Electric vehicles are a-comin'. We know it and have said it ad nauseam at this point. But automakers aren't so keen on the idea of being persuaded into the transition with the threat of fines, especially over in Europe, where a 2035 deadline to end internal combustion is looming.
Welcome back to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we're chatting about Europe entering freakout mode over EVs, Italy's bold words about the European Union's ICE ban aimed for 2035, and BMW and Redwood Materials' partnership for EV battery recycling. Let's jump in.
30%: Europe Has Entered EV Freakout Mode
European automakers are panicking. No, I'm not talking about Volkswagen's fear of plant closures or the various OEMs quietly baking out on their commitment to electrification. It's all about impending carbon targets that begin as early as 2025 and could result in multi-billion dollar fines if they aren't met. The EU is cracking down harder than ever on pollution from ICE vehicles.
This has sent the industry across the pond spiraling, into a full-blown freakout, even, and the companies are making their concerns heard loud and clear. With the clock ticking, major OEMs are calling on policymakers to pump the brakes and explore more pragmatic options to address the struggles and speed bumps found with the cooling market.
An industry trade group, the European Automobile Manufacturers' Association (ACEA), recently called for relief on behalf of automakers. Renault CEO Luca de Meo, who is also the president of the ACEA, says that stricter rules could result in either the production of 2 million European cars to be halted or nearly $17 billion in fines being handed out across the industry.
A letter published by the association last week even described the situation as a "crisis" that is caused by low consumer demand and unfair competition from "third country EV manufacturers." In other words, China.
They're looking out further than that, too—out to 2035 where an impending deadline from the European Union will put a stop to the sale of new combustion engine vehicles across the bloc.
The 2035 ban, in case you forgot, is the EU's rather ambitious plan to stop the sale of most new gas and diesel vehicles, effectively forcing carmakers to adopt electrification as the primary means of propulsion. It's a small piece of the partnership's goal to cut greenhouse gas emissions by 55% by 2030 (and accompanying plans to phase out coal use by 2030 and certain oil uses by 2040). Sounds like an ideal move for greener pastures, but automakers are forecasting that it's not that simple.
Industry heavyweights haven't held back either. The lot have critiqued the impending rules, with BMW, Stellantis and Volkswagen among those throwing punches at the infantile state of the charging infrastructure and supply chain.
Charging stations? Not enough. Battery materials? Still mainly sourced from China. Cost? Unfathomable. Meeting short and long-term targets are feeling like a Herculean task.
From the climate side of things, it's easy to recognize that the EU's goals are noble. The problem is, and automakers have echoed this, that the rapid transition to EVs is outpacing the reality on the ground. That's why they're asking (or begging at this point) for more flexibility to avoid threats of economic fallout.
Until then, the industry is stuck between a rock and a hard place. The future is electric, we know that. But without the infrastructure and supply chain to support it, automakers could be facing some heavy financial repercussions that somebody, like the customer, will have to foot the bill for. The question is: will the EU listen?
One thing is for sure: it's going to be a wild ride to 2035.
60%: Italy Calls EU's ICE Ban "Self-Destructive"
It's not just carmakers slamming the 2035 combustion car ban, either. There's some serious pushback on the EU's plans from member countries as well. Italy in particular is the latest to throw fuel onto the fire as its Prime Minister Giorgia Meloni didn't even bother to mince words when she called the plan "self-destructive" during a meeting in Rome.
Her beef? Well, it turns out that Italy relies on cars a lot more than people might realize. Things with four wheels are deeply ingrained into Italy's culture and identity—and that means its economy, too. Meloni warns that banning gas-powered cars could have some pretty serious ramifications for Italy that the EU if it becomes enforced:
"The ban on endothermic engine [cars] from 2035 is one of the most obvious examples of a self-destructive approach," Meloni said, according to Reuters. "Accompanying the industrial sector in the challenge of ecological transition cannot mean dismantling entire sectors."
The industrial sector that Meloni refers to is, of course, Italy's second-largest group of exports: vehicles.
Not just any vehicles, either. Italy is known for its iconic exotic rides—think Ferrari, Maserati and Lamborghini. Cars that you and I associate with huge displacement V12s driven by rich dudes wearing aviators and ascots. It's not just an export for the country, it's a passion.
Italy's carmakers haven't been shy about their desire to shun away from electrification. Even Ferrari seemed to shun away from battery-electric before tech mogul Benedetto Vigna was tasked with restructuring the company for the future when he became CEO in 2021. The automakers are still electrifying their rides though—even Ferrari—despite pushing for exemptions in the EU's ban for combustion cars powered by synthetic fuels. But Vigna did call it an "arrogant" move to dictate what customers can and cannot buy. Clearly, Italy's car market isn't all-in on EVs.
There are some economic challenges at play too. The bespoke exotic car industry is linked to a lot of small and local companies in the supply chain. This means potentially eliminating jobs that rely on combustion motors as the world shifts to electrification. That's the self-destruction Meloni is referring to—the foreseen economic ramifications.
Despite Italy's objections, the EU isn't likely to back down from its plan. It does highlight the more pressing economic challenges that the bloc's member countries—Italy and Germany being two that may be largely affected—could face. So, sure, the future is still electric, but the road to get there may be increasingly more bumpy along the way.
90%: BMW Teams Up With Redwood to Recycle Old EV Batteries
Do you know where used EV batteries go to retire? Well, it's not Florida, I can tell you that. But it might be South Carolina thanks to a new partnership between BMW and Redwood Materials—the battery recycling firm founded by former Tesla CTO JB Straubel in 2017.
Redwood and BMW announced their partnership to spruce up the EV supply chain (which, remember, exists from cradle to grave) by ensuring that washed-up batteries don't end up in some landfill. Instead, the two will work to reclaim all the precious metals from battery husks, giving new life to lithium, cobalt, and nickel by feeding them back into the supply chain, effectively creating a circular cradle-to-cradle lifecycle.
The problem that this partnership with Redwood is looking to solve is one that most OEMs haven't cared to plan for: recycling batteries. After the EV rolls off the production line, it becomes someone else's problem, and that just isn't sustainable. So BMW's extensive network of 700 different locations will now be sending batteries from various brands under its umbrella—BMW, Mini, Rolls Royce, and even its Motorrad electric motorcycles—to Redwood.
As for the process of reclaiming battery materials, well, it's kind of like a high-tech version of "reduce, reuse, recycle," but with a lot more wizardry involved.
When it reaches the recycler, a battery is dismantled, shredded, and sorted into what the industry knows as "black mass." This is really just a pile of valuable metals from within the batteries but still needs some extra steps to extract the materials within. Redwood uses a combination of pyrometallurgy (“pyro”) and hydrometallurgy (“hydro”) to reclaim these materials. Pyro works by superheating the pile to around 1,500 degrees Celsius to burn off graphite and solvents (which reclaims cobalt, copper, and nickel well), and hydro uses less energy to record other materials (like lithium) more efficiently.
In case you aren't convinced that there's a need for recycling, know that Redwood’s processes cut energy use by 80%, reduce CO2 emissions by 70%, and slash water consumption by 80% when compared to conventional mining or recycling. It's a pretty big deal considering the environmental impact that extracting minerals for EVs take on the planet.
Redwood's second campus is currently setting up shop in Charleston, South Carolina. That's right in BMW's manufacturing backyard considering that it builds in nearby Spartanburg and Woodruff. And with six EVs planned between both plants, it's fair to say that this new spot will have a bit of a geographical advantage.
100%: Are We Moving Too Quickly?
The cracks are also starting to show—battery material sourcing concerns, inadequate charging infrastructure, the loss of manufacturing jobs. All of these are valid concerns that many countries haven't yet addressed without kicking the can down the road on another issue. Meanwhile, the public is still expecting some tidal wave of EVs to come crashing down on dealer lots over the next decade, even if many are still primarily purchasing gas-powered cars.
So which is it—are we moving too quickly, or right on pace?
