Everything is riding on Tesla’s long-hyped 4680 batteries, Nissan is having trouble scaling up Ariya production, and Ford just laid off 1,100 employees, this time in Spain. All that and more in this Friday edition of The Morning Shift for March 10, 2023.
1st Gear: Batteries Are Everything
Tesla won’t be able to meet Elon Musk’s lofty production goals without delivering on the promise of its 4680 cell design, initially targeted to reach high-volume production by 2022 and touted to bring benefits in cost, size, and efficiency. The latest from Reuters on Friday delved into the various companies working alongside the EV maker to help it reach its objectives. In short, everyone’s involved and Tesla’s got many contingencies in place:
Tesla has tapped China’s Ningbo Ronbay New Energy and Suzhou Dongshan Precision Manufacturing to help trim materials costs as it ramps up production of 4680 battery cells in the United States, according to the sources, who asked not to be named. [...]
As part of its efforts, Tesla also has signed a deal with Korea’s L&F Co to supply high-nickel cathodes that could increase the energy density of its 4680 cells, one of the sources said.
The automaker aims to augment its own output with 4680 cells from Korea’s LG Energy Solution and Japan’s Panasonic - an insurance policy to secure future EV production, two of the sources said. LG and Panasonic are expected to supply cells for Cybertruck, one of the sources said.
The challenge at the moment, according to the story, is that Tesla is still working the kinks out of its cathode dry-coating process. I am not an engineer so I have pretty much zero insight as to what that means, but the upshot is that the company can’t yet produce the cells with the yields it requires, which is probably at least one of the issues holding the Cybertruck back.
The automaker so far has been able to dry-coat the anode - the negative electrode - but is still having issues with dry-coating the cathode, where the most significant gains are expected to be made, the sources said.
Tesla’s attempt to ramp up production of the dry coating process has thus far resulted in enough batteries only for about 50,000 vehicles annually, Musk and company executives have said.
In 2020, Musk said Tesla would have enough 4680 capacity in-house to supply 1.3 million Model Ys.
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Still, analysts believe 2023 will be the year of the 4680 cell, and Tesla will be able to increase output of the batteries five times before the year is out. If you’re a Tesla fan dismayed at all the waiting though, do know that you can order a 1:1, 3D-printed replica off Etsy right now. According to the seller, the model is intended “for display, prototyping, and starting conversations about one of the most prolific engineering powerhouses of our time; Tesla.” An average 4.8-star review and some 320 happy customers can’t be wrong!
2nd Gear: The Ariya Can’t Catch a Break
Nissan needs its Ariya electric SUV to be a hit, but it can’t be if the company isn’t able to build enough of the things. That seems to be the problem, according to another Reuters exclusive:
Ariya production has been slowed by problems with the highly automated “intelligent factory” manufacturing system it built for the model at its plant in Tochigi, north of Tokyo, two of the people said.
Nissan designed a system that would allow it to produce cars with different powertrains - batteries, hybrids and internal combustion engines - on the same line.
Implementation has proved “an extremely, extremely high challenge” and the advanced paint line has become a persistent headache, one of the people said.
Nissan also faces shortages of plating for an electronic component for the Ariya after a fire at China-based supplier Wuxi Welnew Micro-Electronic in January, one of the people said. The supplier told Reuters it had shifted output to a second plant and was “working to recover production.”
In a statement to Reuters, Nissan said Ariya production had faced challenges including supply of semiconductors, disruptions in components shipments and the factory’s paint line. “Nissan is making a full and diligent effort to fully regain production capacity at the plant,” the company said.
At the moment, these issues have rendered Ariya manufacturing at a third of Nissan’s 400-a-day target on average. Some of them — namely the semiconductor woes — are of course unavoidable, but maybe Nissan didn’t have to reinvent production-line painting in tandem with launching its most important model in ages. Maybe it could’ve made this just a little easier on itself.
3rd Gear: Mitsubishi Electric
In terms of volume, Southeast Asia and Oceania is really important to Mitsubishi. Those regions are volume drivers for the brand. North America, on the other hand, is where it can take a bit of a punt on higher-end vehicles. Buoyed by the relative success of the Outlander, the automaker will focus its growth on these shored by expanding its electrified lineup. One of those might even take the form of an electric pickup. From Automotive News:
The sweeping roadmap focused heavily on electrification but included a slew of business targets in including a global sales goal of 1.1 million vehicles for the fiscal year ending March 31, 2026.
That goal is up from an expected 866,000 units this fiscal year. But the target still doesn’t quite build back to Mitsubishi Motor Corp.’s pre-pandemic worldwide volume of 1.127 million vehicles.
[CEO Takao] Kato’s electrification plan calls for investing between 1.4 trillion and 1.8 trillion yen ($10.26 billion to $13.19 billion) in R&D and facilities for electrification through 2030.
That will partly fund the rollout of nine new electrified models, including battery-electrics, hybrids and plug-in hybrids, over the next five years. They will be part of a global rollout plan for 16 models overall, including traditional internal combustion vehicles.
“Under the new midterm plan, we will consistently make more investment in r&d and capital expenditure in response to the upcoming era of transformation,” Kato said.
Among the electrified vehicles previewed by Kato were a full electric pickup truck, a two-row all-electric SUV, a two-row hybrid SUV and hybrid versions of its Xpander and another MPV nameplate. It also envisions electrified versions of the Outlander Sport and Colt.
A new Mitsubishi pickup would be the coolest, and might actually work out well for the brand if it serves the more compact or midsize realm — an arena just about everyone in the business of making electric trucks is ignoring, because there’s less money in it. Mitsubishi just needs to hit singles right now, though, not home runs.
4th Gear: Ford Keeps Downsizing in Europe
Weeks after eliminating 3,800 jobs primarily in Germany and the U.K., Ford announced Friday that it will also cut 1,100 positions at its Valencia plant, where the S-Max and Galaxy vans are winding down production. From Automotive News Europe:
“Ford will work constructively with its union partners to reduce the impact of the separations on employees, their families, and the local community,” the spokesperson said.
Ford is ending production of the S-Max and Galaxy minivans built in Valencia in April as it shifts its passenger car lineup to SUVs and electric cars.
Output of the Mondeo midsize car in Valencia has already ended.
In February Ford said it will cut 3,800 product development and administration jobs in Europe, mostly in Germany and the UK. It cited rising costs and the need for fewer workers to build EVs as the reason for the jobs cull.
Ford will unveil a new all-electric vehicle for Europe on March 21. It will be built at the automaker’s factory in Cologne, Germany, on Volkswagen Group’s MEB platform will be unveiled on March 21.
The EV will replace production of the Fiesta small car in Cologne. Ford will end production of the Focus compact car in Saarlouis, Germany in 2025. The company is looking for a buyer for the Saarlouis factory.
Everything is changing for Ford on the opposite side of the Atlantic. You’d think that would give it every reason to shore up staff, but that’s unfortunately never how this works.
5th Gear: VinFast Needs Another Year
VinFast hoped to begin trial production in 2024 at its North Carolina plant that doesn’t exist yet and is still awaiting permits. The company has now seemingly realized — at least a year, maybe a year and a half before that unnecessarily prompt deadline — that that’s probably not going to happen. So now it’s thinking more like 2025. From Bloomberg:
An updated filing for VinFast’s planned US initial public offering released Friday however said that commissioning of the facility is targeted for 2025.
“Pre-construction work for phase one commenced in the third quarter of 2022, with commissioning targeted for 2025,” the filing said. “Phase one of the facility is expected to have an initial capacity of 150,000 vehicles a year” rising to 250,000 cars upon completion of phase two.
Tesla Inc.’s factory in China, by way of comparison, pumps out around 70,000 cars a month.
VinFast said to Bloomberg News that the delay was because “we need more time to complete administrative procedures.”
That delayed timeline also means VinFast won’t be able to take advantage of tax credits provided for under President Joe Biden’s Inflation Reduction Act. The IRA EV tax credits are only eligible for electric cars that are made in the US. Currently, VinFast is making its electric cars at a factory north of Hanoi and putting them on a ship.
VinFast also lost $2.1 billion in 2022, up from $800 million in 2021. I don’t know what universe VinFast exists in where it can lose obscene amounts of money, never have anything to show for its trouble, and yet still set the most unrealistic turnaround goals imaginable, but this is the road it’s chosen.
Reverse: Looking for Water
On this day in 2006 — 17 years ago — NASA’s Mars Reconnaissance Orbiter (MRO) entered the planet’s orbit in search of the wet stuff. To this day it still circles Mars, “having found ice and possible flowing salty water” on the planet, per Wikipedia. In terms of length of service, it’s second only to 2001 Mars Odyssey, which will likely continue functioning until 2025. NASA expects MRO to continue its mission beyond the end of this decade.
On the Radio: David Bowie — “Looking for Water”
Maybe the worst album art ever, but it was 2003. What do you want? I promise the song’s worth listening to.