2023-11-04 04:00:00
Investments of $16 billion from Ford on hold, a $7 billion project from Honda and General Motors (GM) aborted, electric sales falling by 50% in Europe for Volkswagen, not to mention the price of raw materials. .. Should we be worried about the billions of public funds injected into our battery sector?
“If the electric vehicle production market collapses, it will be worrying,” warns Sylvain M. Audette, visiting professor in marketing and associate member of the Research Chair in Energy Sector Management at HEC Montréal.
“We are around 10%, or 10 million electric vehicles. Where will it be in 2035? 20, 30 or 50 million? That’s the big question,” summarizes the one who observes the global market.
Fortunately, the mega factory of the Swedish Northvolt, which will be built in the suburbs of Montreal, is in a good position, he believes. Northvolt’s largest shareholder is the German Volkswagen, which still has an appetite for batteries.
Sylvain M. Audette, associate member of the Research Chair in Energy Sector Management at HEC Montréal. Provided by HEC Montréal
Northvolt ($1.37 billion), Ford/EcoProB/SK ($322 million), General Motors/POSCO ($152 million), Nemaska Lithium ($425 million), Vale ($55 million), Lion Électrique ($50 million $), Taiga Motors ($30 million)… Quebec has invested, lent and granted a lot of public funds in the emerging sector.
Industrial racing
For Yvan Cliche, former commercial delegate at Hydro-Québec International (HQI), today at the Center for International Studies and Research (Cérium), inflation, the rise in interest rates, the still high cost come play spoilsport.
“Quebec, despite the current less favorable context for electric vehicles, must move forward, at the risk of falling behind its competitors,” he observes.
Yvan Cliche, retired international civil servant Provided by CERIUM
According to him, Quebec must stay the course to respond to the climate emergency, stay in the industrial race and get rid of China’s control in the chains.
Fitzgibbon remains optimistic
Asked about this on Friday by The newspaperthe Minister of the Economy, Pierre Fitzgibbon, who is making the battery sector his flagship project, has recognized a certain lack of steam.
“Is there a global slowdown in the adoption of electric transportation because prices are still too high? Maybe,” he analyzed.
Construction of the first 30 GWh phase of the Northvolt plant will begin by the end of the year. Model provided by Northvolt
“With the economic slowdown and inflation, people do not want to pay the premium perhaps,” he continued, on the sidelines of an announcement in the metropolis.
Pierre Fitzgibbon, however, remains optimistic. He says he still feels the excitement. A sign that there is interest, he says that recently a big player told him of their desire to build six factories like Northvolt and asked Quebec to participate.
“The only [projet] which was announced, and which is not necessarily yet in the pipeline, is BASF, announced two years ago, but honestly, today with the shortage of megawatts, we have three cathodivers, we have GM, Ford and Northvolt, we are well positioned,” he concluded.
Signs of slowdown…
Batteries
Panasonic, which supplies batteries to Tesla, has slowed production due to a decline in global appetite for electric vehicles. LG Energy’s financial chief warned that demand for electrics “could be lower than expected next year.” Chipmaker Onsemi has just laid off 900 people because it is concerned about weakening demand for electric vehicles. That said, the battery market could still reach $400 billion by 2030, according to McKinsey.
Car manufacturers
Tesla CEO Elon Musk recently said that rising interest rates are hurting consumers’ wallets and that he may lower prices once again. Volkswagen saw its electric sales plummet by 50% in Europe. Ford has put its $16 billion investments on hold because Americans are more cautious than it thought. Honda and American General Motors (GM) have ended their $7 billion “cheap” electric car project.
Critical and strategic minerals
Minerals that go into electric car batteries have seen their prices plummet in recent months. However, according to the magazine InsideEVs, seeing lithium fall by 67% and cobalt by 20% is a very bad sign. “If demand falls, they [les fabricants] buy fewer raw materials. And producers, to allocate more raw materials to the market, lower their prices. Ultimately, prices fall because manufacturers produce less,” the media analyzed.
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