North America’s Electric Vehicle Supply Chain

Many governments around the world have taken a stance on moving away from fossil fuels to green energy, with electric vehicles (EVs) gaining more and more popularity. 

The new US administration has made clear that it doesn’t want to fall behind in the EV race, with President Joe Biden making a flurry of announcements to push the industry forward since taking office — including a potential partnership with Canada for essential raw materials.

But North America’s EV industry is lagging behind other regions, even though Elon Musk’s Tesla (NASDAQ:TSLA) has been a pioneer in the US, providing high-end offerings for quite some time.

In the first four months of 2021, passenger and light-duty EV sales totaled just 180,000 in the US and Canada — 166,000 in the US and 14,000 in Canada — versus 677,000 in China, as per Rho Motion.

When looking at the entire EV supply chain for any region, taking ownership of every step seems to be equally important, but it is becoming increasingly clear that governments and automakers are moving to have further control upstream. To reduce costs and improve security, among other reasons, the buildout of battery megafactories around the world is picking up pace.

At present, Benchmark Mineral Intelligence is tracking 211 lithium-ion battery megafactories, but only 12 are in the US, while 156 are in China and 22 are in Europe. According to the firm, China is building a battery megafactory at the rate of one every week compared to the US at one every four months.

High-nickel cathode chemistries, like nickel-cobalt-aluminum and nickel-cobalt-manganese-aluminum, will be North American megafactories’ first choice, as they will be transferred to EVs with a longer range, according to Roskill. That said, the firm believes cathode chemistries will continue to be diversified.

The US has already made clear that it must work with allies, including Canada and Australia, to secure the minerals needed for EVs. With its sights on processing raw materials domestically, the White House has released a strategy that includes new funding to expand international investments in battery metals projects and new efforts to increase supply from recycling batteries.

Click through the articles listed for an overview of what investors should know about North America’s efforts to build out its EV supply chain, from securing supply of raw materials to vehicle production.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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