On a bi-weekly basis, CAR welcomes our audience to decompress with our President and CEO, Carla Bailo, as she covers and shares her thoughts on the latest Hot Topics happening in the automotive industry. While the biweekly newsletter primarily covers four topics, this feature story previews two of the topics covered on December 3, 2021. If you would like access to the full newsletter for better insights into critical industry issues you and your organization are facing, sign up for our mailing list here.

HOT TOPICS 11/29/2021 – 12/3/2021

EV Battery Materials

• Lithium Shortage May Stall Electric Car Revolution And Embed China’s Lead: Report
• GM to form new joint venture to produce crucial materials for EVs
• VW expects battery, raw material drive to cost up to $34 bln
• Stellantis locks in lithium supply agreement to secure EV battery materials
• For smooth EV adoption, secure battery materials
• Report: EV battery costs hit another low in 2021, but they might rise in 2022
• EV battery makers would like to move away from cobalt
• At a toxic lake in Calif., enough lithium to transform North America’s EV industry

Carla’s thoughts:

How many automakers hire geologists?  I’d venture to say – nearly none!  Yet, here we are facing raw materials shortages that require mining operations to fulfill the supply needed.  If we are going to tackle this within the automotives, we had better consider the talent needed to manage this side of the business.  Partnerships are starting to fill the gap for key materials, but outsourcing with internal knowledge is always dicey.

This supply chain issue is here to stay and this includes raw materials needed for electrification and beyond.  The time is now to take a long look at your company strategy and determine which raw materials/components you will manage yourselves and those you will continue to outsource.  This is the key to your company’s sustainability.  Then, this strategy needs to be continuously reviewed and updated and the world is moving at an exponential pace.

Geologists in automotive….who would have predicted this?

Vehicle Sales and Outlook

• New-Vehicle Sales Still Restricted by Low Supply in November; Demand Sustains Record-High Levels of Prices and Profits
• S. Auto Sales Seen Rising Slightly As Chip Woes Start To Ease; GM, Ford Stock Gained
• Auto executives say more than half of U.S. car sales will be EVs by 2030, KPMG survey shows
• Ford likely to have more EV sales than ‘all in’ GM for 2021, analyst concludes
• GM Lifts Forecast on Strong Sales, Chip-Shortage Workarounds
• Toyota, Honda, Hyundai, Kia sales fall 4th straight month
• 13% of Auto Sales in Europe Were Fully Electric Vehicles in October

Carla’s thoughts:

Interestingly, when the data is reviewed, the only winners are EV’s at this point.  EV sales continue to outpace the market percentages.   This does show a shift in buyers’ perceptions and a growing trend of EV adopters.  HOWEVER, we must keep in mind that most EV buyers are well above the average American household income and still have disposable income (from COVID lock-downs), so this data may be skewed.  CAR will continue to analyze these points.

Nobody predicted SAARs of 13. X early this year.  In fact, with SAAR of 18 in April, much more optimistic numbers were being tossed around.  The profitability of the automakers is still quite good, but these kinds of volumes can’t continue for too long or we will see a reversal in the profits.

Many automakers are starting to say they are seeing some relief in semiconductor shortages and others expect to be plagued well into 2022.  Frankly speaking, with the number of “smart” devices being introduced in every segment from agriculture to aviation to home appliances, this semiconductor issue might take quite a bit longer to be resolved.  And, let’s not forget the geology lesson in the first topic of this newsletter — we have many commodities to be “future-proofed”.

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