Stellantis CEO worries that a battery shortage would occur by 2025

Battery shortages could hit the industry as early as 2025, according to the CEO of Stellantis, which is one of the world’s largest automakers. Even with substantial new investment opportunities in European “gigafactory” battery facilities and suppliers already operating at scale in Japan, China, and South Korea, Stellantis CEO Carlos Tavares believes that current battery production plans may not be enough to meet demand from automakers as they rapidly increase electric vehicle sales in the coming years.

Since the commencement of the coronavirus epidemic, the automobile industry has been plagued by recurrent shortages of computer chips, which has hampered its recovery. Despite high demand in several major countries, the sector has lost billions of pounds due to shortages of critical parts.

Just as automakers around the world aim to boost the manufacturing of electric vehicles, Tavares cautioned that battery availability could be the next hurdle facing the industry. Following a merger last year, Stellantis now controls Peugeot, Vauxhall, Fiat, Chrysler, and Jeep, and plans to sell entirely battery-electric vehicles in Europe by 2030.

“I can predict a low supply of batteries around 2025, 2026, and if there isn’t a short availability of batteries, there will be a huge reliance of the Western globe on Asia,” he said on Tuesday at a Financial Times-sponsored car industry conference. “We’re well prepared for that.” The rate at which everyone is constructing battery manufacturing capacity may be on the verge of being unable to serve the quickly shifting markets in which we operate.”

Stellantis and its precursor Peugeot under Tavares were some of the slower to embrace electric technology. Tavares has warned of difficulties in the shift away from dirty fossil fuel vehicles on numerous occasions. Last year, he claimed that the UK government had jeopardized the future of Vauxhall’s Ellesmere Port factory by imposing a “brutal” ban on pure ICE (internal combustion engines)’s sales after 2030, and while Stellantis later decided to make an investment in £100 million in upgrading production, much to the reprieve of the UK automotive industry.

Tavares also cautioned that the transition to electric power could pose “geopolitical dangers” due to reliance on minerals extracted in nations considered critical competitors. “In a few years, we might not like how those resources are sourced,” he remarked.

At the FT’s car summit, Renault CEO Luca de Meo also expressed concern about the impact of future climate change legislation and the electric shift on jobs. According to him, European regulations might cost France up to 70,000 jobs since the rules, which put tougher limits on nitrogen oxide and carbon dioxide emissions from gasoline and diesel automobiles, vans, trucks, and buses, could raise vehicle costs and reduce demand.

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