It’s been clear to anyone who has been following the electric vehicle space for a while that the core matter for growth — whether for a company or the industry as a whole — is batteries. Batteries, batteries, batteries. And batteries some more. A couple of years ago, catching word of a potential battery mineral supply crunch in the second half of this decade, I started digging in more deeply to try to understand this topic as well as possible — or, at least, as well as needed to come to big-picture conclusions about EV sales growth.
One of the big takeaways was that there are not enough firm commitments for battery minerals to actually match EV sales targets and expected growth a few years from now, and there certainly aren’t enough firm commitments for sales targets and expected growth a handful of years from now. Automakers are making announcements, saying they plan to achieve much higher EV sales in the coming decade, and implying that they’ll be able to get all the batteries they want from battery producers. To repeat, though: there are not firm enough commitments for the battery minerals for everyone to hit their targets.
As much as I trust the battery experts I’ve talked to about all of this, there’s also always the question: is this really the story? I have to keep wondering: are legacy automakers really still not taking this EV transition seriously enough and not securing the battery supplies they should need? Can this really be true?
The interesting thing is that one of the people who would perhaps know what’s needed and what’s happening better than anyone else, Tesla co-founder and longtime former CTO JB Straubel, just said basically the same thing on a podcast. Talking with Jason Calacanis for his This Week in Startups show, Straubel said:
“So many different OEMs, countries, factories, customers are leaping into EVs. You know, making these huge announcements, you know, saying that they’ll be fully electric this decade or the next. They haven’t — I don’t think they’ve done the math fully [on] what that entails on the supply chain and tracing it all the way back, literally all the way back to the mines. You need to do that, or else, you know, you haven’t really solved it. It has the feeling to me of kind of like a giant overbooked flight.
“All these people like, ‘Oh, this is great. We’re all gonna go to that new place. We all wanna go there. It looks great. Sweet. Let’s all go on the plane and go.’ So everybody’s saying that we all wanna go there at the same time. Meanwhile, we have to sort of build the planes to get there; we have to figure out how to sequence everyone. The figurative runway is like the time to do all this, and it could all get sorted out over time. But obviously, we’re trying to do this fast as a society and as a species.”
So, yes, it seems that automakers are indeed not taking the battery supply matter seriously enough, not securing enough dedicated battery supply yet, and not running at full speed.
Watch Straubel’s full interview with Jason Calacanis’ This Week in Startups in the YouTube video to hear more.