• ITVI.USA
    15,070.180
    -26.240
    -0.2%
  • OTRI.USA
    24.340
    -0.150
    -0.6%
  • OTVI.USA
    15,050.880
    -19.870
    -0.1%
  • TLT.USA
    2.710
    -0.020
    -0.7%
  • TSTOPVRPM.ATLPHL
    3.350
    0.280
    9.1%
  • TSTOPVRPM.CHIATL
    3.090
    0.230
    8%
  • TSTOPVRPM.DALLAX
    1.730
    0.070
    4.2%
  • TSTOPVRPM.LAXDAL
    3.100
    0.150
    5.1%
  • TSTOPVRPM.PHLCHI
    2.160
    0.120
    5.9%
  • TSTOPVRPM.LAXSEA
    3.570
    0.220
    6.6%
  • WAIT.USA
    125.000
    -2.000
    -1.6%
  • ITVI.USA
    15,070.180
    -26.240
    -0.2%
  • OTRI.USA
    24.340
    -0.150
    -0.6%
  • OTVI.USA
    15,050.880
    -19.870
    -0.1%
  • TLT.USA
    2.710
    -0.020
    -0.7%
  • TSTOPVRPM.ATLPHL
    3.350
    0.280
    9.1%
  • TSTOPVRPM.CHIATL
    3.090
    0.230
    8%
  • TSTOPVRPM.DALLAX
    1.730
    0.070
    4.2%
  • TSTOPVRPM.LAXDAL
    3.100
    0.150
    5.1%
  • TSTOPVRPM.PHLCHI
    2.160
    0.120
    5.9%
  • TSTOPVRPM.LAXSEA
    3.570
    0.220
    6.6%
  • WAIT.USA
    125.000
    -2.000
    -1.6%
NewsNewslettersSupply ChainsTransmission

Transmission: Seat shortage bigger problem than chip constraint

Here’s what’s cookin’ today in Transmission:

  • Winter Storm Uri causes seat shortage
  • The future of EVs: Solid-state batteries
  • Industry news

Winter Storm Uri causes seat shortage

The United States’ infrastructure was put to the test recently when Winter Storm Uri passed through the lower half of the country. Millions of people in Texas were without power for days as the state struggled with the low temperatures. Natural gas production dropped significantly and chip production with it. Petrochemical plants shut down as well and, as a result, the industry is now on the brink of a potential seat shortage.

How? Production of oil byproducts used to make propylene oxide came to a halt. Propylene oxide is needed for the polyurethane foam that, as you can probably guess, is found in auto seats. 

An auto industry executive, who remains unnamed, informed Automotive News that some seating suppliers expect to run out of foam by Monday. “A lot of production is down still for oil refinery byproduct and in a few days no one is going to be able to make propylene oxide,” the executive said. “Everyone is scrambling. This problem is bigger and closer than the semiconductor issue.”

While seating suppliers are on the verge of, if not already, beginning to sweat, automakers aren’t feeling the impact just yet. Most supply chain disruptions gradually move downstream. Likewise, this tidal wave of delay won’t surface for automakers until mid- to late March.

“GM continues to work closely with the supply base to mitigate the impacts caused by the significant winter weather that affected a large portion of the country the week of Feb. 15,” said spokesman David Barnas. “We don’t anticipate any immediate production impacts.” Other automakers, including Hyundai and Toyota, responded similarly. 

It seems like most automakers are responding casually to this issue. Yes, they’ve dealt with situations like this in the past. However, automakers have a lot on their plates right now. Not only are they battling a chip shortage but there’s also an uphill climb to reach desired inventory levels after the pandemic thwarted production for two months last spring. When the chip shortage emerged in December, the response was on par with this shortage, which is astounding. Surely this shortage will be sorted out quicker than the semiconductor strain? 


The future of EVs: Solid-state batteries 

It’s easy to get carried away on the industry’s push for EV adoption. It seems like each day more and more headlines are popping up surrounding new EV technologies, new industry competitors or new EV models. While electric vehicles are exciting and present new opportunities for sustainable mobility, one point that’s crucial to remember is that there is still a long road ahead in order for mass adoption to take place. I want to focus on one roadblock currently in the way: battery technology.

First off, I’d like to be clear that I did not major in chemistry, engineering or any other subject that involves battery production. With that in mind, I’m going to keep things relatively simple so I don’t misspeak (bear with me).

Let’s dive in. Lithium-ion batteries are the norm in consumer tech and current EVs. As the industry moves into a more sustainable direction, automakers are finding it expensive to manufacture these batteries. They use a liquid electrolyte to move electrons between positive and negative electrodes, which negatively affects both the range and speed of a charge. It also limits the variety of materials that can be used. 

This challenging barrier has opened up the door for solid-state batteries. Solid-state batteries use solid electrodes as opposed to liquid electrodes used in lithium-ion batteries (hence the name). Simply put, this small change allows for more energy capacity and longer range. But there is still plenty more research and development that must take place in order to effectively implement and scale. Solid-state batteries naturally offer lower ionic conductivity. They are also at risk of degrading quickly. 

Back in December, Quantumscape claimed it solved the solid-state equation. The company didn’t share too much information on its discovery, probably because it wants to ensure it stays hidden. However, it did share that it had created a ceramic separator, a project that Quantumscape began working on back in 2015. Outside of Quantumscape, there are other manufacturers trying to break the code. Recently, Rivian, a well-known EV startup, posted multiple job listings in search of solid-state experts. This is a telltale sign that Rivian clearly sees solid-state batteries as the future. It looks like the young gun is really looking to compete with the big dogs.

Pay attention to the development of solid-state technology. In my opinion, I think we’ll reach an inflection point for EV adoption once these batteries are utilized and produced on a mass sale. Hopefully by then, charging infrastructure will have improved and other issues like range anxiety will have subdued. 


Industry news:

  • FedEx has committed to an all-electric fleet by 2040. The folks from Memphis, Tennessee, are pouring $2 billion into global efforts to transition to a carbon-neutral footprint. FedEx operates 500,000 vehicles and aims to electrify 50% of its fleet in just four years. 
  • General Motors is considering building a new battery factory close to its existing plant in Spring Hill, Tennessee. The automaker is already building another battery facility in Ohio that cost nearly $2.3 billion. Mary Barra, CEO of GM, revealed that the company wants to exceed its initial target of selling 1 million EVs by 2025.
  • Stellantis is focusing on EVs and communication as it navigates life after the merger between FCA and PSA. Stellantis CEO Carlos Tavares is guiding the company by ensuring its carefully integrating operations from the two previous auto groups. Tavares also stated that Stellantis isn’t making any major future investments for the internal combustion engine. 

Like what you just read? Join the community! Sign up for Transmission to get the latest insight, news and analysis regarding the automotive supply chain: https://freightwaves.com/subscribe

Clay Katzman

Clay is a supply chain analyst with a specialized focus on the automotive industry. He graduated from the University of Tennessee-Chattanooga and joined the Freightwaves team in the fall of 2020. Prior to Freightwaves, he worked for a marketing agency while finishing up his degree in business analytics.

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