From motor magnets with toxic histories to batteries made using abundant fossil-fuel power, many challenges face carmakers who seek to purge dirty materials from their supply chains to satisfy regulators and investors. .
These constraints represent opportunities for a growing group of companies in the electric vehicle (EV) ecosystem that bet they are able to capitalize on that demand.
These include Advanced Electric Machines (AEM) in northern England, which is working with Volkswagen luxury brand Bentley and others in the auto industry to develop recyclable electric motors free of rare earth metals, which are often polluting chemicals. are produced using
CEO James Widmer said, “Our customers need ways to decouple internal combustion engines that are cost-effective and sustainable, without having to put this very rare earth stuff into their cars.”
Increasing scrutiny of supply chains comes as the European Union, which last year announced draft laws to implement net-zero emissions targets, considered charging for excess carbon on imports, as well as ethical sourcing and Laws requiring a recycling plan for EV batteries.
Globally, national carbon taxes are less likely to cost automakers, while investors and financiers increasingly favor companies with strong environmental, social and governance (ESG) credentials.
“The focus on ESG has become more intense,” said Moshil Biton, CEO of Israeli battery technology company Adionics, which makes three-dimensional electrodes that Bitten says are more efficient, creating cleaner but less energy-dense battery chemistry commercially. are practically feasible.
“But that is nothing in comparison to what is to come.”
Still, it remains to be seen how many companies tapping the market for cleaning electric cars will succeed in the fast-growing EV technology sector; What is modern today may be obsolete tomorrow.
Given the fierce competition, any project that is not sufficiently advanced at the right time will risk losing its chances, according to McMurray Whale, environmental sustainability strategist at Cormark Securities in Toronto.
“You will not be able to attract the interest of investors because there are so many of them and they are all trying to argue that they are the best,” he said.
‘Road Map to Zero’
The demand is real, however, from car makers, who face a daunting task navigating the challenges of manufacturing everything from steel to aluminum using cleaner processes, to finding less environmentally harmful battery chemistries.
“We only source new business with suppliers,” said Andy Palmer, CEO of Switch Mobility, an electric vehicle pioneer, a British-based EV maker owned by Indian commercial vehicle maker Ashok Leyland.
Switch buys credits to offset the carbon used to make the metal components and factors in that cost when estimating new parts, he said.
Squeezing carbon out of the supply chain is a “critical part” of BMW’s carbon-reduction strategy, said sustainability vice president Thomas Baker.
The German carmaker is in talks with all of its battery suppliers and many of its steel and aluminum suppliers that their materials are made using renewable energy, Becker told a conference in London in March.
The problem with EVs is that they are so carbon intensive to make, they have to drive thousands of miles before causing less damage to the environment than a gas-guzzling saloon.
BMW has measured the CO2 footprint in its supply chain. If it does not take action, according to the carmaker, its footprint per vehicle will be 18 tonnes of CO2 in 2030, compared to 12 tonnes per vehicle in 2019. But its carbon reduction plans should reduce that number to nine tons by 2030, it says.
The need for green EVs has sent some car makers back to the drawing board.
Ansys, a Pennsylvania-based engineering company that develops modeling software for various industries, has seen increasing demand from car manufacturers seeking to simulate cars and components with green or lighter materials such as aluminum instead of steel. , said Pepi Maximovic, director of applications engineering.
“The effort to address these issues has accelerated … to bring better cleaner, greener, meaner technology to market faster,” she said.
‘Carbon tax is coming’
Past corporate sustainability efforts have often been vague and ridiculed as “greenwashing”.
Costa Caldis, chief operating officer of supply chain tracing company SAFE, said carmakers are moving in the right direction, but not as fast.
“Stakeholders are seeking supply chain visibility, not just statement.”
Douglas Johnson-Poensgen, CEO of Circular, which maps supply chains for the likes of BMW and Volvo, said funding from investors was increasingly tied to ESG goals.
“Everyone recognizes that they need to know where they are sourcing things and what they have inherited from their supply chain.”
Makram Azar, CEO of London-based investment group Full Circle Capital, said auto sector companies that “tick all the right ESG boxes” should find it easier to raise capital.
“Large asset managers who have allocated large sums of money to invest in ESG compliant companies have found that there are not enough of them,” Azar said.
A higher carbon levy could help change that.
Full Circle has invested in BritishVolt, a British startup building an EV battery plant that will run using only renewable energy.
BritishVolt’s executive chairman Peter Rolton said national governments would need an alternative to fuel taxes that raise large sums of money, and that taxing carbon would help take it out of the supply chain.
“Carbon taxation is an essential part of the 2050 net-zero vision,” he said. “You can see that one is coming.”
mining in madagascar
AEM, based in Washington, a city that has its roots in the industrial history of north-east England, has developed a recyclable motor for EVs using electrical steel and aluminum instead of copper and magnets, thus removing rare earth metals. has been removed. CEO Widmar said AEM’s motors will be cheaper than conventional motors and have been up to 15 percent more efficient in the carmaker’s tests.
As well as environmental reasons, many car manufacturers and suppliers want to reduce dependence on China, which controls 90 percent of the global supply of rare earth metals.
China’s dominance extends to graphite, which is important for anodes for EV batteries, which are typically produced using electricity from coal.
Canada-listed mine developer Nextsource plans to begin commercial production of graphite in Madagascar by 2023 to capitalize on demand from companies looking to diversify supply.
Executive Vice President Brent Nykoliation said contracts with carmakers should be lucrative and long-term as long as they want to lock in supplies to suit their needs.
“The conversation has changed dramatically over the past 12 months,” Nicolayation said, referring to the carmaker’s association with mineral production.
© Thomson Reuters 2022