The Wall Street Journal (June 5, 2023) led with a front page article called the “Nickel Pickle” and then went on with two more stories about EV headwinds. Let’s summarize: To make batteries for EVs, companies need to mine and refine large amounts of nickel. The process of getting the mineral out of the ground and turning it into battery-ready substances is particularly environmentally unfriendly. Reaching the nickel means cutting down swaths of rainforest. Refining it is a carbon-intensive process that produces waste slurry that’s hard to dispose of.
The nickel issue reflects a larger contradiction within the EV industry: Though EVs are designed to be less damaging to the environment in the long term than conventional cars, the process of building them carries substantial environmental harm. One Indonesian miner, for example, said that rainforest clearing caused greenhouse gas emissions equivalent to 56,000 tons of carbon-dioxide. That’s equal to driving 12,000 conventional cars for a year.
Tesla adds that EVs cause more emissions during the manufacturing phase than conventional vehicles, due in part to the process of extracting and refining minerals. Nickel is responsible for 1/3 of the carbon emissions generated from making a battery cell.
The second piece states that battery-powered EVs “are not the only way to achieve the world’s carbon neutrality goals.” Toyota is promoting its hybrids and plug-in hybrids as alternatives to battery-powered EVs. Plug-in hybrids contain an engine that can kick in when the battery runs low and are cheaper than EVs. That firm has pledged to make all its vehicles carbon neutral by 2050.
Toyota’s CEO made news when he claimed that a “silent majority” in the auto industry “is wondering whether EVs are really OK to have as a single option.” He added that “the amount of raw materials in one long-range battery EV could instead be used to make 6 plug-in hybrid electric vehicles or 90 hybrid electric vehicles.” For that anti-EV comment, progressive investors and government pension funds have moved to oust him.
The 3rd article reports that VW “is searching the world, from Canada to Indonesia, for supplies to make the batteries in EVs it sells less dependent on Chinese components,” especially nickel. China dominates global production of refined battery materials used in EV batteries. “Today we are 100% dependent on China,” says a VW exec.
Classroom discussion questions:
- Why is nickel a supply chain problem?
- Why is the Toyota position controversial?