Automakers are spending billions to produce battery cells for EVs in the U.S.

Asia's Tech News Daily

Dane Hardware (right), Ford design and release engineer, and Mary Fredrick, Ford battery validation engineer, measure the voltage of a battery using a digital multimeter at Ford's Battery Benchmarking and Test Laboratory in Allen Park, Michigan.Ford

As supply chains remain in distress across the globe, automakers are spending billions to move production of battery cells to their home countries to meet what's expected to be rapidly growing demand for electric vehicles over the next decade.

Automakers from Detroit to Japan plan to simplify supply chains to lower costs, ease logistics and avoid massive disruptions. A global shortage of semiconductor chips has highlighted the industry's reliance on overseas manufacturers for the parts.

U.S. automakers are also hoping to appease the Biden administration, which has called for companies to bring supply chains to the U.S.

Other than Tesla, the country's electric vehicle sales leader, automakers have been reluctant to invest in battery cell production until recently. Instead, they've relied on suppliers, largely based in Asia, to build such parts. Many, including Tesla, have or plan to partner with battery cell suppliers such as Panasonic and LG Chem to produce the parts.

“There's the rapid electrification that's going to happen, plus the Covid-19 semiconductor shortage has really taught us that we need to do more than just rely on battery as a commodity,” said Arun Kumar, a managing director in the automotive and industrial practice at AlixPartners. “You're going to see this accelerate even more, in our viewpoint, primarily because localization becomes an important factor, if you really think about producing batteries at scale.”

Electric vehicles are powered by battery packs that have modules, which hold the cells. The packs are by far the most important and costly part of an EV. They can also weigh hundreds to thousands of pounds, making shipping more difficult than smaller items such as small semiconductor chips.

$330 billion in EVs

Based on a rolling five-year average of announced investments, AlixPartners expects companies to invest $330 billion in the next five years throughout the EV supply chain globally. About a third of that is expected to be for batteries, largely in the China and Europe, while the U.S. attempts to catch up.

That forecast is up by 65% from an expected $200 billion from 2018, according to Kumar.

“Electrification is occurring faster than many were thinking even a few years ago,” he said. “The plans OEMs have in place have started to change dramatically.”

The investments are being made in preparation for new demand. While plug-in vehicles, including all-electric and plug-in hybrids, are forecast to only account for 4% of the U.S. market this year, there's expected to be a rapid adoption globally over the next decade, including the U.S.

AlixPartners expects about 28% of vehicles globally to be EVs by 2030. In the U.S., LMC Automotive expects about a third of new vehicles sales in the U.S. to be EVs by then.

Panasonic, led by Tesla, is the country's largest producer of battery cells, according to a report by Argonne National Laboratory that was written for the U.S. DOE's Office of Energy Efficiency & Renewable Energy. The Japanese company supplied battery cells to 70.9% of vehicles sold in 2020 in the U.S., according to the report.

But others, such as LG Chem and SK Innovation, are partnering with automakers and making their own moves.

'Increasingly going vertical'

Automaker Stellantis, formerly Fiat Chrysler, and LG Chem's Energy Solution spinoff on Monday announced an agreement to form a joint venture to produce battery cells and modules for North America. The companies did not provide financial details, but it will add to billions in already announced investments.

Toyota Motor on Monday also said it plans to invest about $3.4 billion (380 billion yen) on automotive battery development and production in the United States through 2030, including a new $1.3 billion battery plant.

“The 10s of billions of dollars that are being invested by most of the big automakers over the next five to 10 years on making the transition to electric, the last thing they want to do is be stuck without key components that they need whether it be batteries or chips,” said Guidehouse Insights principal analyst Sam Abuelsamid. “They are increasing going vertical in some cases or diversifying their supplies in other cases.”

The announcements Monday come after Ford Motor said last month it will invest more than $11.4 billion in new U.S. facilities that will create nearly 11,000 jobs to produce electric vehicles and batteries, including twin lithium-ion battery plants in central Kentucky through a joint venture with SK Innovation.

“Due to Covid and now the reaction to the semiconductor shortage, our government and companies are looking to onshore,” said James Lewis, a senior vice president with the Center for Strategic and International Studies, which works with automakers. “Car companies in particular don't want to get caught out again the way they were caught out on chips.”

U.S. plants

Following Tesla's lead, General Motors could be next to produce it's own battery cells and packs in the U.S. Through a joint venture with LG Energy Solution, the Detroit automaker is scheduled to begin cell production at an Ohio plant next year. The plant is expected to be the first of at least four, including another announced in Tennessee, in the coming years.

There are 27 battery facilities, including cells and packs, that have been announced or are currently operating in the U.S., according to the Center for Automotive Research.

Separately from the battery plant announcements, iPhone maker Foxconn, which is preparing to produce EVs, on Monday said it plans to produce electric cars and buses for auto brands in China, North America, Europe and other markets.

The Taiwanese company last month announced it will purchase an Ohio factory from embattled EV start-up Lordstown Motors for production of a vehicle for the company as well as EV start-up Fisker.

“This is the wave of the future,” Lewis said. “This is a modernization of our auto industry.”

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

FTSE-100 property giant Land Securities to kick off hunt for next chair

Cressida Hogg is likely to step down as chair of the commercial real estate group in 2023, when she will have served on Landsec's board for nine years, Sky News learns. Read more »

Petrol, diesel prices on November 27: No change in fuel rates for 23rd straight day

The petrol and diesel prices remained unchanged in Kolkata at Rs 104.67 per litre and Rs 89.79 per litre, respectively. (Representative image) Petrol and diesel prices remained the same for ... Read more »

Covid variant puts stock markets on the wrong foot

At 10.56 am, 55 minutes later than planned, the KL592 from Johannesburg landed at Schiphol on Friday morning. Twenty minutes earlier the KL598 from Cape Town had already landed in ... Read more »

Stock market blog: Wall Street is also losing a lot due to corona variant

Unibail-Rodamco-Westfield was the biggest loser with a loss of 11.9%, followed by Air France KLM (-9.7%) and Aegon (-8.9%). Flow Traders was the big winner, up 2.9%. The US stock ... Read more »

Zo reageert Nederland op nieuwe klap in crisis: ‘Er is geen touw aan vast te knopen'

Sebastiaan Quekel, Carla van der Wal, Edwin Van Der Aa 26-11-21, 20:30 Laatste update: 20:56 Cultuur In de evenementenbranche komen de nieuwe maatregelen als een mokerslag aan. ,,Als branche die ... Read more »

Stores kick off Black Friday but pandemic concerns linger

The fallout from the pandemic continues to weigh on businesses and shoppers’ minds. Read more »

Postbus bv is about more than tax

The Netherlands has long been a sanctuary for the international capitalist, but what is it now? Those who wanted to avoid tax (or pardon: optimize) set up a letterbox company ... Read more »

The world needs more Elon Musks to turn zero-emission planes and ships into commercial reality to help reverse climate change

When Tesla beat expectations in 2017 and delivered 102,000 electric cars to customers, the feat inspired an entrepreneur born in the former Soviet Union to think big: one day, battery ... Read more »

These 8 stocks rose more than 10% each in December month of last three years

The Indian market has been weak for over a month now. The benchmark index Sensex has fallen about 3,000 points, or 5 percent, from its closing high of 61,765 during this period. ... Read more »

Marketers, digital is the new real world

The virtual space is the new real world for marketers. The marketing warfare, therefore, needs to be different from that of the times of our fathers, and it is only ... Read more »

Disney to spend $33B next year on new shows, outspending Netflix

Disney said it will raise its content spend to $33 billion in fiscal 2022, outspending rival, Netflix. AaronP/Bauer-Griffin/GC Images Disney said it plans to amp up what it spends on ... Read more »

China reportedly pressuring Didi to delist from NYSE

China‘s powerful Cyberspace Administration of China has asked Didi to take the company off the New York Stock Exchange due to worries about leakage of sensitive data, Reuters reports. SOPA ... Read more »

Wipro's culture is changing but values will not: Rishad Premji

Rishad Premji “Stay humble, stay hungry” was an advice that Rishad Premji always followed, given by his father Azim Premji, said Rishad Premji while speaking at an event on November ... Read more »

Oil plunges 10% on new coronavirus variant concerns

crude oil. Representative Image Oil prices plunged more than 10 percent on Friday, the largest one-day drop since April 2020, as a new COVID-19 variant spooked investors and added to ... Read more »

PostNL works council loses case against postal company

Photo: ANP Thousands of PostNL employees are not entitled to, for example, certain paid breaks and a number of other extra allowances. The works council of the postal company had ... Read more »

OPEC+ reportedly does not want to further expand production

Photo: ANP The countries of the oil cartel OPEC and allies such as Russia are thinking of canceling the planned easing of oil production for January. That writes Bloomberg news ... Read more »

P&G recalls certain Old Spice, Secret products as it suspects presence of cancer-causing chemical

Procter & Gamble Co (P&G) (Image: Shutterstock) The US-based consumer goods giant Procter & Gamble Co (P&G) has recalled certain aerosol deodorants and sprays of its two brands – Old Spice ... Read more »

Look for leaders with humility and flexibility: Nisaba Godrej

Nisaba Godrej, Executive Chairperson, Godrej Consumer Products Ltd. Organisations may look for leaders who have empathy, humility and flexibility, and they should be comfortable with the digital world, said Nisaba ... Read more »

This is how the Netherlands reacts to a new blow in crisis: ‘This is a 100 percent lockdown for us' Economy

reactionsEvening life is completely restricted in the Netherlands. Almost all businesses will have to close their doors from 5 p.m. in the near future. Primary and secondary schools will remain ... Read more »

‘I'm really not going to order game for Christmas'

Is it still fun to be a catering entrepreneur? Karin van Asperen, owner of cafe ‘t Heertje in Weesp, is no longer enthusiastic. “My motivation has really gone to zero. ... Read more »

OPEC+ reportedly no longer wants to expand oil production

The countries of the oil cartel OPEC and allies such as Russia are thinking of canceling the planned easing of oil production for January. That writes Bloomberg news agency on ... Read more »

‘With a hundred million you can also feel poor'

The least worn item of clothing by the ultra-rich? winter coats. Sure, they’ll probably have a lot of them in their closet – for hunting, winter sports, the few yards ... Read more »

Old Spice, Secret deodorant sprays recalled over cancer-causing chemical

Proctor & Gamble recalled a host of Old Spice and Secret deodorants due to a chemical that could cause cancer. Proctor & Gamble said it is voluntarily recalling certain Old ... Read more »

Peloton sues Lululemon in battle over bras and leggings

Peloton took preemptive action against Lululemon after the women’s sports apparel company threatened to sue Peloton over its launch of a clothing line. Getty Images Peloton has sued Lululemon after ... Read more »

Canada releases 50 million pounds from maple syrup reserve amid global shortage

The Quebec Maple Syrup Producers are releasing 50 million pounds of maple syrup from its strategic reserves. Universal Images Group via Getty The Biden administration is trying to reign in ... Read more »

Stocks making the biggest moves midday: Moderna, United Airlines, Zoom and more

Moderna's sign is seen outside of their headquarters in Cambridge, MA on March 11, 2021.Boston Globe | Getty Images Check out the companies making headlines in midday trading Friday: United ... Read more »

49% of consumers plan to shop Small Business Saturday. These tips can help

A sign reading “Shop Local” with closed restaurants and shops on Main Street on April 10, 2020 in Livingston, Montana.William Campbell | Getty Images While Black Friday may be the ... Read more »

Russia sends drug substance for production of coronavirus vaccine to Kazakhstan — senator

The Speaker of the Federation Council drew attention to constant contacts at the highest level, as well as an active dialogue between parliamentarians Read more »

Georgia outlines plans to improve slow pace of rental help

ATLANTA — Georgia officials struggling to distribute federal funds to prevent evictions have outlined plans to increase the speed at which they get the money to landlords and renters. The ... Read more »

Etsy sellers and other small businesses are betting on local sourcing to win the holiday

Darin Mays makes wood tables and sells on Etsy. He sources locally and can quickly navigate supply headaches plaguing other retailers.Larry Falk | CNBC This holiday season, Darin Mays isn't ... Read more »

Peloton has sued Lululemon in feud over cycle maker's new apparel line

Cari Gundee rides her Peloton exercise bike at her home on April 06, 2020 in San Anselmo, California.Ezra Shaw | Getty Images Peloton has sued Lululemon after the leggings maker ... Read more »

Vaccine makers move quickly against new omicron Covid variant, testing already under way

A vial of Pfizer-BioNTech Covid-19 vaccine.Getty Images The world's major manufacturers of Covid-19 vaccines said Friday that they are working to quickly investigate and adapt their shots to a new ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic