Driven by the authorities or their own obligations, major car manufacturers have initiated a radical shift towards the end of combustion engines and the emergence of electric cars. But to achieve their ambitious goals, they will have to overcome many obstacles.
Will there be enough lithium and other raw materials to make electric batteries? Enough chargers? How do you ensure that the cars do not cost too much for the most modest wallets?
After the success of Tesla, built entirely on electric vehicles, most of the big groups in the sector plan to invest tens of billions of dollars in the coming years to transform themselves.
Stellantis (PSA-Fiat-Chrysler) wants to sell 100% of electric vehicles in Europe by 2030. Toyota plans to launch 30 models in this segment by the same date. General Motors aims to stop producing cars with internal combustion engines by 2035.
They are encouraged in this direction by the authorities.
The latest, California, on Thursday banned the sale of traditional new cars starting in 2035.
– Demand secured –
The European Union has also initiated a ban on the sale of new petrol, diesel or hybrid cars by 2035, while China wants at least half of new vehicles by that date to be electric, hybrid or hydrogen.
Automakers are being warned that “it’s up to them to manage to prepare their inventories,” notes Jessica Caldwell, of specialist firm Edmunds.
“It was still said recently that the biggest obstacles to the adoption of electric vehicles would be the acceptance of motorists and the price”, emphasizes the specialist.
But driven by consumers increasingly sensitive to the effects of climate change, the demand is there.
In the US, for example, General Motors claims to have more than 150,000 pre-orders for the electric version of its Silverado pickup, which will not be available until 2023. It takes several months for a Tesla, the flagship brand in the sector …
“The question now seems more about whether they can get the necessary materials,” notes Ms. Caldwell.
– “Drastic” shifts –
“Governments can decide as much as they want about subsidies or new rules for electric cars, we are currently facing a shortage of palladium, nickel, lithium”, says Karl Brauer from the specialist site iseecars.
Admittedly, the problem is largely linked to the conflict between Russia and Ukraine, but “no one would have foreseen the escalation in prices or the difficulty of obtaining these materials a year ago”, he recalls. Which highlights that the situation “can change drastically at any time”.
Manufacturers are struggling to limit the dangers.
They build their own battery factories, create joint ventures with specialized manufacturers or enter into partnerships with mining companies.
German groups Volkswagen and Mercedes-Benz even signed deals directly with the Canadian government on Monday to consolidate their supply of rare metals.
But the market remains, as for oil, global, Mr Brauer reminds: as long as supply is limited, “there will always be someone to pay a little more”.
In this regard, other aspects of the transition to electric such as converting production lines are ultimately quite easy “because they can control it”, he says.
– Support under conditions –
Local regulations can also complicate the task, as in the United States, where a recent law requires a subsidy of $7,500 for the purchase of an electric car for certain elements, such as final assembly in North America.
The Automotive Innovation Alliance, an industry lobby in the US, has calculated that around 70% of the 72 electric, plug-in hybrid or hydrogen models currently on the market could not, as they are, claim this subsidy.
For Garrett Nelson, analyst for CFRA, this new law will clearly favor Tesla, GM and Ford in the US to the detriment of European and Asian manufacturers.
Following California’s announcement, the Alliance for Automotive Innovation also assessed in a press release that meeting the state’s goals would be “extremely complicated” due to “external factors”: inflation, electric or hydrogen charging stations, supply chains, labor, availability and the cost of critical materials and the continued shortage of semiconductors.
“These are complex, interconnected and global issues that are far beyond the control (of the California authorities) or the auto industry,” the Alliance says.