CEO Of Rivian Anticipates EV Battery Shortage
RJ Scaringe, the CEO of Rivian, has indicated that there might be an EV battery shortage on the horizon. The potential shortage of batteries is salt in the metaphorical wound initially created by the lack of semiconductors necessary to make modern vehicles. If Scaringe’s prediction is accurate, the shortage of EV batteries has the potential to be even worse than the shortage of semiconductors.
The shortage of computer chips has made it increasingly difficult to find reasonably priced consumer electronics and automobiles. If there is an EV battery shortage, finding an affordable EV will prove even more challenging in the months ahead.
The sad truth is EV-makers are finding it difficult to obtain the materials necessary to make batteries for the electric vehicles. As noted by Scaringe, the shortage of EV batteries has the potential to become a major problem for the industry in the years ahead.
Details Of Scaringe’s Comments
Scaringe made the comments while providing a press tour of a Rivian factory in Normal, Illinois earlier this month. The executive noted that building the batteries necessary to keep pace with EV demand will be the industry’s largest hurdle moving forward. Scaringe predicts shortages in every component of the process necessary to make EV batteries.
Everything from raw materials such as nickel, lithium and cobalt are likely to be in short supply. Add in the fact that battery cells and battery processing materials will also be difficult to obtain and the picture for the EV industry looks even bleaker.
Scaringe stated that the global battery cell production as a whole is less than 10% of what the world will need across the next decade. In other words, about 95% of the battery supply chain is non-existent. It is possible that EV-makers will follow Rivian’s lead by hiking vehicle prices in response to the battery shortages. Furthermore, more EV-makers are also likely to reduce production, following in the footsteps of Rivian. The company decreased its EV production outlook by 50% earlier this year as a result of ongoing supply chain problems.
Is There A Solution To The EV Battery Crisis?
Scaringe is not one to highlight a problem without posing a solution. The executive stated he is weighing the pros and cons of implementing a battery production center within Rivian’s manufacturing facility.
Scaringe also noted that he is expanding the company’s focus to several battery suppliers so it is not completely dependent on a single supplier. However, the bottom line is the lingering battery supply issues are likely to cause the prices of EVs to increase in the months and years ahead.
Perhaps the most concerning aspect of Scaringe’s comments is the fact that he compared the chip shortage to an appetizer while the battery shortage is the entrée, meaning the chip supply chain woes will pale in comparison to the looming battery shortage. The question is whether Rivian and other EV-makers will be able to construct their own battery giga factories.
Will EV-Makers Overbuy Batteries?
Scaringe noted that the chip shortage prompted industry power players to overbuy and stockpile chips. The same phenomenon might also occur with EV batteries at an exponentially higher level. The battery shortage is especially challenging as the demand for EVs is rapidly increasing much faster than industry experts anticipated.
Scaringe even went as far as stating gas-powered automobiles sales will come to a halt within the next half-decade as EVs take center stage. The question is whether EV-makers will have the raw materials necessary to meet demand and hasten the transition away from pollutive vehicles that operate on fossil fuels to those that operate on batteries powered by electricity.