23 Apr 19

Order your electric car now – or face increasing lead times

Supply issues are affecting the production volumes of EVs across the globe as Asian battery makers are playing hardball with their automotive customers in America and Europe.

LG Chem and Panasonic are reportedly increasing the pressure on Audi and Tesla, respectively, which have little choice but to accept price increases to keep the supply going. As EV sales increasing and battery supply is in jeopardy, fleet customers may have to fight to get their hands on an EV.

Today, the Asians are calling the shots on the battery market. No independent Western supplier is to be found yet – Northvolt, for instance, will not be operational before 2020 and even then, it will only produce 8GWh-worth of batteries – a quarter of its projected capacity and not nearly enough to cover the need.

Less Audi e-trons

Several media have been reporting that Audi can’t get enough battery packs for its e-tron, leading to lower than initially planned production volumes. The Audi factory in Brussels, Belgium – the only place in the world where the e-tron is built – will reportedly be outputting 10,000 fewer units than planned this year.

LG Chem is allegedly unwilling to honour Audi’s battery order and has supposedly cut production at its factory in Kobierzyce, Poland, from eight hours a day to six in reaction to Volkswagen's decision to set up battery factories with other suppliers.

Battery supply hiccoughs could also affect the launch of VW’s I.D. sub brand next year as well as the Seat El Born.  

Tesla in an argument with Panasonic

In the USA, Tesla is not on speaking terms with its battery partner from the first hour, Panasonic. They have both invested in the Gigafactory in Nevada, where Panasonic produces cylindrical lithium-ion cells that Tesla buys and assembles into battery packs for its Model 3. Today, the factory produces 24 GWh of battery cells per year, but Tesla needs 35 GWh to reach its 400,000 Model 3 per annum target.

Two weeks ago, Panasonic said it was freezing its expansion plans, according to analysts in response to slow Tesla sales. Another explanation is that Panasonic is unhappy about Tesla’s building another Gigafactory in Shanghai, for which it is in talks with several Chinese suppliers, including CATL – the world’s biggest battery maker.

Supply of electric models in jeopardy

It’s not just Audi and Tesla that are facing battery cell supply issues. Hyundai can’t build enough Kona and Ioniq Electrics, just like Kia is struggling to get more e-Niros on the road as lead times reach one year or more, depending on the market. The VW e-Up and e-Golf are equally in short supply.

Interestingly, BMW and Nissan can ship you an i3 and a Leaf in just a few months. They seem to have secured sufficient supply with their battery partners. A Jaguar I-Pace might still make it to your garage before the end of the year if you order it now.

We would not advise you to wait much longer, though. With EV sales increasing, demand is likely to rapidly outstrip whichever supply is left in 2019.

In any case, by 2020, all OEMs that sell vehicles in the EU need to get their electric act together to meet the 95 g/km target. If they don't, they will face billions of euros in fines.


Authored by: Dieter Quartier