The EV battery ‘catch-22’

While setting aggressive goals for electric vehicle market share, the Biden administration also wants tariffs and or restrictions on the importation of vehicles and the minerals needed for their batteries – creating heightened concerns over supply chains in what can be described as a “Catch-22” situation.

Solutions to some of the problems include battery recycling and increased domestic mining, however, the U.S. is currently limited in its capacity for both. Federal funds are spurring new recycling plant projects, but questions remain on whether there will be enough used material to meet projected needs.

In his e-book, “The EV Transition Explained,” Robert Charette, longtime systems engineer, and contributing editor for IEEE Spectrum, says making the transition is harder than anyone thinks. He recently told The Center Square it is truer now than it ever was.

“None of this is simple,” he said.

His argument centers on the lack of planning and systems engineering on initiatives that are politically, not engineering, driven. While change is possible, he suggested it would require trillions more in government spending and enforcing those changes through law.

Charette identified many serious issues in setting up the EV battery infrastructure – and even if those challenges are met, he said, there may be tradeoffs between affordability, security and environmental concerns.

Profitability. Battery recycling is a still-developing process which is time consuming and expensive. The cost of purchasing recycled materials may be more costly than buying them new.

Manufacturing demand and potential backlog. The U.S. will require eight million batteries annually by 2030 to meet the government’s EV target, with increases each year after that.

Standardization. Batteries vary in configuration, size, and chemistry.

Domestic mining. While decreasing our dependency on outside sources, what are the environmental impacts? It can also take years to acquire permits and get a lithium mine up and running.

Mineral shortfalls. Secure and sustainable access to critical minerals like copper, lithium, cobalt, and nickel is essential for a smooth and affordable transition to clean energy. An analysis by the International Energy Agency indicates a “significant gap” between the world’s supply and demand for copper and lithium. Projected supplies will only meet 70% of the copper and 50% of the lithium needed to achieve 2035 climate targets.

The report said that “without the strong uptake of recycling and reuse, “mining capital requirements would need to be one-third higher. The agency also emphasizes China’s dominance in the refining and processing sector.

Transportation of discharged batteries classified as hazardous waste is one of the costliest steps of the recycling process. Experts suggest updates to federal EPA and DOT regulations for how battery-related waste is classified. In addition to health and safety, they say clearer definitions of what constitutes hazardous waste would help reduce transportation costs. Many recycling plants are being built in regions where production sites are located to address this.

Supply chain and skills gap shortages. The timetable set by the government is not aligned with the capabilities of the current supply chain. Software plays a key role in the management and operation of an EV battery, and automakers are competing for a limited supply of software and systems engineers.

Competing interests. The goal is to create a circular battery economy, reducing the need for raw materials. However, an EV battery that is no longer useful for propelling a car still has enough life left for other purposes such as residential energy storage. Experts propose a battery material hierarchy where repurposing and reusing retired EV batteries are more favorable to immediately recycling them, detouring them out of the cycle.

Charette says the biggest problem with recycling projections is that they are built on assumptions that have not been tested.

“We won’t know whether these assumptions hold until we reach a point where we are recycling millions of EV batteries,” he said.

Because most EV lithium-ion batteries produced through 2023 are still on the road, the International Council on Clean Transportation reports that the majority of materials being used as feedstock by recycling plants currently come from scrap materials created during battery production.

According to Charette, manufacturers also claim future generations of batteries will last 15 to 20 years, which he says would put a bigger kink in the used-battery supply chain.

Another issue contributing to consumers’ reluctance to buy an EV is the inability to determine the overall health of your battery. Current testing methods are inefficient and costly.

EV adoption has so far not met projections and with all the competing interests, Charette said the market will ultimately tell us what direction the situation is headed. He is also intrigued over the impact government pressure will have on the eventual outcome.

He said many individual components have yet to be worked out, adding that although there is a vision, “we’re a heck of a long way from that vision to getting where we need to go.”

In his opinion, battery recycling issues are even further behind than transitioning the electric grid to renewable energy sources.

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Nissan, Honda scrap $60B merger talks amid growing tensions

Published on February 6, 2025

Todayville

MxM News

Quick Hit:

Nissan is reportedly abandoning merger talks with Honda, scrapping a $60 billion deal that would have created the world’s third-largest automaker. The collapse raises questions about Nissan’s turnaround strategy as it faces challenges from electric vehicle competitors and potential U.S. tariffs.

Key Details:

Nissan shares dropped over 4% following the news, while Honda’s stock surged more than 8%, signaling investor relief.
Honda reportedly proposed making Nissan a subsidiary, a move Nissan rejected as it was initially framed as a merger of equals.
Nissan is struggling with financial challenges and the transition to EVs, still reeling from the 2018 scandal involving former chairman Carlos Ghosn.

Diving Deeper:

Merger talks between Nissan and Honda have collapsed, according to sources, after months of negotiations to form an auto giant capable of competing with Chinese EV makers like BYD. The proposed deal, valued at over $60 billion, would have created the world’s third-largest automaker. However, differences in strategy and control ultimately derailed the discussions.

Reports indicate that Honda, Japan’s second-largest automaker, wanted Nissan to become a subsidiary rather than an equal merger partner. Nissan balked at the idea, leading to the collapse of negotiations. Honda’s market valuation of approximately $51.9 billion dwarfs Nissan’s, which may have fueled concerns about control. The failure of talks sent Nissan’s stock tumbling more than 4% in Tokyo, while Honda’s shares rose over 8%, reflecting investor confidence in Honda’s independent strategy.

Nissan, already in the midst of a turnaround plan involving 9,000 job cuts and a 20% reduction in global capacity, now faces mounting pressure to restructure on its own. Analysts warn that the failed merger raises uncertainty about Nissan’s ability to compete in an industry rapidly shifting toward EVs. “Investors may get concerned about Nissan’s future [and] turnaround,” Morningstar analyst Vincent Sun said.

Complicating matters further, Nissan faces heightened risks from U.S. tariffs under President Donald Trump’s trade policies. Potential tariffs on vehicles manufactured in Mexico could hit Nissan harder than competitors like Honda and Toyota. The stalled deal also impacts Nissan’s existing alliance with Renault, which had expressed openness to the merger. Renault holds a 36% stake in Nissan, including 18.7% through a French trust.

While both Nissan and Honda have stated they will finalize a direction by mid-February, the collapse of this deal signals deep divisions in Japan’s auto industry. With Nissan’s financial struggles and the growing dominance of Chinese EV makers, the company must now navigate an increasingly challenging market without external support.

Automotive

Trudeau must repeal the EV mandate

Published on January 25, 2025

Todayville

By Dan McTeague

Last Monday, Transport Canada released a bombshell statement, announcing that the Trudeau government’s program granting a $5,000 rebate to Canadians purchasing an Electric Vehicle (EV) had run out of money and would be discontinued, “effective immediately.” This followed a prior announcement from the government of Quebec that they would be suspending their own subsidy, which had amounted to $7,000 per EV purchased.

This is, of course, a game changer for an industry which the Trudeau government (as well as the Ford government in Ontario) has invested billions of taxpayer dollars in. That’s because, no matter the country, the EV industry is utterly dependent upon a system of carrots and sticks from the government, in the form of subsidies and mandates.

EVs have remained notably more expensive than traditional Internal Combustion Engine (ICE) vehicles, even with those government incentive programs. Without them the purchase of EVs becomes impossible for all but the wealthiest Canadians.

Which is fine. Let the rich people have their toys, if they want them. Though if they justify the expense by saying that they’re saving the planet by it, I may be tempted to deflate them a bit by pointing out that EVs are in no way appreciably better for the environment than ICE vehicles, how all the lithium, nickel, cobalt, manganese, aluminum, copper, etc, contained in just one single EV battery requires displacing about 500,000 lbs of earth. Mining these materials often takes place in poorer countries with substandard environmental regulations.

Moreover, the weight of those batteries means that EVs burn through tires more quickly than gas-and-diesel driven vehicles, and wear down roads faster as well, which among other issues leads to an increase in particulate matter in the air, what in the old days we referred to as “pollution.”

That is a potential issue, but one that is mitigated by the fact that EVs make up a small minority of cars on the road. Regular people have proved unwilling to drive them, and that will be even more true now that the consumer subsidies have disappeared.

Of course, it will be an issue if the Trudeau Liberals get their way. You see, Electric Vehicles are one of the main arenas in their ongoing battle with reality. And so even with the end of their consumer subsidies, they remain committed to their mandates requiring every new vehicle purchased in Canada to be electric by 2035, now just a decade away!

They’ve done away with the carrots, and they’re hoping to keep this plan moving with sticks alone.

This is, in a word, madness.

As I’ve said before, the Electric Vehicle mandate is a terrible policy, and one which should be repealed immediately. Canada is about the worst place to attempt this particular experiment with social engineering. It is famously cold, and EVs are famously bad in the cold, charging much slower in frigid temperatures and struggling to hold a charge. Which itself is a major issue, because our country is also enormous and spread out, meaning that most Canadians have to do a great deal of driving to get from “Point A” to “Point B.”

Canada is sorely lacking in the infrastructure which would be required to keep EVs on the road. We currently have less than 30,000 public charging stations nationwide, which is more than 400,000 short of Natural Resources Canada’s projection of what we will need to support the mandated total EV transition.

Our electrical grid is already stressed, without the addition of tens of millions of battery powered vehicles being plugged in every night over a very short time. And of course, irony of ironies, this transition is supposed to take place while our activist government is pushing us on to less reliable energy sources, like wind and solar!

Plus, as I’ve pointed out before, the economic case for EVs, such as it was, has been completely upended by the recent U.S. election. Donald Trump’s victory means that our neighbors to the south are in no immediate danger of being forced to ditch gas-and-diesel driven cars. Consequently, the pitch by the Trudeau and Ford governments that Canada was putting itself at the center of an evolving auto market has fallen flat. In reality, they’ve shackled us to a corpse.

So on behalf of my fellow Canadians I say, “Thank you,” to the government for no longer burning our tax dollars on this particular subsidy. But that isn’t even half the battle. It must be followed through with an even bigger next step.

They must repeal the EV mandate.

Dan McTeague is President of Canadians for Affordable Energy.