Is The Next Motor Industry Crisis On The Horizon?

Tue 17th May 2022

A global pandemic, factory lockdowns, Brexit supply-chain issues and microchip shortages, the motor industry has endured some hard times over the last few years, and now a leading executive has predicted more turbulence ahead.

Carlos Tavares, chief executive of Stellantis, the group which builds Peugeot, Vauxhall, Fiat and Jeep cars, has said that the boom in electric cars is likely to lead to a shortage of batteries for production.

Tavares says that though there are planned gigafactories planned at a number of sites across Europe, demand will far outstrip supply and the industry will face a bottleneck. Stellantis are planning on selling EV vehicles only by 2030, in line with the UK government’s ban on petrol and diesel vehicles.

Speaking at a Financial Times car industry summit, Tavares said: “I can anticipate that we will have around 2025, 2026, a short supply of batteries, and if there is no short supply of batteries then there will be a significant dependence of the western world vis-a-vis Asia.

“That’s something that we can easily anticipate. The speed at which everybody is building manufacturing capacity for batteries is possibly on the edge to be able to support the fast-changing markets in which we are operating.”

While the Stellantis brands are now on course to move to electric, Tavares has previously warned that the government’s hard stance may jeopardise production in the UK, with Vauxhall’s Ellesmere Port factory at the heart of heated negotiations last year. 

In the same summit, the Stellantis boss also suggested that the increased demand for the minerals required to build the batteries could lead to some tricky political negotiations.

“We may not like the way that those materials are going to be sourced in a few years,” he said.