Change to EVs more challenging than Japanese wave of the early 1980s
That was the prediction of Brett Smith, a 35-year veteran analyzing the automotive industry, during a presentation last week at the “Electric Vehicle Battery Innovations Conference” in Cleveland.
“I’ve been called a pessimist by EV enthusiasts,” Brett Smith told attendees at last week’s “Electric Vehicle (EV) Battery Innovations Conference” at the PIE Innovation Center in Cleveland, TN.
Hosted by the Smart Factory Institute of Tennessee, the nearly all-day event drew more than 100 in-person pre-registrants and another handful of virtual attendees to hear the keynote address by the recently retired Research Fellow with the Ann Arbor, MI-based Center for Automotive Research (CAR). Smith is now a private consultant, drawing on his 35 years with CAR and the Office for the Study of Automotive Transportation at the University of Michigan.
“This change is going to be more challenging than the Japanese wave” that came starting in the early 1980s with the arrival of Nissan in Smyrna, TN,” Smith noted. As one Asian manufacturer after another decided to build plants in the Southeast and were joined by the German brands – BMW and Mercedes – Automotive News named the wave the “New American Automotive Manufacturers.”
“It’s going to be gut-wrenching from an industry side and as exciting as heck from a researcher’s perspective,” Smith said.
In this recent teknovation.biz article, he talked about the four quadrants that are driving the industry and reiterated them at the beginning of his presentation. They are sustainability, automated and connected vehicles, transformation, and electric.
“All four of these are remarkably expensive,” Smith (pictured right) noted. “A new car will typically have $10,000 worth of driver-assisted technologies, so it’s not just a connected car but a connected industry.”
On the first point, Smith said that original equipment manufacturers (OEMs) are pushing suppliers on the environmental, social, and corporate governance areas, but with a real focus on the first one. On the automation front, he said it ranges from the lowest level which is driver assistance to the highest – full driving automation.
“Suppliers are mostly focusing on levels 2 (partial driving automation) and 3 (conditional driving automation,” Smith explained, adding, “Autonomous vehicle enthusiasm seems to be waning.”
How big of a bet are OEMs and suppliers making? The answer is a lot. Between 2020 and 2022, the total commitment for EVs and batteries was $74.4 billion, including $50 billion in 2022 alone.
“To meet EPA (U.S. Environmental Protection Agency) standards by 2032, we will need 70 percent of the total vehicles to be EVs,” Smith added.
The program featured presentations by two companies in the Southeast Tennessee region and two panels including one that I moderated.
- Coulometrics LLC is a Chattanooga-based that President and Chief Executive Officer Edward Buiel described as the largest battery assembly and testing facility in the country. “We are really good at making 20 batteries so our customers can do their R&D work,” he told the attendees.
- Piedmont Lithium is developing a world-class integrated lithium business, and one of its locations is in Etowah in McMinn County. Malissa Gordon, Vice President for Government Affairs, said that the start-up “strategically located our lithium hydroxide processing facility in Tennessee and an integrated mining and processing facility in North Carolina. Both of these are located within the ‘Battery Belt’ – where battery and automotive plants are being constructed by prospective customers due to positive business climates with cooperative local and state governments, as well as access to excellent infrastructure with convenient rail, road, and river transportation.” The Tennessee location is expected to be operational in 2026 and will produce 30,000 tons annually of lithium hydroxide, a material that will need to increase its available supply by 40-fold to meet expected demand.
The two panels included:
- “EV Boom in the Southeast” that I moderated and featured; (1) Robert Ferber Jr., Chief Technology Officer of Xos Trucks, a Los Angeles-headquartered company that has a facility in Byrdstown, TN; (2) Savannah Robertson, DriveElectricTN Director for the East Tennessee Clean Fuels program; and (3) Sam Wills, Southeast Regional Director for the Tennessee Department of Economic and Community Development.
- “Building Electric Vehicle Infrastructure,” moderated by Rick Youngblood, President of the Tennessee Automotive Manufacturers Association, featured: (1) Drew Frye, Manager of Commercial Energy for the Tennessee Valley Authority; (2) Andrea Noel, Programs Supervisor for the Tennessee Department of Transportation; and (3) Mark Finley, Senior Energy Analyst with the Tennessee Department of Environment and Conservation.