The cost of EV battery supply is increasing.
Carmakers are investing in in-house battery supply due to prices and a push to use local materials.
This move is similar to whatTesla has been doing.
With electric car battery costs on the rise, auto companies are doing everything they can to make their EV offerings more affordable for the average person.
They may need to forget a lot of what they've learned about supply chains in order to make that happen.
Today's EV troubles have prompted automakers to explore different types of batteries to reduce their dependence on in-demand materials. They've been trying to get more batteries back into the supply chain.
There are challenges in terms of timing and expense for these solutions. Car companies are racing to find an alternative to the US battery market.
Investments in battery material source, battery production, and more are needed to reduce global supply disruptions.
Peter Maithel, auto industry principal analyst at Infor, said that almost all the major companies are investing in that for that very reason.
Car companies have expanded their supply chains in the past, relying on many suppliers for each component of a car Some of their key parts may come from the US.
Potential bottlenecks have been reduced by the breadth of the supply chain. The Pandemic and other disruptions show how vulnerable auto companies can be. A manufacturing line at an auto parts plant could be down for days or weeks at a time.
Concerns and more to the forefront of automaker to-do lists are brought about by the dawn of electric vehicles. The US has relied on foreign sources for many things. China has had a head start in terms of sitting on the raw materials necessary to power EV and controlling production of much of the world's battery cells, packs, and more.
Companies have been encouraged to bring manufacturing closer to home because of unforeseen disruptions like COVID-19. This summer's climate law has led to a push to get away from the world wide supply chain model.
"We've just seen an unprecedented amount of announcements, joint development agreements, early supply contracts from the automakers with battery materials providers, with battery manufacturers," said Matt Sculnick.
It's called vertical integration, and it's something that has been a part of the company for a long time.
"Tesla is the groundbreaker here, going directly to the source, going directly to the mines and negotiating supply contracts with the mines," said Tony Lynch.
While GM and Ford scramble to get in on US mining deals and manufacturing,Tesla has an advantage due to having visibility into production.
It's complicated and takes a lot of time, but may be the best way to get closer to lowering the cost of new EV. According to the Kelley Blue Book, those sat at $65,041 in November.
A combination of more supply and more EV volumes will cause that to go down.
Business Insider has an article on it.
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