Auto Industry Peers into an Electric Future and Sees Bumps Ahead

February 12, 2021

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by Steven Mufson (Washington Post) ... (T)he question is not, ‘Can we sell to the wealthy?’ It is, ‘Can we get the everyday household in mainstream America to buy an EV?’ and we’re still a long way away from that.”

Meanwhile, he (David R. Keith, a Chevy Bolt owner and assistant professor at the Sloan School of Management at the Massachusetts Institute of Technology) added, the cars on the road today will be on the road for the next 15 to 20 years. “There is so much inertia baked into those 250 million light-duty vehicles,” he said.

The biggest companies, like GM, have not gotten off to a strong start.

On at least three occasions, the batteries powering GM’s Chevy Bolt caught on fire under the rear passenger seat, according to National Highway Traffic Safety Administration reports. In one instance, a car recharging in a driveway in Belmont, Mass., caught fire, billowing smoke, forcing the evacuation of neighbors and leaving behind noxious fumes through the house; it took firefighters three hours to extinguish the blaze. In Vienna, Va., it took firefighters an hour to douse a burning Bolt outside a townhouse — and they had to be called two more times when the car started smoking again.

In November, GM issued a recall for 50,932 Chevy Bolts — more than 60 percent of all Chevy Bolts on the road. The company urged its customers to park their cars outdoors a safe distance from their houses, an inconvenience for EV owners who rely on recharging sockets inside their garages. And GM adjusted the Bolt batteries so that they couldn’t recharge more than 90 percent of capacity.

“It’s really a city car,” said MIT’s Keith.

GM’s early struggles are cultural as much as they are technological.

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In November, GM launched a hiring blitz for 3,000 engineering, design and information technology specialists. “This will clearly show that we’re committed to further developing the software we need to lead in EVs, enhance the customer experience and become a software expertise-driven workforce,” GM President Mark Reuss said in a news release.

But on the online job site Glassdoor, many GM workers in software were disappointed. One current GM employee said there were “good benefits” and a “good work/life balance,” but “too much time spent on meetings and political games.” The advice to management? “It is hopeless. IT management needs to be completely replaced. IT bureaucracy is an obstacle for innovation.”

A former employee said the pros of working there included “working with the latest on Car Tech.” The cons? “Big company, slow pace of changes.”

Glassdoor does not post the names or contact information of people who correspond on its site.

VW has also struggled with software glitches, which forced the German carmaker to twice postpone sales of its new ID.3, which resembles the Golf.

The big carmakers have to compete for talented engineers, not only with Tesla but with other new entrants into the car market. One 11-year-old EV startup, Rivian, last year swiped a rising star named Alex Archer from GM’s design engineering department. Archer, a 2015 Stanford University graduate, had already invented a sliding console in 2020 models of GM’s small trucks and SUVs.

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Unions are worried that the change to electric vehicles might undermine their membership. EV powertrains are mechanically simpler than those in internal combustion engines, the United Auto Workers said in a report. According to analysts at UBS, the Chevy Bolt’s e-motor has three moving parts, while a VW Golf’s internal combustion engine has 113.

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“This simplicity could reduce the amount of labor, and thus jobs, associated with vehicle production,” the UAW report said.

But while electric vehicles lack transmissions, exhaust systems and fuel systems, they could create employment in batteries, electric motors, electronics, thermal systems, braking systems, and semiconductors.

The problem, the union warned, is that many of those new components “could shift business and employment to non-auto companies that lack a large U.S. manufacturing base. This could undermine auto job quality by shifting work to employers with a poor history of labor relations or companies that are more likely to import components.”

The big carmakers also face a variety of battery challenges, posing tough questions for President Biden on trade, subsidies and investment. In her confirmation hearing, energy secretary nominee Jennifer Granholm noted that “of the 142 lithium ion battery mega-factories that are under construction, 107 are in China. Nine are in the U.S. We can’t sustain this. We have got to lean in much more quickly.”

That’s going to mean subsidizing domestic battery makers or arm-twisting or incentivizing foreign battery makers to set up factories in the United States. The UAW has called for large-scale retraining programs for displaced workers.

An explosion in the use of electric batteries could also spark conflict over environmental choices, pitting conservation against industrial needs.

James D. Calaway, chairman of an Australian firm called Ioneer, is hoping to get the permits to start a lithium mine in Nevada that would quadruple U.S. production of the mineral. It would be located on the parched outcropping Rhyolite Ridge in the third-most-sparsely populated county in the United States, Calaway says, between Reno and Las Vegas. Phase one would produce about 22,000 tons a year of battery-grade lithium for the next 25 years — enough to produce about 400,000 EVs a year. The U.S. market usually exceeds 17 million cars a year, though with the ailing economy, sales fell about 15 percent short of that last year.

But getting that lithium would mean destroying much of the habitat of Tiehm’s buckwheat, a plant, says the Center for Biological Diversity, which wants to stop the mine.

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The nascent electric vehicle market could soon be riled further by a spat between two South Korean battery makers arguing over intellectual property. One company, SK Group, is sinking about $2.6 billion into a massive battery plant in a rural town in Georgia, the largest foreign investment in the state’s history. But LG Chem says SK stole its intellectual property and has asked the International Trade Commission to block SK from starting up the plant. That would hurt SK’s two biggest customers, Ford, which wants to put the batteries in an electric version of the popular F-150 pickup, and VW, which wants to use them in a car plant in Chattanooga, Tenn.

“If somehow this plant were to be rendered unusable because of this ITC decision, it isn’t like they go out and put Duracell batteries in this thing. You need to design customized batteries,” said Daniel Spiegel, vice chair of the public policy practice at the law firm Covington & Burling, which is representing SK.

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Many dealers are simply closing shop. Given a choice, 17 percent of 880 Cadillac dealers took a buyout from GM rather than invest in the repair equipment and charging stations needed to sell and service electric versions of the luxury car, the Wall Street Journal reported. READ MORE

How A Trade Dispute Between 2 Korean Firms Could Jam Biden’s Electric Car Plans — Trade lawyers call it “the nuclear option.” South Korea’s prime minister called it “embarrassing.” The question now is whether Biden will call it unacceptable. (Huffington Post)

Federal trade ruling hits EV supply chain (E&E News)

AUTOS GET GRACE PERIOD IN BATTERY IMPORT BAN: (Politico’s Morning Energy)

NEC Panel to Discuss Ethanol’s Role in Future Autos (Energy.AgWired.com; includes AUDIO)

Rules of origin could threaten UK EV production (Energy Market Price)

Elon Musk Should Come Clean: Tesla’s Emissions Are Rising (Bloomberg/Business Standard)

Why 2021 is shaping up to be a pivotal year for electric vehicles: Automakers are redefining their images -- and products. (ABC News)

How Green Are Electric Vehicles? (New York Times)

EV rollout will require huge investments in strained U.S. power grids (Reuters)

AUTOS INDUSTRY: Electric Vehicles Are the U.S. Auto Industry’s Future—if Dealers Can Figure Out How to Sell Them -- Car dealers say they are struggling to square the industry’s enthusiasm with shoppers’ reality (Wall Street Journal)

GM shakes up lithium industry with California geothermal project (Reuters)

GM's $2 billion Chevy Bolt fire recall casts shadow over electric vehicle market -- Industry officials worry about the potential impact any fires could have when the industry is investing billions in the shift to battery power. (NBC News)

GM heralded this plant as a model for its electric car future. Then its batteries started exploding.-- The company had to recall 141,000 Chevrolet Bolt electric vehicles, a microcosm of the challenge GM faces as it aims to shift its production to all-electric (Washington Post)

EV supply chains have a human rights problem. Can tech fix it? (Washington Post)

Why 6 flooded EVs burst into flames after Hurricane Ian (E&E News)

BESS Failure Event Database (EPRI)

At least 11 electric vehicles caught fire amid Ian flood waters. What happened? (USA Today)

Excerpt from Politico’s Morning Energy: AUTOS GET GRACE PERIOD IN BATTERY IMPORT BAN: Ford is breathing a sigh of relief today after the U.S. International Trade Commission last night gave it a reprieve from a decision to block shipments to the battery company meant to supply the electric F-150, Pro’s Gavin Bade reports. The ITC ruled Wednesday that SK Innovation had stolen trade secrets from fellow South Korean battery manufacturer LG Chem. The decision would block imports of any battery components to SK Innovation for 10 years, also affecting a line of Volkswagen vehicles expecting to use the batteries. But the ITC included a grace period for the automakers “to permit these third parties to transition to new domestic suppliers for these programs.” READ MORE

Excerpt from Energy Market Price: Carmakers anticipating difficulty with proving the origins of their materials are putting pressure on metals and mining companies, leading to a shift in focus towards environmental, social and governance (ESG) across the supply chain.

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While steel may be readily available, sourcing other materials will be more challenging. Projects such as Cornish Lithium are hoping to plug the gap for one metal, but the supply chains for nickel and cobalt remain a challenge. The UK risks being left behind amidst global competition for these metals, which are both predicted to be in deficit by the middle of this decade.

The strength of demand is reflected in price movements since the start of 2021, exacerbated in some areas by concurrent supply concerns. Argus assessed cobalt hydroxide prices at $16.50-18.50/lb cif China on 9 February, continuing their steep rise since the beginning of the year. Domestic nickel sulphate prices were assessed at Yn33,000-34,000t ($5,110-5,266/t) ex-works China on 12 February, up by Yn3,000/t since the beginning of the year, while cif China nickel sulphate has risen by $100/t to $3,200-3,600/t. READ MORE

Excerpt from New York Times: But a lot depends on how much coal is being burned to charge up those plug-in vehicles. And electric grids still need to get much, much cleaner before electric vehicles are truly emissions free.

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On the other hand, if the Bolt is charged up on a coal-heavy grid, such as those currently found in the Midwest, it can actually be a bit worse for the climate than a modern hybrid car like the Toyota Prius, which runs on gasoline but uses a battery to bolster its mileage. (The coal-powered Bolt would still beat the Camry and the F-150, however.)

“Coal tends to be the critical factor,” said Jeremy Michalek, a professor of engineering at Carnegie Mellon University. “If you’ve got electric cars in Pittsburgh that are being plugged in at night and leading nearby coal plants to burn more coal to charge them, then the climate benefits won’t be as great, and you can even get more air pollution.”

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Raw materials can be problematic
Like many other batteries, the lithium-ion cells that power most electric vehicles rely on raw materials — like cobalt, lithium and rare earth elements — that have been linked to grave environmental and human rights concerns. Cobalt has been especially problematic.

Mining cobalt produces hazardous tailings and slags that can leach into the environment, and studies have found high exposure in nearby communities, especially among children, to cobalt and other metals. Extracting the metals from their ores also requires a process called smelting, which can emit sulfur oxide and other harmful air pollution.

And as much as 70 percent of the world’s cobalt supply is mined in the Democratic Republic of Congo, a substantial proportion in unregulated “artisanal” mines where workers — including many children — dig the metal from the earth using only hand tools at great risk to their health and safety, human rights groups warn.

The world’s lithium is either mined in Australia or from salt flats in the Andean regions of Argentina, Bolivia and Chile, operations that use large amounts of groundwater to pump out the brines, drawing down the water available to Indigenous farmers and herders.

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Deposits of rare earths, concentrated in China, often contain radioactive substances that can emit radioactive water and dust.

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But while 99 percent of lead-acid batteries are recycled in the United States, estimated recycling rates for lithium-ion batteries are about 5 percent. READ MORE

Excerpt from NBC News: General Motors has expanded the recall of its Chevrolet Bolt electric car because of concerns about potential battery fires, adding 73,000 more vehicles, for a total of about 142,000 cars — every single one that Chevy has sold so far.

The combined cost of the recall will reach nearly $2 billion as the auto industry plans to roll out dozens of new electric models over the next 24 months to meet President Joe Biden’s goal that electric vehicles reach 50 percent of total U.S. sales by 2030.

GM's EV lineup includes the launch of its electric Hummer pickup and an all-electric Cadillac Lyriq, which will use a different battery technology from the Bolt’s. The problem appears to involve manufacturing defects that can cause the batteries to short-circuit, even when parked.

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It’s not the only manufacturer that has had to deal with EV fire problems. Hyundai has recalled about 90,000 of its Kona EV models because of what it said this year was the “increase[d] risk of a fire while parked, charging and/or driving.”

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Other manufacturers, including the EV giant Tesla, have found themselves in the news because of battery fires. In December, a home in suburban San Diego was destroyed when a Tesla Model S caught fire as it was charging in the garage. Investigators blamed a faulty thermal management system designed to keep the battery pack cool. READ MORE

Excerpt from Washington Post: The difficulty electric carmakers face building supply chains free of human rights and environmental violations came into focus earlier this year, when U.S. investigators completed their probe of a massive mining tragedy in Brazil.

Before 270 people were killed in a collapse of a dam holding iron ore mining waste — most of them buried alive in a deluge of toxic sludge — the metals company Vale provided audits and certifications to assure clients and investors of its commitment to safety and environmental stewardship. The lawsuit the Securities and Exchange Commission filed in April charges that the paper record was fraudulent, with Vale manipulating audit reports and suppressing crucial safety findings ahead of the 2019 catastrophe.

The SEC’s federal lawsuit was a wake-up call for an auto industry straining to source massive amounts of new metals in a manner consistent with the green branding of electric vehicles. READ MORE