European car manufacturers are facing challenges in securing key battery metals essential for achieving their electric vehicle (EV) goals by 2030, a recent Transport & Environment (T&E) report revealed.
Based on publicly disclosed contracts, the analysis indicates that European carmakers have secured only 16 percent of the essential lithium, cobalt, and nickel needed for their electric vehicles until 2030.
Tesla leads, European carmakers trail behind
Tesla emerges as the front-runner in the battery supply chain race, outperforming other manufacturers in raw material and cell production strategies. However, the report emphasizes that Tesla, along with BYD, trails behind European carmakers in terms of responsible sourcing of minerals.
Julia Poliscanova, Senior Director for Vehicles and Emobility Supply Chains at T&E, pointed out the significant gap, stating, "There is a clear disconnect between carmakers’ electric vehicle goals and their critical mineral strategies."
Key findings on car manufacturers
The T&E report identifies Tesla and BYD as the only companies doing enough to guarantee cobalt, lithium, and nickel supplies to meet their 2030 sales targets. In ranking second overall, Volkswagen performs well in raw materials and cell production but falls short on responsible practices. Stellantis, another European manufacturer, also shows promise in securing battery metals.
Six companies, namely Tesla, BYD, Volkswagen, Ford, Renault, and Stellantis, have long-term contracts for each of the three key metals or plan to alter battery chemistries to reduce dependence on these metals.
On the other hand, Mercedes has only one publicly disclosed contract, and BMW, opposing the EU’s phase-out of combustion engines, lacks sufficient disclosure regarding its nickel, cobalt, or cathode materials plans.
Responsible practices and supply chain resilience
German manufacturers BMW, Mercedes-Benz, and Volkswagen lead in responsible supply chain practices. The analysis considers traceability of raw materials, low-carbon processes, and human and indigenous rights protections as critical metrics for consumers and investors.
In a separate ranking on resilience to supply chain shocks, Volkswagen, Stellantis, and Mercedes-Benz perform well. These companies and Renault are actively supporting EU startups in battery components and minerals processing, which is crucial for scaling up green technology in Europe and ensuring supply security.
Warning to carmakers
According to the report's findings, Julia Poliscanova warned CEOs and investors, stating, "Carmakers’ supply chain strategies will make or break the EV transition in Europe and render some companies obsolete."
Emphasizing the importance of supporting local refining and battery component factories, Poliscanova added, "Europeans have a clear lead on cleaning up the supply chains, which is critical for consumer acceptance and unlocking ESG finance."
Industry reaction
The report aligns with concerns raised in recent news articles, where European carmakers are depicted as "miles behind" in the race for raw materials needed in electric car batteries.
As the automotive industry grapples with the challenges outlined in the report, there is an urgent call for proactive measures to secure the critical minerals necessary for the electric vehicle revolution and ensure a sustainable and responsible supply chain.
Originally published on Interesting Engineering : Original article