Automotive dilemmas

Issue #152, July 6th, 2022

The automotive industry has been facing questions for which there are no easy answers. One situation is due to the chip shortage. The question is whether to build incomplete vehicles without chips to avoid idle factories, and ship them when chips are available. But doing that made GM end up with 100,000 vehicles in its inventory in the last quarter. India's largest car maker faces an issue of safety vs profitability. Its popular small cars may not longer be viable economically if they need to be fitted with air bags as per the new policies the government is formulating. Lithium is popular for making electric vehicle (EV) batteries due to its superior energy density characteristics. But the European Union may declare it a 'reproductive toxin', severely denting its usage for EV batteries. There have been incidents of autonomous vehicles not obeying the local law. Whether to fine them or not is the question. Cars returning to work post the pandemic lockdowns revive the economy, with an environmental cost due to their emission. Life cycle assessment of the Carbon emission of EVs is an approach to compare EVs not just among them, but with other modes of mobility too. Here are some recent incidents where the auto industry faces a dilemma.

To build without chips or not

General Motors said it couldn’t deliver nearly 100,000 vehicles in the second quarter because it lacked computer chips and other parts, underscoring the supply-chain troubles that continue to plague the car business. GM said it built the vehicles mostly during June without semiconductors and other components, and set the cars aside rather than shipping them to dealerships. The chip shortage and broader supply constraints have hampered vehicle production for the past 18 months, snarling factory schedules and leaving auto makers straining to replenish inventory. - WSJ

Safety vs Profitability

Car maker Maruti Suzuki's Chairman RC Bhargava said in a recent interview that the car maker will not hesitate to "discontinue" small cars if they become unviable due to the government's recent polity interventions such as the proposal to mandate six air bags. India's largest car maker with more than 50% of market share faces a dilemma: will the hatchback customer – who has just upgraded from a scooter and is fighting fuel and food inflation - pay more for safety? The Chairman has a gut feeling the customer will not pay. - ET Auto

Lithium - toxic or not?

Lithium and battery producers warned the European Union that a proposal to classify the metal as a reproductive toxin could severely hurt Europe’s burgeoning EV industry. The material is a key part of EV batteries and widely used in pharmaceuticals, industrial lubricants and specialty glasses. A proposal being considered by the EU this month would put some lithium chemicals in the highest category of reproductive and developmental toxins. According to the ILO, Category 1A reproductive toxin is a substance that “is known to have produced an adverse effect on reproductive ability or capacity or on development in humans”. - Bloomberg and other sources

When autonomous vehicles disobey law

More than a half dozen Cruise robotaxis stopped operating and sat in a street in San Francisco recently, blocking traffic for a couple of hours until employees arrived and manually moved the autonomous vehicles. Fines for blocking the street sweeper are around $76 per car in San Francisco. The San Francisco Municipal Transportation Authority did not respond to requests for more information about how it handles such situations with autonomous vehicles. The issue calls into question the policy cities need to build around autonomous vehicles when they break the law. - Tech Crunch

Car usage for return to work

A report commissioned by the government-owned British train operating company LNER states that “cars returning to our roads post Covid-19 pose a huge and harmful risk.” Meanwhile, rail travel, argues the report, “provides low emission travel for millions of people.” The report continues that greater concern for the planet grew during the pandemic, “and it was clear that action needed to be taken at every level: Government, business and individual.” According to LNER, one of the company’s new Azuma trains emits 4 kilograns of carbon per passenger between Edinburgh and London. In comparison, a flight emits 132 kilograms per passenger, and a car emits 114 kilograms. - Forbes

Green EV ratings

EVs are drastically cleaner than conventional gasoline vehicles. However, there’s a growing awareness that none of this hardware comes without a carbon cost; there’s no such thing as a “zero-emission vehicle,” as they have been branded by policymakers and early champions. Steel body panels don’t grow on trees. Lithium doesn’t just flow out of the ground and into battery plants. And electricity — even the stuff coming from solar panels — isn’t captured without a great deal of capital and carbon expense. That’s why Bloomberg's EV ratings measure how “green” each of these machines is, based on the economy of the vehicle, how far it travels relative to how many pounds it weighs, and the size of its battery. - Bloomberg