- RJ Scaringe says the shortage of electric vehicle batteries may soon become a bigger problem than the shortage of chips.
- Alex Partners estimated that a shortage of computer chips caused automakers to lose $210 billion in 2021.
- Elon Musk has repeatedly warned that battery supplies could affect the production of electric cars.
Rivian CEO RJ Scaringe has warned that a shortage of electric car batteries may soon overcome problems the auto industry has faced from a shortage of computer chips.
“Semiconductors are a little appetizer for what we’re about to feel on battery cells for the next two decades,” Scaringi said, according to a report from the Wall Street Journal. Rivian’s CEO made the comment while touring reporters at the company’s plant in Normal, Illinois.
Over the past two years, chip shortages have led companies to cut production and cut electronic features like touch screens and seat heaters. In September, consulting firm AlixPartners estimated that chip shortages would cost automakers more than $210 billion in 2021.
Now, automakers looking to switch to electric vehicles may face severe shortages of electric vehicle batteries, as well as the minerals needed to produce nearly 1,000 pounds of lithium-ion batteries.
“Very simply put, the world’s combined cell production is much less than 10% of what we will need in 10 years,” Scaringe said, according to the journal. “Which means that 90% to 95% of the supply chain does not exist,” he added.
Scaringi told reporters that Rivian’s strategy to secure battery cells is to diversify its suppliers, as well as build up its capacity to make its own battery cells.
The CEO of Rivian isn’t the first to express concern about future EV battery supplies. Tesla CEO Elon Musk has repeatedly warned that battery supply could become a major problem.
earlier this month, Musk said Tesla is considering entering into lithium mining and refining. In 2020, Tesla acquired its own rights to a lithium mine in Nevada after a deal to buy the lithium mining company fell through, according to Fortune.
Over the past year, prices for the metal have more than quadrupled as the pace of lithium extraction lagged behind demand for electric vehicles, according to data from Benchmark Mineral Intelligence. Last month, nickel prices reached their highest level in more than 20 years.
Last year, the Center for Automotive Research (CAR) released a report that found battery cell production won’t be able to meet demand until 2030, causing an estimated shortage of more than 18.7 million electric vehicles between 2022 and 2029.
“Although significant production capacities for lithium-ion cells have been built in the United States, Europe and China, building cell factories takes time, as does the material series for the anodes and cathodes, ranging from lithium, cobalt, nickel, and nickel,” the report said.
Scaringe admitted that, as a new player in the auto industry, the company had difficulty securing computer chips. As a result, the automaker cut its production targets for 2022 in half.
According to a report by Axios, Scaringi said, “I’m on the phone with CEOs of semiconductor suppliers every day.” “It’s a daily battle for customization and the number we get is exactly equal to the number of vehicles we make,” he added.
Rivian began selling its first models last fall – the R1T truck and R1S SUV. Last year, the electric-car maker had a massive initial public offering that briefly valued the company on major automakers like Ford and General Motors, but since then Rivian’s share price has plummeted.