The Drive Toward Total Electric Vehicles

There is something unsettling about sitting in the passenger seat while riding down a dark, unfamiliar road, concerned for whatever may lie ahead. You could say the U.S. auto industry is in a similar situation.

U.S. policymakers continue driving the industry toward a carbon-free future, with the latest change coming a few weeks ago with the EPA’s new carbon emission limits. The standards require as many as two-thirds of new vehicles sold in the U.S. to be electric by 2032. This represents a 10-fold increase over today’s electric vehicle (EV) sales.

John Bozzella, chief executive of the Alliance for Automotive Innovation, a trade group representing automakers, called the mandate “aggressive by any measure,” noting that the new regulations exceed the Biden administration’s 50% EV sales target announced less than two years ago.

And U.S. automakers are just some of the ones feeling the stretch. EV battery makers say they must accelerate expansion efforts already in high gear. Allan Swan, president of Panasonic Energy of North America, said producing enough American-made EV batteries to meet that demand will be a huge undertaking.

In a recent interview, Swan told National Public Radio that his company is nearing completion of the nation’s first EV battery gigafactory, which is gearing up for four or five times growth by 2030.

“I know many of the other players in the market are going to be doing something similar. So, it’s going to be tight, but we’re going to do our best to achieve it,” Swan said.

In a report last fall, London-based Benchmark Minerals concluded: “The need for lithium-ion batteries is expected to grow six times by 2032.” GlobalData estimates there are more than 26 lithium mines in operation globally. Benchmark estimates the world must add 74 new mines over the next decade to keep pace. Currently, RK Equity is tracking 60 emerging projects. Even if they all come online and meet expectations, more is needed.

With government regulators in the driver’s seat, pushing for tighter carbon emissions, an affordable automobile future is paved with uncertainty, and everyone concerned is along for the ride.