Overcoming material and other shortages

Issue #79, May 8th, 2021

Desperate times call for desperate measures. The automotive industry faces shortage of critical parts and materials. Steps are taken to address each one of them. There is innovation happening towards chip miniaturization. To face the acute chip shortage, automotive OEMs are rolling back nice-to-have features. The International Energy Agency has suggested countries to keep inventories of rare earth materials required for battery making, to avoid dependency on the few countries where they are available. Countries like Turkey are moving towards indigenous, locally made chips to avoid dependency on other countries. Recycling of rare materials is a big business opportunity. Here are some recent updates.

Rolling back features to save chips

When automakers were first hit with chip shortages at the end of last year, they tried idling factories until the troubles blew over. But with the crisis stretching into its fifth month and getting worse, they’re getting creative to keep at least some production moving forward. For decades, carmakers moved steadily to include more and better advanced features; now, they’re stripping some of them out -- at least temporarily -- to salvage their sales. That rollback underscores the depth of the issues facing the industry. Carmakers are also building vehicles with less technology. - Bloomberg

Stockpiling critical battery metals

Western governments should consider stockpiling critical battery metals such as cobalt and lithium, the International Energy Agency said, in a stark warning of the geopolitical risks that accompany the green-energy transition. That call comes as some policy makers worry the shift from burning fossil fuels to a greener economy will expose the world to new threats. Unlike oil, a relatively ubiquitous commodity, production and processing of minerals such as lithium, cobalt and some rare earth elements is highly concentrated, with the top three producers accounting for more than 75% of global supply. - Bloomberg

Innovation in the chip industry

A global shortage of semiconductors has cast a cloud over the plans of carmakers and other companies. But there’s a silver lining for Silicon Valley executives like Aart de Geus. He is chairman and co-chief executive of Synopsys, the biggest supplier of software that engineers use to design chips. That position gives Mr. de Geus an intimate perspective on a 60-year-old industry that until recently was showing its age. The semiconductor field is entering a surprising new era of creativity, from industry giants to innovative start-ups seeing a spike in funding from venture capitalists that traditionally avoided chip makers.

TSMC and Samsung Electronics, for example, have managed the increasingly difficult feat of packing more transistors on each slice of silicon. IBM on Thursday announced another leap in miniaturization, a sign of continued U.S. prowess in the technology race. Perhaps most striking, what was a trickle of new chip companies is now approaching a flood. - NY Times

Turkey and its indigenization plans

As the world grapples with a chip crisis that has particularly plagued global automakers, Turkey is relying on a local production center that produces components for the country’s ever-growing defense industry. The National Electronics and Cryptology Research Institute is attempting to develop the components at its Semiconductor Technologies Research Laboratory. - Daily Sabah

EVs and circularity of materials

The engineer who helped Elon Musk turn Tesla into a powerhouse sees a future “where every vehicle is electric” – and an unfathomably profitable market in recycling the valuable metal from all those batteries. Four years ago Tesla’s CTO JB Straubel was ramping up battery output at its sprawling Gigafactory near Reno, Nevada when inspiration struck: Why not start a company to recover metals from the factory’s scraps and other used electronics and turn them back into usable lithium, cobalt and graphite to make new batteries. - Forbes

Lower insurance premiums for EVs

The average cost of insuring an electric car in the UK is ￡45 less than the cost of covering a petrol or diesel car, according to research from the website Comparethemarket.com. Analysis of annual premiums in the first three months of the year showed electric car drivers were charged an average of ￡566, while petrol and diesel drivers paid ￡611. Dan Hutson, the head of motor insurance, at Comparethemarket.com, said the difference was explained by a range of factors, including electric cars having fewer complex moving parts to be damaged in an accident. He added: “Electric cars are typically less likely to be stolen and more likely to be recovered when they are, due to their limited range and because charging them is relatively time-consuming.” - The Guardian