Automakers spend billions of dollars building battery cells for EVs in the U.S.

Ford’s design and release engineer Dane Hardware (right) and Ford’s battery verification engineer Mary Fredrick use a digital multimeter to measure battery voltage at Ford’s Battery Benchmark and Test Lab in Allen Park, Michigan. To measure.


As a supply chain Continue to suffer Automakers around the world are spending billions of dollars moving battery cell production to their home countries to meet the rapidly growing demand for electric vehicles over the next decade.

Automakers from Detroit to Japan plan to simplify their supply chains, reduce costs, facilitate logistics and avoid massive disruptions. The global shortage of semiconductor chips has highlighted the industry’s reliance on foreign manufacturers of components.

Companies based in the United States or doing large-scale operations in the United States also Soothes the Biden administration, This requires companies to bring their supply chain to the United States

apart from TeslaUntil recently, automakers, the country’s leader in electric vehicle sales, have hesitated to invest in the production of battery cells. Instead, they have relied primarily on Asian-based suppliers to make such parts.Many companies, including Tesla, are Panasonic and LG Chem Manufacture parts.

Arun Kumar, Managing Director of the Automotive and Industrial Sector, said: At AlixPartners. “In our view, this will accelerate even further, mainly because localization is an important factor if you are really thinking about making large batteries.”

Electric vehicles are powered by battery packs with modules that hold cells. Packs are by far the most important and costly part of an EV. It can also weigh hundreds to thousands of pounds, making it more difficult to transport than small items such as small semiconductor chips.

$ 330 billion in EV

Based on the announced five-year rolling average of investments, AlixPartners predicts that companies will invest $ 330 billion over the next five years in their entire EV supply chain. About one-third is expected to be primarily for batteries in China and Europe, but the United States is trying to catch up.

According to Kumar, this forecast is up 65% from the 2018 forecast of $ 200 billion.

“Electrification is happening faster than many thought it was a few years ago,” he said. “OEM’s plans are starting to change dramatically.”

The investment is in preparation for new demand. Plug-in vehicles, including all-electric and plug-in hybrids, are projected to account for only 4% of the US market this year, but are expected to be rapidly adopted worldwide over the next decade, including the US. ..

AlixPartners predicts that by 2030, about 28% of the world’s cars will be EVs. In the United States, LMC Automotive predicts that by then, about one-third of new car sales in the United States will be EVs.

Panasonic, led by Tesla, is the country’s largest producer of battery cells, according to a report by the Argonne National Laboratory for the US Department of Energy’s Energy Efficiency and Renewable Energy Department. According to the report, Japanese companies supplied battery cells to 70.9% of vehicles sold in the United States in 2020.

However, other companies such as LG Chem and SK Innovation are doing their own thing in partnership with automakers.

“Become more and more vertical”

Automaker Stellantis, Previously Fiat Chrysler and LG Chem’s Energy Solutions Spin-off on Monday announced an agreement to establish a joint venture Manufacture battery cells And modules for North America. The two companies did not provide financial details, but the previously announced investment will add to the billions of dollars.

Toyota Motor It also said it plans to invest about $ 3.4 billion in the development and production of automotive batteries in the United States by 2030, including a new $ 1.3 billion battery plant.

“The tens of billions of dollars most major automakers are investing in the transition to electricity over the next five to ten years will need the last thing they want to do, whether or not they need it. It’s stuck without the main components. Battery or chip. ” “They are increasing to go vertically in some cases, or diversify their supply in other cases.”

Monday’s announcement will come later Ford motor Last month it said it would invest Over $ 11.4 billion At a new facility in the United States that will create approximately 11,000 jobs to produce electric vehicles and batteries, including a twin lithium-ion battery plant in central Kentucky through a joint venture with SK Innovation.

James Lewis, Senior Vice President of the Center for Strategic and International Studies, which works with automakers, said: “Especially car companies don’t want to be caught again as they were caught on the tip.”

U.S. plants

Following Tesla’s lead General Motors Detroit carmakers may produce their own battery cells and packs in the United States. We plan to start cell production through a joint venture with LG Energy Solutions. At the Ohio factory next year. The plant is expected to be the first of at least four in the next few years, including another plant announced in Tennessee.

According to the Automotive Research Center, there are 27 battery facilities, including cells and packs, announced or currently in operation in the United States.

Apart from the announcement of the battery factory, iPhone makers FoxconnPreparing to produce EVs said on Monday that it plans to produce electric vehicles and buses for auto brands in China, North America, Europe and other markets.

A Taiwanese company announced last month that it would buy an Ohio plant from a puzzled EV startup. Lordstown Motors Company vehicle production and EV startup Fisker..

“This is the wave of the future,” Lewis said. “This is the modernization of our automobile industry.”

Automakers spend billions of dollars building battery cells for EVs in the U.S.

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