There is no shortage of demand in the electric vehicle industry.

As (credit) cardholders, we're used to getting what we want, when we want it: Amazon delivers at breakneck speed. A ranch's worth of beef from Costco. Etsy oddities and Bring a Trailer's night-whispered fantasies This is the first of a two-part explanation of the electric vehicle battery supply chain. This is how the automobile industry painted itself into a corner. What it's doing to get back out is up next.

With 200,000 reservation holders tapping their toes in line, fantasising about dusting gasoline trucks, we can use the Ford F-150 Lightning as an example of how badly many Americans desired an electric pickup. So many that even Ford was taken aback, and the company is racing to double Detroit production to 150,000 units per year by next year. Darren Palmer, Ford's vice president of electric vehicle programmes, told me that the company plans to roughly triple Mustang Mach-E production to 150,000 units per year. That's what happens when EVs progress from short-range, compromised econoboxes to fully-realized marvels that render gasoline versions nearly obsolete in terms of everything from performance, pollution, and NVH to fuel and maintenance costs.

Demand for the Lightning

The Lightning's popularity has surprised everyone, according to Palmer, and Ford has stopped accepting new reservations for the time being. We don't have the mines or materials to supply these things even if we had a magic wand. But there's a catch: A lithium-ion battery shortage that threatens to lengthen EV lines, frustrate would-be buyers, and delay the transition from fossil-fueled transportation to cleaner, radically more efficient modes. It's a chasm between automakers' optimistic EV sales projections and supply-chain reality; a Red Sea chasm worthy of Charlton Heston, with no sudden miracles in sight. And everyone from Elon Musk to Rivian's R.J. Scaringe is sounding the alarm or predicting that things will get worse before they get better.

We simply do not have the manufacturing capacity to meet demand, says Venkat Srinivasan, director of Argonne National Laboratory's Collaborative Center for Energy Storage Science. And even if we had a magic wand, we lack the mines and materials to supply these things, so there is a long-term materials challenge. On the surface, it might appear that automakers have this covered: The Department of Energy estimates that at least 13 new gigafactories will be built on our soil by 2025, with approximately 300 gigawatt-hours (gWh) of new capacity, nearly all in the union-stricken American South. That would be five times today's 60 gWh capacity, with EVs now accounting for about 4% of the new-car market.

Department of Energy counts

Ford alone expects to add 60 new gigawatt-hours in North America by 2025, equaling today's total US output, and 140 by 2030, including joint-ops facilities in Tennessee and Kentucky with South Korea's SK Innovation (SKI). GM is preparing its first Ultium-branded battery plant in Ohio with South Korea's LG Energy Solution, with additional plants planned in Tennessee and two other locations. Stellantis, Volkswagen, and Toyota are laying the groundwork for their own battery recharging operations. That 300 gWh estimate excludes Tesla's factory in Austin, from which Musk hopes to accelerate the deployment of Telsa's long-awaited 4680 cylindrical cell to power its next-generation cars. Tesla, which was far ahead of the curve in manufacturing its own batteries, claims to have enough to support current production, at least until the tardy Cybertruck requires more capacity from Panasonic or other partners.

The White House announced on May 2 that it would contribute $3.1 billion to companies building new battery factories or retrofitting existing ones (plus $60 million for battery recycling), as part of the Bipartisan Infrastructure Act passed last year. By 2030, the Biden administration hopes that half of all new cars sold will be electric vehicles. Several automakers are also chiming in with their own lofty, if not unrealistic, targets for shifting from internal combustion to electric power. This is due to the fact that experts do not see the math adding up. Especially since, as experts like Rivian's Scaringe warn, a battery supply chain in the United States would have to start from scratch.

Rivian’s Scaringe warn

According to Srinivasan, converting all new cars in America — 17 million in a good sales year — to electric drive would necessitate more than 1,500 gWh of batteries per year. That assumes a 90 kWh pack in each vehicle. (The Lightning and Rivian each have 130 kWh in their long-range packs, while a Hummer has 200 kWh, which is enough to power three smaller cars.) To get there, America would need to increase capacity by a factor of 25. Using the administration's 50% target for 2030 would necessitate 750 GhW, which would be more than double the country's total projected capacity in 2025 — and that's assuming every last cell goes into EVs. Grid battery storage, which will compete for capacity with EVs, may require 500 gWh or more of its own. Better get to work.

With new factories in Austin and Berlin, Tesla is now on track to sell at least 1.2 million electric vehicles globally by 2022. Battery, assembly, and chip scarcity are already putting a strain on business and causing pain on showroom floors, including arm-twisting markups from some franchised dealers. (Is that predatory pricing or just plain supply and demand? You make the call.) Even if Ford is able to ramp up production in Detroit on time, people near the back of the existing Lightning line will almost certainly have to wait until 2024 to show off a truck in their driveway. If you make them wait too long, some of them will inevitably go elsewhere.

Until the entire EV ecosystem can expand, automakers — including European and Asian behemoths with their own massive electric ambitions — will have to compete for customers with one hand tied behind their back. Hyundai Motor is unable to produce its standout tag-team of the high-design Hyundai Ioniq 5, Kia EV6, and now Genesis GV60 quickly enough. The Ioniq 5 is Hyundai's first car to be sold in Europe rather than its home country, in order to meet Euro regulations and hot demand. As a result, US prospects are either third in line or completely barred: The Ioniq 5 is only available in 19 states that follow California emissions regulations. Ford has followed suit, sending the majority of Mexican-made Mach-Es to Europe rather than America, even as it ramps up Mach-E production in China.

Ioniq 5 production

Battery experts admit that the current shortages may have been unavoidable. Customers didn't have cars because automakers didn't have them, or vice versa, depending on your point of view. Suppliers had no interest in developing technology, tooling, and components for a worthless trickle of business, including insincere runs of compliance cars, in the absence of customers. Until Tesla came along, every would-be EV maker was stymied by the chicken-egg conundrum. That includes Nissan (which had been producing lithium-ion EVs since the 1990s) when it launched the first Leaf in 2011. Because lithium-ion cells were prohibitively expensive at the time, Nissan was forced to develop its own joint-operations, in-house spinel battery, which proved notoriously trouble-prone. The Leaf's already limited range quickly dwindled, particularly in easy-bake Southwestern climates.

Japanese Nissan Factory In Oppama

It's easy to laugh now at the quaint, trembling Leaf, with its meagre 24-kWh battery and 77-mile range. Yet, as I've grown tired of saying, no non-Tesla EV has yet to break the Leaf's American sales record of 30,100 in 2014. When compared to the Nissan of a decade ago, the Mach-E is a virtual Starship Enterprise in terms of power, endurance, and technology, and it may sneak past it here in 2022. This is clearly due to limited production rather than consumer desire.

If Ford meets its targets, the Lightning should set an American sales record for any EV that isn't a Tesla. According to Palmer, Ford is well aware of the stakes, including the need to get the trucks into the hands of customers and convert them, possibly permanently. Three of every four Lightning reservation holders has never owned a Ford vehicle. Four out of every five people are purchasing their first electric vehicle.

We know that everyone will want these batteries because of the advancements in electric vehicles, Palmer says. We're rushing, and entire departments are completely focused on how we'll get supply at the rates we've shown. As automakers compete for long-term contracts and a share of limited battery supplies, Palmer notes that these are not insignificant challenges. He claims that large scale and long-standing supplier relationships can separate the big players from the start-ups.

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