Disasters can often lead to better plans for the future.
To say that COVID-19 is a significant disruption across the globe would be a severe understatement. In the U.S., we quickly went from what was presented as little concern, to schools closing for a few weeks in a few states, to nearly everything being shut down in most areas. While this is causing major issues at present, it could lead to future plans that will revamp and improve business, industry, manufacturing, etc. in markets across the globe.
Our friend Sean Mitchell points out that regardless of the availability or price of gas, traditional automakers will still be making gas-powered cars. Whether or not people will buy them if gas prices soar is another story. On the flip side, EV makers – as well as legacy OEMs that are now producing electric cars – are entirely reliant on the raw materials needed to make batteries, the overall availability of batteries, and the cost of the technology itself.
With that said, the current system is not really working. Much of the world's battery and electric vehicle supply chain is dominated by China. As a result of this, raw materials are shipped all around the world. This process is expensive, it has a heavy carbon footprint, and it's not in the best interest of automakers. This is especially true in the midst of a global pandemic.
The light at the end of the tunnel here is that companies like Tesla are working to decentralize the situation and source battery materials domestically. While this will all take time to come to fruition, it could mean that automakers will be in a better position when it comes to sourcing raw materials for batteries, producing batteries "in-house," and reducing cost and carbon footprint.
Check out Mitchell's video for a much better explanation of the situation as he presents it. Then, let us know your thoughts in the comment section below.
Video Description via Sean Mitchell (All Things EV) on YouTube:
Coronavirus will accelerate global EV production
United States sets sights on China in new electric vehicle push: https://www.reuters.com/article/us-us...
Piedmont Lithium: https://www.piedmontlithium.com/opera...