energy insights

Missing Link of E.V. Supply Chain Worries American Automakers

American physicist, John Goodenough, won the Nobel Prize in Chemistry for his work in developing a cathode of lithium ions, which paved the way to the rechargeable lithium-ion battery and set into motion the world’s electric-vehicle revolution.

The technology was quickly commercialized in the 1980s by a Japanese electronics company and Asia has been manufacturing cathode materials for America ever since, with China controlling more than 80% of cathode materials processing capacity. Elements.

The cathode is the most valuable component of a lithium-ion battery, accounting for just more than 50% of its cost.

EV supply chain seen as weak link

In recent years, U.S. electric car makers and industry watchers have worried about gaps in an anemic American battery manufacturing supply chain, consisting of a struggling lithium mining industry and a lean inventory of battery manufacturing plants. But the biggest concern has been the lack of domestic cathode active material production, which is at the heart of the cathode technology Goodenough initiated from his University of Texas lab in the 1980s.

U.S. automakers are all in on making electric vehicles these days, and that’s a good thing, but they may have put the car before the battery. They must rely on China for the battery materials that power their cars, especially the lithium required in the production of cathode materials.

An industry analysis recently published by the Wall Street Journal summed it up this way.

“U.S. auto makers are pouring billions of dollars into domestic EV factories and lithium-ion battery plants to supply them,” wrote Wall Street Journal editor Stephen Wilmot. “General Motors announced $6.6 billion of EV investments into two Michigan plants… Ford announced similar projects in Tennessee and Kentucky…

“Move further upstream in the U.S. EV supply chain, though, and the torrent of capital turns into a trickle,” Wilmot wrote. “Unless that changes, the headlong pursuit of EVs in Detroit and California risks replacing the American driver’s dependence on Middle Eastern oil with an equally problematic reliance on Chinese battery materials.”

Domestic production plans underway

In an announcement late last year, GM signaled that relief is on the way. The company is partnering with South Korean battery maker Posco Chemical to build a new cathode material manufacturing plant in the U.S. and by 2024, the facility will begin supplying GM battery plants with American-made cathode materials.

GM’s move toward a U.S.-made cathode materials supply may signal a new era for the U.S. EV industry. Whether they like it or not, U.S. automakers have found themselves in the driver’s seat of an EV industry that involves far more than just making cars.

“U.S. car makers are tentatively leading the upstream supply-chain push,” says Wilmot. “The future of EVs is often assumed to depend on solving consumer problems such as slow charging infrastructure and range anxiety. Instead, they could be slowed down more by the conundrum of building the foundations of a battery industry.”