Can the market size of the auto industry be fast enough?

The rapid spread of electric vehicles may change the automotive ecosystem and promote greater innovation. To do this, we now need to pay attention to two top priorities. 

Deal with construction problems.If global demand for electric vehicles grows as expected, the industry will need 200 new gigabit plants by 2030-plus the existing 130 gigabit plants, equivalent to more than $400 billion in deployment capital. Many new facilities may be built near original equipment manufacturers to reduce lead times and inventory requirements. In addition, the cost of batteries per vehicle may exceed $7000, so the pipeline inventory value of batteries shipped internationally will be very high. However, the complexity of the design and construction phases may delay the start of production by 12 months or more. Giant factory operators may avoid some common problems by stepping up the recruitment of construction talent, preferably at the site planning stage or earlier. The most difficult positions to fill, such as those related to electrical or mechanical manual labor, require the most attention. Operators of mega-factories may also benefit from early attention to local design standards and regulatory concerns, such as wastewater, as well as the use of local industrial base suppliers, who can provide on-site support and respond more quickly to quality and production challenges. Improve operational efficiency.After a giant factory was built and put into operation, the challenge did not disappear. Production in many new factories is lower than expected due to persistent labor shortages, unexpected machine outages and operational problems. For battery makers and the original equipment manufacturers they supply, the consequences of lost production can be huge. If a 50-gigawatt-hour power plant achieves only 66% of its planned annual output, it could lose about $500 million a year, converting 6% of simulated profits into a potential 8% loss. Downstream OEMs are likely to experience a supply crunch, forcing them to cut car production or close factories temporarily. Since 2017, several well-known OEM companies have had to suspend production due to battery supply disruptions, although production is well


Post time: Aug-26-2022