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The transition to electric vehicles, a race strewn with obstacles

Prompted by the authorities or by their own commitments, the main car manufacturers are aiming for a radical change: Replace combustion engines with electric systems. But to achieve their ambitious goals they will have to overcome many obstacles.

Will there be enough lithium and other raw materials needed to make electric batteries? Will there be enough charging stations? How to ensure that the offer is accessible to the most modest pockets?

After the success of the company Tesla, based on the manufacture of electric vehicles, most of the large groups in the sector plan to invest tens of billions of dollars in the coming years in this transformation.

Stellantis wants that by 2030 all the vehicles it markets in Europe will be electric; Toyota plans to launch 30 models in this segment by the same date and General Motors aims to stop producing cars with combustion engines by 2035.

Insured demand

The European Union has also taken steps to ban the sale of gasoline or diesel carsand even hybrids, by 2035, while China wants at least half of all new cars to be electric, plug-in hybrid or hydrogen by that date.

Automakers are warned that “it depends on them to prepare their stocks,” remarks Jessica Caldwell, from the specialized firm Edmunds.

Until recently it was said that the challenges for the adoption of electric vehicles would be the acceptance by motorists and the price, the expert observes.

But driven by consumers increasingly sensitive to impacts of climate changethe demand is there.

In the United States, for example, General Motors claims to have more than 150,000 pre-orders of the electric version of its Silverado truck, which will only be available in 2023.

And access to a Tesla, the leading brand in the sector, requires several months of waiting.

“The biggest question right now seems to be whether you can get the materials you need” to make these vehicles, Caldwell says.

Drastic changes”

Karl Brauer, an analyst at specialist website iseecars.com, agrees, saying that whatever government incentives are offered to EV buyers, the necessary items may not be available.

“Right now, we have a shortage of palladium, nickel and lithium. Everything that is needed to build an electric car is harder to come by than it was six or 12 months ago,” he told AFP.

Although the problem is largely related to the conflict between Russia and Ukraine, “a year ago nobody would have foreseen the escalation in prices or the difficulties in obtaining these materials,” he says.

Manufacturers are trying to limit that shortage by building their own battery factories, creating joint ventures with specialized manufacturers or teaming up with miners.

The German groups Volkswagen and Mercedes-Benz signed agreements with the Canadian government on Monday to ensure the supply of rare metals.

But the market is still global, Brauer reminds: as long as the offer is limited, “there will always be someone who pays a little more”.

Other aspects of the transition to electric systems, such as the conversion of production lines, are easier to solve “because they are controllable,” he says.

Conditional aid

Local regulations can also complicate the task.

In the United States, a recent law conditions a subsidy of 7,500 dollars for the purchase of an electric car to items such as final assembly being done in North America.

The Automotive Innovation Alliance, a US industry lobby, estimated that about 70% of the 72 electric, plug-in hybrid or hydrogen models currently available on the market could not, as they are, benefit from such a subsidy.

For Garrett Nelson, CFRA analyst, this new law will clearly favor Tesla, GM and Ford in the United States, to the detriment of European and Asian manufacturers.

Following California’s announcement on Thursday, the Automotive Innovation Alliance said it would be “extremely complicated” meeting sales requirements due to “external factors” such as inflation, supply chains and charging infrastructure, as well as the current shortage of semiconductors.

“These are complex, intertwined, global issues that are beyond the control of (California authorities) or the auto industry,” he said in a statement.

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