THOUGHT LEADERSHIP
Things to Consider Regarding CO2 Emissions Brian Daugherty Chief Technology Officer 248.430.5966 │ bdaugherty@mema.org
The automotive industry and the world in general are currently facing a wide array of concerns. It is a unique combination of geopolitical, regulatory, safety, consumer behavior, and “good ole” technologyrelated issues. So, I decided to write down all my questions and let you ponder the answers. I do not have answers to most of them – although I do have my own opinions. As you think about how your company is approaching the global transition to lower CO2 emission vehicles, here are some questions and topics to consider: •
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We will soon see if all the recent and increasingly optimistic battery electric vehicle (BEV) forecasts and projections are correct. Will internal combustion engine (ICE) vehicle volumes rapidly decline, or will the energy density and convenience of gasoline be harder to replace than is projected? The great thing about the world is that since everyone is “all in” – given the over $500B in global committed EV investment – we will see what happens quickly. Will US consumers buy BEVs instead of cheaper, quicker-to-refuel ICE vehicles? If they do, will there be enough high-grade nickel and lithium along with cobalt and copper to supply the demand? Will we be able to ramp up enough mines and processing capability to keep up with the demand curve? If not, what happens? Will nations continue to try to corner the market on these raw materials? What happens to the cost of batteries? Will mass market consumers pay for expensive BEVs as OEMs seem to think? Many OEMs appear to believe that a $60K to $100K vehicle is “mass market” and that the market for that price range is quite large. Will OEMs even need to produce reliable and affordable entry level, high mpg vehicles or will the market consist of just expensive BEVs to balance out the fleet fuel economy for midsize and large ICE SUVs and trucks? How will this impact lower income segments of the population? What will happen to these battery packs at the end of their fairly short useful lifespan? Will a new battery technology save the day with double the range, half the cost, half the weight and volume, and that contains no lithium, nickel, or cobalt? How will these vehicles depreciate? What will happen to older BEVs that need a replacement battery pack that costs more than the vehicle is worth (see the internet for several amusing examples)? Will replacement battery packs even be worth making for low volume vehicles? For that matter, will any replacement parts be worth making for low volume vehicles? We see coal plants (high CO2 emitters) being brought out of mothballs in Europe even as nuclear plants with zero CO2 emissions continue to be shut down in Germany. Meanwhile, France is planning to build more nuclear plants (right next to Germany). Does any of this make sense? Could the Germans sell their mothballed or soon to be mothballed nuclear plants to France and save everyone a lot of trouble along with significant capital investment? I’m only half kidding. Where is all the electricity going to come from if BEVs make up a significant portion of the car parc?
6 │ OESA News - 2022 Second Quarter
