Automakers partner with mines as electric cars rely on raw materials for batteries
LEILA FADEL, HOST:
Do these high gas prices have you thinking about buying an electric car? Automakers would love to sell you one. They're betting their futures on it. But this big transition depends on mining, digging a lot of stuff out of the ground, minerals like lithium, nickel and cobalt that go into those giant batteries. As NPR's Camila Domonoske reports, this existential challenge is remaking the auto industry.
CAMILA DOMONOSKE, BYLINE: When automakers want, say, a steel part, they don't call up an iron mine. They call up a supplier, who calls their supplier, who calls their supplier. But as automakers stake hundreds of billions of dollars on battery-powered cars, they can't be sure the supply chain will deliver what they need. For instance, they'll need more lithium than the world even makes right now.
ERIC NORRIS: You can't just go and secure supply 'cause it doesn't exist for the future. It has to be built.
DOMONOSKE: Eric Norris is an executive at a major lithium producer called Albemarle. Over the last year or so, his company started getting calls from automakers, which never used to happen.
NORRIS: We went from, who is Albemarle? - to, we need to be partnered with Albemarle.
DOMONOSKE: It's not just Albemarle. It's everywhere - GM investing in a California mine, BMW buying lithium from an Australian mine, Volkswagen signing contracts with a German one. Companies are still focused on putting parts together with robots and assembly lines, like this.
(SOUNDBITE OF ASSEMBLY LINE AMBIENCE)
DOMONOSKE: But now they're also thinking about raw materials, like this...
(SOUNDBITE OF PUMPING WATER)
DOMONOSKE: ...The lithium-rich water that Albemarle is pumping in Chile. And to help wrap your head around the change that's happening here, it might help to think about...
(SOUNDBITE OF ICE CREAM TRUCK JINGLE)
DOMONOSKE: ...Ice cream. You could buy a scoop from a truck or a tub at a supermarket. Or you could buy milk and make your own ice cream if you wanted to get more involved. But an automaker ordering minerals directly from Albemarle - that would be like calling up a farmer to order up a cow because you want ice cream next year. It's way more work. Like a lot of things about electric vehicles, Tesla led the way. They've talked to mines for years. Vivas Kumar used to work at Tesla, sourcing battery materials.
VIVAS KUMAR: It was a matter of survival to get reliable, consistent supply of the materials used to make battery cells that go into the vehicles.
DOMONOSKE: Now every automaker sees this as a matter of survival. Raw materials could determine how many electric vehicles they can make at what cost. Scott Keogh is the CEO of Volkswagen of America. He says this moment is transformative, but it's also kind of a throwback.
SCOTT KEOGH: The historical automotive business was deeply integrated. You would have rubber plants in Brazil and steel manufacturing plants, and you had all of this on your books.
DOMONOSKE: But the modern auto industry was pushed by investors to split up and just buy rubber and steel from suppliers. To use the ice cream metaphor, why own the cow when you can buy the milk for cheap?
KEOGH: And that's been the story for the last three decades, four decades.
DOMONOSKE: Now the industry is going in reverse, not just on lithium but on a range of mined goods that go into batteries.
KEOGH: We are not going to become a mining company. But certainly, we will get significantly closer.
DOMONOSKE: This shift could shake up the mining industry. From child labor in the Congo to pollution and deadly accidents around the world, an anonymous mine can often shrug off a bad reputation. But automakers care a lot about what the public thinks about them. Aimee Boulanger is with the Initiative for Responsible Mining Assurance. She says automakers are pushing mines for more transparency and audits of their practices. She compared it to the way activism over blood diamonds helped reform mines, except bigger.
AIMEE BOULANGER: When the auto sector came in, they changed everything because the volume of what they buy is so different than all the others. That was the moment.
DOMONOSKE: Meanwhile, for automakers, getting involved so early in the supply chain is expensive, and it carries some risks. But with their futures riding on electric vehicles, companies say they can't afford not to dig into mining.
Camila Domonoske, NPR News.
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