$16 billion in investments from Ford are shelved, a $7 billion project from Honda and General Motors (GM) was canceled, Volkswagen’s electric sales fell 50% in Europe, not to mention the Commodity prices…Should we be worried about this? the billions in public money flowing into our battery sector?
“If the market for electric vehicle production collapses, it will be worrying,” warns Sylvain M. Audette, visiting professor of marketing and associate member of the research chair in energy sector management at HEC Montréal.
“We have about 10% or 10 million electric vehicles. Where will it be in 2035? 20, 30 or 50 million? “That’s the big question,” summarizes the world market observer.
Fortunately, he believes that the Swedish company Northvolt’s mega-factory, which is to be built in a suburb of Montreal, is in a good location. Northvolt’s largest shareholder is Germany’s Volkswagen, which still has an interest in batteries.
Sylvain M. Audette, Associate Member of the Research Chair in Energy Sector Management at HEC Montréal. Provided by HEC Montreal
Northvolt ($1.37 billion), Ford/EcoProB/SK ($322 million), General Motors/POSCO ($152 million), Nemaska Lithium ($425 million), Vale ($55 million), Lion Électrique ($50 million), Taiga Motors ($30 million)… Quebec has invested, lent and granted a lot of public resources in the emerging sector.
Industrial racing
For Yvan Cliche, former trade delegate at Hydro-Québec International (HQI), now at the Center for International Studies and Research (Cérium), inflation, rising interest rates and still high costs are playing spoilsport.
“Despite the current less favorable environment for electric vehicles, Quebec must move forward, even at the risk of falling behind its competitors,” he notes.
Yvan Cliche, retired international civil servant. Provided by CERIUM
In his opinion, Quebec must stay the course to respond to the climate emergency, stay in the industrial race and get rid of China’s control in the chains.
Fitzgibbon remains optimistic
Asked about the issue by Le Journal on Friday, Economy Minister Pierre Fitzgibbon, who makes the battery sector his flagship project, recognized a certain lack of dynamism.
“Is there a global slowdown in the adoption of electric transport because prices are still too high? Maybe,” he analyzed.
Construction of the first 30 GWh phase of the Northvolt plant will begin at the end of the year. Model provided by Northvolt
“With the economic slowdown and inflation, people may not want to pay the premium,” he continued on the sidelines of an announcement in the metropolis.
However, Pierre Fitzgibbon remains optimistic. He says he still feels the excitement. A sign that there is interest, he says, is that a major player recently told him about his desire to build six factories like Northvolt and asked Quebec to participate.
“The only [projet] What has been announced and what is not necessarily still in the pipeline is BASF, announced two years ago, but honestly, today, given the shortage of megawatts, we have three cathode emitters, we have GM, Ford and Northvolt, we are well positioned,” he concluded.
Signs of slowing…
Batteries
Panasonic, which supplies Tesla with batteries, has slowed production as global demand for electric vehicles has fallen. LG Energy’s chief financial officer warned that demand for appliances “next year could be lower than expected.” Chipmaker Onsemi just laid off 900 employees amid fears of weakening demand for electric vehicles. However, according to McKinsey, the battery market could still reach $400 billion by 2030.
Car manufacturer
Tesla CEO Elon Musk recently said that rising interest rates are putting a strain on consumers’ wallets and that he may cut prices again. Volkswagen saw electric sales fall by 50% in Europe. Ford has shelved its $16 billion investment because Americans are more cautious than expected. Honda and American General Motors (GM) have ended their $7 billion “cheap” electric car project.
Critical and Strategic Minerals
Prices for minerals used in electric car batteries have fallen sharply in recent months. However, according to InsideEVs magazine, the 67% decline in lithium and 20% in cobalt is a very bad sign. “If demand drops, they will [les fabricants] Buy fewer raw materials. And producers are lowering their prices to bring more raw materials to market. “Ultimately, prices fall because manufacturers produce less,” the media analyzed.