May 26, 2022: -Stellantis CEO Carlos Tavares said he is expecting shortages of the batteries and raw materials needed to make electric vehicles in the upcoming years as the international automotive industry pivots to EVs to meet an anticipated increase in consumer demand and government regulations.
Tavares added that he expects a shortage of EV batteries by 2024-2025, after a lack of raw materials for the vehicles that will lessen the availability and adoption of EVs by the year 2027-2028.
“The speed at which we are trying to move all together for the right reason, fixing the global warming issue, is so high that the supply chain and the production capacities do not have time to adjust,” he told media after the company made an announcement a recent $2.5 billion EV battery plant in Indiana.
Stellantis, the fourth-biggest carmaker globally, was formed by the merger of Fiat Chrysler and France-based Groupe PSA in the previous year.
Tavares used the shortage prospect to encourage policymakers globally to stop moving the targets for EVs forward so aggressively.
European regulators have been among the most aggressive in implementing new EV regulations. Those in the U.K announced plans to restrict the sale of vehicles with traditional internal combustion engines by 2030, sooner than the previous target date of 2040. In the previous year, the Biden administration announced a target for half of all vehicles in the U.S. to be EVs by this decade.
“All the car companies now, at least the best ones, are now full speed ahead; in full execution mode, going as fast as possible,” Tavares said. “The only thing that helps to deliver is stability. Stop playing with the rules. Leave the rules as they are and let people work properly.”
Tavares expects a bottleneck in batteries first, as more EV production plants come online. He also looks forward to those facilities creating a shortage of raw materials for the vehicles. Such shortages have been a focus of Wall Street analysts when they rate and predict the automakers regarding their ability to market EVs.
Tavares has warned of such a shortage in the past, but it’s the most detailed.
“The point is when we want to move too fast with a big magnitude, and there are not enough feasibility studies, we may be bumping on this kind of stuff,” Tavares said. “You’ll see that the electrification path, which is a very ambitious one, will bump on the supply side in a time window that the administrations have set,” Tavares added.