Stellantis CEO, Carlos Tavares, is starting to bring to light the things everyone outside of the auto industry and Washington DC has been stating for a while now. He states that there is a raw material shortage for battery production looming over the auto industry’s big push for EVs. Believe it or not, the production of EVs and the mining of the raw materials needed is very hard on the environment. Take a look at the common cobalt mine. It is a hole in the ground that is full of corrosive and harmful material. These mining operations are several years behind the growing demand for the resource and I think you can expect prices of these resources to skyrocket as the supply dwindles and demand grows exponentially.
LG Chem and LG Energy Solution, GM’s EV battery suppliers, recently invested $50 million into battery recycling company Li-Cycle Holdings Corp. This company’s goal is to recycle old batteries and pull the precious metals and materials from them and ship them for production into new batteries. So far it looks as though LG’s companies are going to be getting around 220,000 tons of nickel and GM’s Cobalt supplier, Glencore, will be receiving the cobalt, following a previous investment and agreement worth about $200 million. I am happy to see the auto industry investing in recycling even if it is purely profit-driven, at least I think most people agree it is the right thing to do.
GM order banks opened yesterday for fleet and government Suburban and Tahoe orders. We have been screaming from the mountain tops to get your orders in as soon as possible because we do not expect order banks for any vehicle in the near future to be open for long. Backed-up demand will most likely fill the order banks quickly. As of today, the order banks are still open but it looks as though they most likely will be full and closed by today. The worst news about this is that GM is claiming a 14-month production run of 2023 Tahoes and Suburbans which means after these order banks close you can expect a 16-18 month black-out period where no one will be able to order new fleet or government Tahoes and Suburbans. If you have not got your fleet vehicles orders make sure you do so NOW.
Next week, on the 26th, GM will be opening order banks for Silverado pickups. This is obviously the vehicles that most companies use for business and I would expect the order banks to be filled even quicker than the Tahoes. GM also announced that regular cab and double cab trucks can be ordered at will by fleet and government customers but crew cabs, the most popular option, will only be able to be ordered if the order was preapproved by GM’s Fleet Managers. We are still waiting on allocation numbers for the vehicles along with what companies can expect their fleet discounts to be, so it looks like we may be ordering without real pricing again. I would expect this year’s pricing increases to be among the highest single-year increases since the beginning of the automotive industry.
That is it for recent automotive news this week. The news cycle on fleet vehicles has been pretty quiet lately with the majority of coverage seemingly going to luxury models and brands like Astin Martin, BMW, and Mercedes focusing on ultra high end EVs. I believe mostly to distract from the issues facing us regular people.
