EV challenges

Issue #194, March 23, 2023

Batteries, their performance, cost, and charging infrastructure to charge are the visible and know challenges for electric vehicle (EV) adoption. But as organizations aim to take off on large scale manufacture of EVs, more challenges come out. Foxconn faces pressure in scaling up EV manufacture and post sale maintenance. EV sale may be picking up, but battery circularity needs to reach its economies of scale for profitable operation. Tesla meanwhile has been implementing productivity and engineering change related continuous improvement initiatives to reduce the cost of its EVs, exerting pressure on peers. The lack of standard operating procedures to assess and repair battery damage is leading to their early scrappage. OEMs like Ford and Volkswagen have shut down their autonomous driving unit due to the lack of business opportunity and the need for associated post sales services. Below are some updates on challenges faced in the broad electric mobility industry.

EVs harder to build than iPhones

Foxconn's dreams of building electric cars are running into the reality of recalls and fledgling partners in Lordstown, Ohio. Foxconn's prediction for its auto business was to generate $33 billion in annual revenue by 2025. But cars are turning out to be tougher than electronic gadgets. Its Lordstown pickup production had to be suspended because the cost of making the trucks exceeded the targeted sale price of $65,000. A recall had to be issues when an owner reported loss of power while driving in cold weather. - Bloomberg

EVs and battery circularity

The US may have reached a tipping point in its transition to EVs. From new models to making your family car part of the grid, the latest developments all point toward an accelerating trend of electrification on American roads. Except for one thing: batteries. Their vast and dirty supply chains mean an EV driver would have to travel 13,500 miles for their vehicle to become carbon neutral. - Bloomberg

EVs and cost cut pressure

Car makers trying to catch up to Tesla's EVs were thrown a curveball recently with Elon Musk’s latest goal: slashing the cost of building next-generation cars by 50% in coming years. Tesla has engaged in continuous efforts to whittle away cost, saying it has achieved 30% improvements since 2018 through a whole host of areas, including productivity, engineering changes and supplier scale. - WSJ

Battery damages and repairability

For many EVs, there is no way to repair or assess even slightly damaged battery packs after accidents, forcing insurance companies to write off cars with few kilometres - leading to higher premiums and undercutting gains from going electric. And now those battery packs are piling up in scrapyards in some countries, a previously unreported and expensive gap in what was supposed to be a "circular economy". - Channel News Asia

Electrification vs autonomy

Autonomous taxi faced the challenges of both the technology and business models. Business model was the bigger challenge. The self-driving taxi companies did not make any money. They did not plan for associated services other than driving such as maintenance of vehicles, charging them and their hygiene. Electrification of mobility was a need of the hour and needed big investments. - CNBC