Battery Crisis in Automotive

Demand for electric vehicles is much higher than expected. The automotive industry is preparing for production to meet this demand, but we are facing a critical global problem: The battery problem. Even if infrastructure problems are solved at the global production and supply stage, it is rumored that the problem of supply as a resource will increase in the near future. Experts state that the real crisis awaiting the automotive world will arise in battery supply. According to experts, this problem will become even more challenging in the coming years. It is estimated that the possible repercussions of the battery crisis, which is a much bigger crisis in the automotive industry, which has recently been recognized as the sector that has suffered the most from the global semiconductor crisis, will create a deep crisis. According to the Allianz Trade report, the cost of the chip crisis to the European automotive sector could reach 100 billion Euros, while it is stated that this crisis will be very light compared to the battery crisis.

From mobile phones to laptops and notebooks, lithium is the high-tech favorite and is obtained from lithium ion batteries (Li ion). With more than 90 per cent of the global grid market, Li-ion was the most popular battery storage option. However, Li-ion batteries, which are preferred because they store energy in the most efficient way, have lost their popularity due to the fact that lithium, a chemical element in its content, is not environmentally friendly. Awareness has grown that huge lithium reserves consume a lot of water and cause destructive water-related conflicts among local communities. The volume of water used in the production of lithium is reportedly 2.2 million liters per tons of lithium. On the other hand, fuels, which have a significant share in the climate crisis and carbon emissions, necessitate the widespread use of electric vehicles.

According to research, transport accounts for about 27 per cent of total emissions. Fossil fuels, which are used in very high amounts worldwide, trigger air pollution and climate crisis by increasing the rate of carbon dioxide in the atmosphere as they emit carbon dioxide when burned.  It is stated that there are 37 trillion tons of carbon dioxide emissions in the world and 52% of these figures are from Asia, 18% from North America and Mexico, 17% from Europe; China alone causes 7% of this emission rate. With the increasing awareness of the climate crisis, giant brands in the automotive industry have been forced to seek a meaningful solution to combat the climate crisis by increasing their investments in consumer research.

The automotive industry has already turned its eyes to electric vehicles, which create intense demand in the fight against the climate crisis. Electric vehicles are seen as an important way out of the climate crisis. However, the issue that plays a critical role in the production and popularisation of electric vehicles is the battery.  In this sense, extraordinary investments continue to be made in R&D and solution practices for the charging infrastructure problem and battery production. However, the fact that there is not enough time to wait for long-term developments in the fight against the climate crisis, and the need to spread the measures rapidly in the world as soon as possible, causes supply-demand imbalance in battery production and supply of raw materials and components. In purchasing and stocking, there is a supply shortage that ultimately affects the entire industry. Experts explain that in this sense, the chip crisis will remain peanuts in the face of the battery crisis.

Despite decades of experience in managing large supply chains, many car manufacturers have been overwhelmed by major problems in the supply of raw materials and vehicle components needed for electric vehicle production. Some manufacturers anticipated this crisis and invested heavily to take precautions.

The giant organization Tesla has established an important partnership with the global brand Panasonic for the Gigafactory Nevada project, where it produces battery cells and other electric vehicle components. Tesla also announced that it has provided investments to its battery manufacturer partners for the supply of raw materials and focused on this area by starting the production of its own battery cells. Tesla plans to produce 20 million vehicles and an estimated 2-terawatt hours of battery production in 2030.

Volkswagen, the giant car brand, announced plans to invest over $ 100 billion in its ten-year global electric vehicle production lines. Volkswagen also reported that it has partnership initiatives to build battery factories in Europe and the Americas and to bring some supply materials and other raw materials into its inventory already.

Ford Motor announced that it is targeting $50 billion for electric vehicle production and at least 240 gigawatt hours of battery production. It was announced that the brand’s production plan for 2030 is 3 million vehicles.

Mercedes Benz aims to produce 47 billion dollars and 200 gigawatt hours of battery production for electric vehicle production and R&D.

BMW, Stellantis and General Motors each stated that they are preparing an investment plan of at least 35 billion dollars each for vehicle and battery production. Stellantis, the brand that made the most important announcement in battery production, announced its target as a battery capacity of 400 gigawatt hours in 2030.

Rivian, another important brand, stated that it follows a similar strategic approach and announced that it has partnered with many different suppliers and will continue its efforts to produce its own battery cells.

US President Joe Biden signed the “Creating Complementary Incentives to Produce Semiconductors (CHIPS) and Science Act” to increase domestic production and called on Japan to co-operate in production. While formulas are sought for joint solutions of global organizations for production, investments in this field are promising.

Experts state that according to research, the number of electric cars in traffic reached 7.5 million last year and 4 million electric vehicles were sold in Europe alone. In our country, this figure is stated as 6 thousand electric cars as of today. On the other hand, it is predicted that it will become impossible to sell internal combustion engine vehicles in many countries, especially in European countries. However, for this, the costs of electric vehicles must first be reduced. On the other hand, it is discussed that problems such as the shorter range of electric vehicles compared to today’s fuel vehicles, the scarcity of charging units and supply problems will cause a significant crisis. Automotive manufacturers around the world continue their efforts to popularize electric charging stations. In Turkey, there are currently charging stations spread across 81 provinces, but it is stated that a little more time is needed to bring this infrastructure to the districts. Based on its forecasts, the Rivian brand announced that the battery crisis will deepen in the next 20 years. Projects and R&D activities on the use of solar energy and studies on the use of installed power of around 1 terawatt worldwide in solar energy are promising. Time will tell how these developments will reverberate in the automotive sector and how transport will be shaped.