E-mobility puts pressure on OEMs, suppliers to bet big

NOVI, Mich.—Change is always on the horizon, but it seems the automotive industry's horizon is quickly approaching.

Electric vehicles, ride sharing apps and government regulations are driving automotive original equipment manufacturers to make sizable bets on E-mobility, and that in turn is causing massive ripple effects throughout the supply chain, according to one speaker at the Plastics and Rubber in Automotive conference held recently in Novi.

"There are an overwhelming number of changes coming through the pipe into our industry driven in many parts by E-mobility," Ian Macpherson, Afton Chemical Corp.'s North America driveline marketing director, said during his presentation. "The winds really are changing in our industry. From a technology perspective, there are all kinds of initiatives."

OEMs already have disclosed big plans, which include:

• GM said it will introduce a new all-electric vehicle platform and 20 all-electric models by 2023;
• Ford is investing $11 billion to introduce 40 new electrified vehicles, including 16 battery electric vehicles by 2022;
• FCA claims 50 percent of its lineup will feature some form of electrification by 2022;
• Volvo plans to sell 1 million electrified cars by 2025 and offer some form of electrification by 2021, including three all new battery electric models;
• VW plans to bring 80 new electrified vehicles to customers by 2025 and offer customers at least one electrified version of every model across the company by 2030; and
• Toyota will electrify its entire lineup by 2025, either hybrid or full electric, with 10 purely battery-powered vehicles after 2020.

"The OEMs have been making some really big statements and changes to their organizations," Macpherson said. "It seems every week we see a new headline or some pronouncement about the number of electric vehicles they're going to be producing in the future."

Emissions driving change

Fuel economy is the major factor driving these investments, Macpherson said, as governments look to regulate greenhouse gas emissions—some drastically attempting to do away with the internal combustion engine within the next 20-25 years.

But there are major hurdles to these electric platforms, one being the infrastructure. Macpherson said the number of charging stations, the amount of time it takes to charge vehicles and the available lithium all are significant considerations that need to be accounted for before electric vehicles can gain mass consumer appeal.

Disposal of lithium-ion batteries must also be factored into the equation. Macpherson said this will pose a significant challenge for the industry, citing statistics that show for every $1 spent companies would get about 30 cents worth of recycled lithium. One idea is to take batteries from automotive and use them in the housing market.

Range anxiety is another hurdle for consumers as right now there are not enough charging stations to reliably make a long trip in a battery-operated electric vehicle. Macpherson said if charging stations are added, that will put a burden on an already strained electric grid, which in turn will need to be upgraded to handle the additional usage.

"Because of all these barriers, the use of battery-operated vehicles is believed to be somewhat moderated moving forward," Macpherson said. "The forecasters are certainly tempering their enthusiasm, whereas the hybrid vehicle is certainly one that a lot of folks are united in believing is going to be the larger volume type of vehicle moving forward."

ICE freeze-out overstated

Macpherson said the internal combustion engine will remain a significant factor for the foreseeable future, and most likely beyond.

The technological advancements in current ICE and diesel models have been significant—turbocharged engines are becoming standard, efficiencies are getting better and transmissions more efficient, according to Macpherson.

He said by 2045 roughly three quarters will have electronic engines, but three quarters also will have internal combustion engines because about half of the vehicles on the road will be hybrids, which Macpherson said has the potential to grow significantly during the next 25 years.

"There have been many forecasts in terms of what the world is going to look like in the future," Macpherson said. "While the number of total vehicles will grow dramatically, electric vehicles are just a part of that growth. Hybrid and conventional vehicles will continue to grow, and both contain an internal combustion engine."

He added that while governments have made some bold statements, he is not putting too much stock in them because most have yet to show a feasible plan of how they're going to ban the sale of gasoline and diesel vehicles.

However, he said one place where electrification makes a little more sense is in cities where the air quality is a concern, such as in Shanghai and other parts of China. Macpherson added that the Chinese government can take that kind of drastic action and put the infrastructure in place in a relatively short time.

China also controls a large portion of the world's lithium supply, and according to Macpherson that makes the country a key player as electric vehicles begin to take more market share.

"People are keeping a very close eye on China in terms of E-mobility," Macpherson said. "They're thinking that this is the kind of place where this could take off."