Tesla co-founders say EV sales are about to start, but there are questions about whether production can continue

Palette of lithium-ion batteries finished in JB Straubel’s Redwood Materials are ready for reuse.

There is good and bad news for those who believe that sales of electric vehicles will begin, with Tesla co-founder JB Strabell, founder and CEO of battery recycling firm Redwood Materials.

Strouble says demand is growing, but the auto industry is not moving fast enough to ensure production will continue.

“It simply came to our notice then. “This is a really strong change. From internal combustion sales to sales of EVs, there has been an increase of almost 100% in various sectors.”

Straubel says the industry’s sales estimates, which predict that 12.7% of all U.S. auto sales will be EVs by 2025, could be much lower. “If you look at how fast the adoption trend is growing in some parts of Europe and other parts of the world, I think it shows a potentially even higher percentage path than in the mid-decade,” he said.

Because of that demand, Redwood Materials is spending $ 1 billion to build a new plant in McCarron, Nev., He said. When completed later this year, the facility will produce anode copper foil used by Panasonic to manufacture battery cells that will eventually be manufactured in battery packs. Tesla Gigafactory in Nevada.

Redwood Materials estimates that the plant, which will eventually employ more than 500 people, will produce enough anode copper foil to supply 1 million EVs each year. The company said it would be the first in the United States to supply anode copper foil, with most of the supplies currently being imported from Asia, mainly China and South Korea.

While automakers are producing ramp-ups for electric vehicles, plans for lithium-ion batteries are skyrocketing. Last year, the global capacity for lithium-ion battery manufacturing was 713 gigawatt-hours, according to Elixpartners, an automotive industry consulting firm. By 2025, AlixPartners expects that number to triple to 2,273 gigawatt hours, with US EV battery production more than quadrupling.

With so much capacity coming to the line, the traditional wisdom is the cost of battery cells and the cost of battery packs will go down, which will help reduce the cost of EVs and improve profits.

ESsource, Boulder, Colo. Based on a consulting firm that tracks battery cell prices, estimates that the cost per kilowatt hour of an automotive battery cell will drop from $ 147 in 2022 to $ 98 in 2025. While those estimates are encouraging, declining prices are contingent. When the battery supply chain grows and is able to support strong demand.

“With such a high level of demand for batteries over the next decade, the raw materials that go into those batteries are likely to be in short supply,” said Stephen Brown, senior director at Fitch Ratings.

Straubel is not convinced the EV battery industry will be ready.

“There is an absolute risk that we may see a recurrence of the lack of a semiconductor type that could slow down and impede the growth of EVs,” he said.

Standing next to the structure of the plant that Redwood expects to be operational soon, Straubell admits his company is in the race to convert it to a petrol-powered battery-powered vehicle.

“We’re working around the clock, literally twenty-four hours a day, building facilities like our backyard to build that supply chain and try to move that barrier forward before it happens,” he said.

CNBC’s Meghan Reeder contributed to this article


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