American Electric Vehicle Manufacturers Are Making Their Cars Weaker So More People Will Buy Them

by John Hugh DeMastri

 

In a bid to make electric vehicle (EV) prices more affordable, carmakers are switching to iron-based batteries that are weaker and more reliant on Chinese supply chains, The Wall Street Journal reported Tuesday.

Transitioning to lithium-iron-phosphate (LFP) battery cells ultimately reduces the effective range of electric vehicles compared to more advanced cobalt and nickel-based cells, according to the WSJ. LFP cells, which are roughly 30% cheaper than their more effective counterparts, are more reliant on Chinese supplies, limiting carmakers’ ability to access tax breaks and other subsidies offered under the Inflation Reduction Act.

“All the I.P. is in China,” said CEO Jim Farley of Ford in October, according to the WSJ. While it is possible that Ford might produce such batteries in the U.S., it intends to import from China in the near future, even as LFPs become a cornerstone of the company’s efforts to produce cheaper electric vehicles.

Car makers originally expected that LFP cells would be used in cars targeting Chinese markets, where cities are denser than their European and North American counterparts, since their reduced effective range is less of a drawback in those environments, the WSJ reported. However, nickel and cobalt prices became more expensive as their major suppliers, Russia and Congo respectively, became increasingly unpalatable to western car makers following Russia’s invasion of Ukraine and concerns of human-rights abuses in Congolese cobalt mines.

These heightened rates forced suppliers to make rapid adjustments to supply chains and production cycles in an industry where producers often lay out plans years in advance, according to the WSJ. The projected market share of LFPs shot up from roughly 15% to 40% following this years’ developments, the WSJ reported, citing equity analyst and global EV battery research head at UBS, Tim Bush.

In late August, California passed a law forbidding the sale of gas-powered vehicles in the state after 2035, followed immediately by Washington state, which has a law that allows its state Department of Ecology to mirror California’s emissions standards. Car makers have been investing billions in battery cell production facilities since the passage of the Inflation Reduction Act, which grants subsidies to companies producing electric vehicle battery cells and other green products in the U.S.

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John Hugh DeMastri is a reporter at Daily Caller News Foundation.
Photo “Siemens Automation in Volkswagen Factory” by . Julia.Roesler. CC BY-SA 4.0.

 

 

 


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