Photo: Mercedes-Benz
Once the traditional carmakers have joined the EV revolution, many believed they would blow Tesla out of the water with their capacities. But the problem is more complicated than it seems, and for EV production to work, there needs to be a flourishing battery production in place first. Luckily, there’s another revolution in the making, and this is for the North American battery production facilities.
Elon Musk once warned traditional carmakers that to be successful in the EV business, they need to secure the battery supply “all the way to the mine.” Indeed, that’s what Tesla did, buying mineral mines and controlling the whole production chain, from mining to battery production to cars rolling off the production lines. It’s what made Tesla’s business so successful and also so hard to compete with.
But this doesn’t mean the established auto industry will not start to gain steam with EV production rather sooner than later. If we consider the enormous investments the traditional carmakers have announced in the past year alone, we see the second EV revolution has just started. According to Automotive News, we’re talking about $13.5 billion in investments in battery factories across North America, but this might only be the tip of the iceberg. Just look at Stellantis’s recent announcement of a massive $4.1 billion battery plant in Ontario.
Besides the investments that the carmakers made clear are destined for battery production, there are countless combined projects for car and battery manufacturing facilities. Ford and SK Innovation plan to spend $5.6 billion to build the Blue Oval City project in Tennessee, without detailing how much will be spent on EV production and how much on battery production. A similar situation is at Volkswagen of America, whose $7.1 billion war chest will be used for both car and battery production in North America.
And then there are the projects that have been announced by global battery producers but without deciding on a place of production. We count here CATL’s decision to build a $5 billion battery plant in North America. Panasonic is also in the decision phase with a North American site for a plant to supply Tesla, as well as Envision AESC to build a plant to support Mercedes-Benz EV production in Alabama.
Either way, there are interesting times ahead of us. As it seems, the world will produce so many batteries that the automotive industry will be forced to switch to electric vehicles. The only problem remains the ever-increasing cost of raw materials and securing the supply chain “all the way to the mine.”
But this doesn’t mean the established auto industry will not start to gain steam with EV production rather sooner than later. If we consider the enormous investments the traditional carmakers have announced in the past year alone, we see the second EV revolution has just started. According to Automotive News, we’re talking about $13.5 billion in investments in battery factories across North America, but this might only be the tip of the iceberg. Just look at Stellantis’s recent announcement of a massive $4.1 billion battery plant in Ontario.
Besides the investments that the carmakers made clear are destined for battery production, there are countless combined projects for car and battery manufacturing facilities. Ford and SK Innovation plan to spend $5.6 billion to build the Blue Oval City project in Tennessee, without detailing how much will be spent on EV production and how much on battery production. A similar situation is at Volkswagen of America, whose $7.1 billion war chest will be used for both car and battery production in North America.
And then there are the projects that have been announced by global battery producers but without deciding on a place of production. We count here CATL’s decision to build a $5 billion battery plant in North America. Panasonic is also in the decision phase with a North American site for a plant to supply Tesla, as well as Envision AESC to build a plant to support Mercedes-Benz EV production in Alabama.
Either way, there are interesting times ahead of us. As it seems, the world will produce so many batteries that the automotive industry will be forced to switch to electric vehicles. The only problem remains the ever-increasing cost of raw materials and securing the supply chain “all the way to the mine.”
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