Experts say the likelihood that the U.S. will meet President Biden's goal that 50% of the cars on the road will be EVs by 2030 is doubtful. Why? Here's their take.
Semiconductor shortage
In reporting on Intel's quarterly earnings, Intel's chief executive Pat Gelsinger believes the global chip shortage will last into 2024 and not end in 2023 as originally hoped. Even with large plants being built in the U.S. to help address our dependence on foreign contract companies making chips, acquiring the equipment needed to manufacture them, not to mention the building materials shortage for the factories themselves, is proving difficult. Covid, labor shortages, and transportation woes have set back timing by months, if not a year or more.
In addition to the time it will take to construct the factories and source the equipment, typical lead times for manufacturing the chips can exceed four months for those already well established in a manufacturing line. Increasing capacity by moving a product to another manufacturing site usually adds another six months (even in existing plants), and switching to a different manufacturer typically adds another year or more because the chip's design requires alterations to match the specific manufacturing processes of the new partner. Some chips may contain manufacturer-specific intellectual property that require alterations or licensing, which adds more length to the timeline.
The semiconductor shortage currently hampering the auto industry, according to RJ Scaringe, CEO of EV startup Rivian, is just a "small appetizer to what we are about to feel on battery cells over the next two decades." And, with EV manufacturers' lofty production goals, every part of the supply chain is struggling to keep up.
Battery Cells Require Hard to Source Raw Materials
In addition to lithium, EV batteries require several raw materials to produce including cobalt, nickel, graphite, and rare earth. As EV demand has risen, raw material prices have gone through the roof. Lithium alone has gone up in price by over 480% in the past year, in part because of demand and in part because of its mining process.* Tesla CEO Elon Musk has said lithium battery prices were so “insane” that he might just get into mining himself.
"Most lithium, which is used in batteries, is mined in South America or Australia and shipped to China for processing, and then shipped to other parts of the world to be put in EVs," said Sam Abuelsamid, principal analyst on E-Mobility at Guidehouse Insights in Detroit. China is the world leader in lithium-ion battery manufacturing and has a history of restricting trade for political reasons. Russia produces about 20% of th