The vitality of the U.S. auto industry hinges on two important sets of relationships: automakers and suppliers, and federal Republicans and Democrats.
For more than a century, automaker and supplier purchasing decisions have been driven by twin considerations — price and quality — and rife with transactional relationships. The shift to electric vehicles requires a reset of automaker-supplier relationships, trading today's neat-and-tidy transactions for long-term cooperation extending from the mouth of a mine to a recycling plant decades later.
Trade groups, including the Alliance for Automotive Innovation, are trying to map out a sustainable future for a North American EV supply network. They are doing so under the Inflation Reduction Act, which heavily favors localized sourcing and production.
"We have to get supply chains right, just as we have to get infrastructure right," John Bozzella, CEO of the association, told Automotive News. Infrastructure for EVs can largely be solved by throwing money at the problem, but sustainable supply networks will require more creativity.
When the dust clears from this week's midterm elections, regardless of which party controls the House or Senate, cooperation on China is essential — thankfully, challenges from China seem to be one of the few remaining areas where Republicans and Democrats are willing to work together.
Already the world's largest auto market, China is further along in its EV transition, and its supply chains have locked up several key minerals required for battery production. North American suppliers are scrambling to find exploitable deposits of minerals, including cobalt and lithium. This is not an insurmountable problem, especially with help from mineral-rich Canada and Mexico.
Where the North American auto industry must lead is in battery mineral recycling — making sure that the finite resources required to build today's battery packs aren't discarded after one use. That might require vast changes — up to and including changing the traditional ownership model or implementing secondary leases — to maintain control over batteries long term.
The future of this trillion-dollar industry is on the line, and new levels of cooperation are key to ensuring this transition is ultimately successful.