robo-taxis for commercial purposes continue and that we all learn how to incorporate these in our delivery plans.

Further, it is great to see more experiments for robo-taxis. These kinds of tests provide ample data for the entire industry to learn. It is these kinds of ride-sharing products that will allow for the democratization of mobility and mobility equity. We have a large number of people here in the US that simply can’t afford to own a car and many others who simply don’t want to own a car. 

Lastly, as an industry, we must work together to figure out the policies, regulations, standards for the deployment of robo-taxis. Allowing states and municipalities to establish the rules won’t work - we need nationwide standards. Let’s pledge to work together to make this happen.

Vehicle Sales and Outlook

• New-Vehicle Sales Still Restricted by Low Supply in November; Demand Sustains Record-High Levels of Prices and Profits
• U.S. Auto Sales Seen Rising Slightly As Chip Woes Start To Ease; GM, Ford Stock Gained
• Auto executives say more than half of U.S. car sales will be EVs by 2030, KPMG survey shows
• Ford likely to have more EV sales than ‘all in’ GM for 2021, analyst concludes
• GM Lifts Forecast on Strong Sales, Chip-Shortage Workarounds
• Toyota, Honda, Hyundai, Kia sales fall 4th straight month
• 13% of Auto Sales in Europe Were Fully Electric Vehicles in October

My thoughts:

Interestingly, when the data is reviewed, the only winners are EV’s at this point. EV sales continue to outpace the market percentages. This does show a shift in buyers’ perceptions and a growing trend of EV adopters. HOWEVER, we must keep in mind that most EV buyers are well above the average American household income and still have disposable income (from COVID lock-downs), so this data may be skewed. CAR will continue to analyze these points.

Nobody predicted SAARs of 13. X early this year. In fact, with SAAR of 18 in April, much more optimistic numbers were being tossed around. The profitability of the automakers is still quite good, but these kinds of volumes can’t continue for too long or we will see a reversal in the profits.

Many automakers are starting to say they are seeing some relief in semiconductor shortages and others expect to be plagued well into 2022. Frankly speaking, with the number of “smart” devices being introduced in every segment from agriculture to aviation to home appliances, this semiconductor issue might take quite a bit longer to be resolved. And, let’s not forget the geology lesson in the first topic of this newsletter --- we have many commodities to be “future-proofed”.

Best Regards,

Carla Bailo
President and CEO
Center for Automotive Research