RJ Scaringe, CEO of Rivian, an American electric vehicle and automotive technology company, is warning that a shortage of electric vehicle (EV) batteries will soon impact the market, dwarfing the challenges posed by the shortage of semiconductors.
According to a report by the Wall Street Journal, Scaringe said, “Semiconductors are a small appetizer to what we are about to feel on battery cells over the next two decades.”
The comments were made to reporters during a tour of the company’s plant in Normal, Illinois.
Over the past two years, largely due to the COVID-19 pandemic, manufacturers of everything from vehicles to personal computers have been grappling with a shortage of semiconductors prompting many companies to slash production and cut electronic features like touch screens and seat heaters.
Rivian has said that it has been struggling to procure an adequate supply of semiconductors and has been forced to slash the company’s 2022 production targets by half.
Scaringe told Axios, “I’m on the phone with semiconductor supplier CEOs every day. It’s a day-in, day-out battle for allocation and the number we get is precisely equal to the number of vehicles we build.”
In a report published on Sept. 23, 2021, Alixpartners, a consulting firm, wrote that shortages related to semiconductors would cost the auto industry $210 billion in revenues in 2021 alone.
Auto makers that produce electric powered vehicles are now bracing for a potential critical shortage of EV batteries as well as the precious metals required to produce them.
According to the Wall Street Journal Scaringe said, “Put very simply, all the world’s cell production combined represents well under 10% of what we will need in 10 years. Meaning, 90% to 95% of the supply chain does not exist.”
In the face of this challenge Scaringe said that his company’s strategy for securing enough battery cells is to diversify the company’s suppliers and to build capacity to create its own.
Elon Musk, CEO of Tesla and SpaceX recently tweeted that he was considering getting into the mining game after a key precious metal, lithium, increased in price by what the tech CEO called an “insane level.”
“Price of lithium has gone to insane levels! Tesla might actually have to get into the mining and refining directly at scale, unless costs improve. There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow,” he tweeted.
Musk is well on his way to securing the amounts of lithium his company requires. According to Fortune, in 2020 Tesla secured the rights to mine lithium in Nevada after a deal to buy a lithium mining company fell through.
Musk’s efforts may not be enough to stave off shortages though. A report, published by the Center for Automotive Research (CAR) last year concluded that battery cell production will lag behind demand until at least 2030, resulting in an estimated shortage of over 18.7 million electric cars between the years 2022 and 2029.
EV batteries mired in controversy
Dozens of countries including Canada, Norway, and Germany have all announced future dates when vehicles with internal combustion engines (ICE) will no longer be permitted to be sold in their countries.
The policy changes have been met with considerable opposition with many arguing that EV batteries alone may pose more of a threat to the environment than the traditional internal combustion engine.
In a report on EV batteries by The Union of Concerned Scientists (UCS) the group raises several concerns.
First and foremost are concerns regarding the ethical procurement of materials used in EV battery manufacturing,
Most EV batteries are lithium based and rely on a mix of cobalt, manganese, nickel, and graphite. UCS points out that over 60 percent of the global supply of cobalt comes from the Democratic Republic of Congo (DRC) which has a poor human rights record and is accused of using exploitative labor practices in the mining of cobalt.
Mark P. Mills writing for the Manhattan Institute argues that “a single electric car battery weighing 1,000 pounds requires extracting and processing some 500,000 pounds of materials. Averaged over a battery’s life, each mile of driving an electric car ‘consumes’ five pounds of earth,” and that, “Using an internal combustion engine consumes about 0.2 pounds of liquids per mile.”
GetGreenNow, a blog that’s mission “is to educate the public about using Earth’s resources sustainably,” says that EV batteries “are made of relatively rare metals and minerals which are often sourced using environmentally-invasive mining techniques. And during the time an electric car is on the road, these batteries require electricity that may or may not be sustainably sourced.”
Most EV manufacturers warranty their batteries for 8 years or 100,000 miles, however with proper maintenance a user could extend the life of their batteries up to 17 years or 200,000 miles, without substantially restricting the overall range of the vehicle. This means the batteries may have to be discarded and replaced every 12.5 years or so.
According to a report by the UCS the production of a full-sized long-range electric vehicle adds about 6 tons of CO2 equivalent emissions to the atmosphere, 68 percent higher than the production of a comparable gasoline driven vehicle. Most of the increased emissions are a result of the battery manufacturing and resource extraction required for the battery.
Mills points out that a typical EV battery “contains about 25 pounds of lithium, 30 pounds of cobalt, 60 pounds of nickel, 110 pounds of graphite, 90 pounds of copper, about 400 pounds of steel, aluminum, and various plastic components.”
He concludes that to produce one 1,000-pound EV battery requires mining of about 90,000 pounds of ore which in turn requires digging and moving “between 200,000 and over 1,500,000 pounds of earth – a rough average of more than 500,000 pounds per battery.”