Hot Topics of 8/29/2022 - 9/2/2022 From CAR(la) - Carla Bailo President and CEO Center for Automotive Research
Dear Auto Channel Audience;
During these last few weeks of August, EV batteries were a major news item as automakers face ongoing battery supply challenges and look to invest more in US-based production. More in the EV space was significant news out of California with the ban of gasoline-powered vehicles by 2035. Lastly, we review interesting developments regarding driver assistance and vehicle safety systems.
As microchip shortages and other supply chain struggles continue to plague the automotive industry, we have migrated all news updates related to supply chain disruptions to our website. You can stay informed on the various supply chain crises affecting the global auto industry here.
If you missed my previous Hot Topics email, you can read it here.
We would love to hear from you and welcome your questions at any time. If you're interested in sharing your thoughts with us on hot topics, or if you would like to ask us a research question, please reach out to Sara Bozer.
Hot Topics of 8/29/2022 - 9/2/2022
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EV Battery Cost, Minerals, and Investments
My thoughts:
Automakers striving to receive the tax incentive of the Inflation Reduction Act (IRA) are facing one heck of a challenge. North America and our trade agreement partners simply do not have enough capacity for the automakers at present, and the creation of a new mine can take up to 10 years and a new refinery up to 2 years. As we all know, the mining industry virtually vanished due to health and safety concerns. It will be an uphill battle to gain the approvals needed and start operations in the timeframe required to meet the current standards. Canada has smartly begun to shorten approval cycles for raw material operations, and we have seen automakers flock to create agreements there. The US needs to move equally fast.
A fine example is Piedmont in North Carolina, which has been trying to obtain approval to mine lithium for over 2 years. We need to find a way to move rapidly in this arena to secure America's future without overreliance on China and others, which is required not only for the automotive sector but the defense, maritime, and mobility device sectors. The IRA has created the carrot for EVs to succeed, but we need to peel it and dice it to make it edible for all.
For a deeper dive on IRA and what it means for EVs with myself and CAR Research Director Bernard Swiecki, tune in to the latest episode of the CAR Podcast HERE>>>
California Ban
My thoughts:
This week, I attended the Transatlantic Transportation Decarbonization Summit, which included many automakers, NGOs, and government officials. All realize that these statements are very challenging (if not impossible) to achieve, but that if we didn't create such lofty goals, we definitely wouldn't achieve what we need from a carbon reduction/net zero standpoint. We discussed everything from EV infrastructure to raw materials to jobs – this is a very holistic situation, and we need to think about every element, or we will create unintended consequences. It requires the public and private sectors to work together as never before.
California has done an excellent job regarding EV infrastructure to pave the way to reach this goal. However, we need EVs to be affordable, every municipality to create fleets of zero-emission vehicles, every energy source to be renewable in all aspects, and more! Let's be careful not to move too quickly and be rational as we seek to meet these goals. And automotive companies need to speak up and be very clear about what is required to enable us all to achieve these lofty goals.
Driver Assistance Systems
My thoughts:
All ADAS systems require drivers to remain alert – this is why they are called "Advanced Driver Assistance Systems. I don't know about you, but I tend to get lazy when I rely on these systems. It becomes evident when I drive a vehicle (as I recently did in Wash DC) without these ADAS features. I felt like – OMG! Now I need to use my mirrors more frequently as there is no light telling me if someone is in my blind spot, and I actually need to turn around when backing up and more!
Yes, the automakers will continue improving these systems, but don't become complacent because you have these features. The systems are meant to assist you, not take over. Even if the system is called auto-pilot, it isn't. Then, as OEMs continue to improve these systems and take more manpower to do so, the price will increase for a while for "automated features." Eventually, it will come down, but this could be a while.
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Best Regards,
Carla Bailo
President and CEO
Center for Automotive Research
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