American electric vehicle manufacturer Rivian Automotive Inc. CEO RJ Scaringe has warned that the electric vehicle industry will soon run into battery shortages.
Scaringe stressed that this challenge may even outweigh the current chip shortage. At the moment, many car companies are trying to ensure the supply of key materials for batteries – cobalt, lithium, nickel, etc., and some companies are building their own battery factories to launch more battery-powered models in the future.
The ability to make enough batteries will be one of the biggest hurdles for an industry trying to boost EV sales from the millions now to tens of millions within a decade, Scaringe said, “from the extraction of raw materials. From processing to manufacturing the battery itself, there will be shortages in every link.”
RJ ScaringeRJ Scaringe
“Simply put, all the battery production in the world combined is less than 10 percent of what we need in 10 years,” Scaringe said last week during a tour of the company’s factory in Normer, Illinois.
Scaringe told reporters that the semiconductor shortage that has disrupted the auto industry is just a relatively small supply-demand imbalance that has led to over-buying and hoarding by many companies, putting the auto industry in the difficult position it is in now.
For batteries, the situation is expected to be an order of magnitude worse, he added, “semiconductor shortages are just a small appetizer to the battery shortages we’ll be feeling over the next 20 years.”
Like the rest of the auto industry, Rivian has faced massive supply disruptions and experienced multiple production shutdowns internally, causing it to miss production expectations last year. Rivian in March halved planned production for this year, from 50,000 vehicles to 25,000.
In addition, in view of Qualcomm’s inflation in the United States and the prospect of aggressive monetary policy, many investors have decided to withdraw funds from electric vehicle startups and turn to safer assets. Rivian’s stock has fallen by more than 60% since the beginning of the year, and as of last Friday’s closed at $40.59 in U.S. stocks.