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

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

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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Carla Bailo

Carla Bailo

President & CEO

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