GM’s goal to take a prominent position in the battery supply chain came together before the global microchip shortage and pandemic roiled the industry, but the crises highlight the importance of automakers’ role.
In late 2019, when GM announced it would develop proprietary Ultium batteries through a joint venture with supplier LG Energy, GM’s leaders knew the automaker must redefine the supply chain to accelerate EV production and adoption, Amin said.
The chip shortage “allowed us to think about the risk factors in a different way and how quickly those risk factors can impact the business,” he said.
GM executives had to act fast when learning of shortages. The ability to make quick calls and discuss concerns and solutions in real time “gives you confidence in resetting the strategy in an area that you have no experience,” Amin said.
The lag time for semiconductors is longer than the wait for many other automotive components, so just-in-time delivery isn’t feasible. Sourcing materials for batteries requires even more foresight. It can take seven to 10 years to establish lithium extraction sites, for example, Amin said.
Now GM is considering not only capacity but also sustainable extraction processes, logistics and geopolitical risk as it develops batteries.
“Those elements aren’t things we traditionally thought about in setting up our value chain,” Amin said.
GM has been encouraging and supporting more sustainable practices across its existing supply chain, Amin said, but in the battery space, GM can build the network with sustainable practices from the start.
“EVs alone are a great contributor to reduce greenhouse gas, but there are many other opportunities behind that,” Amin said. “We are looking at the entire value chain: How do we do it in the most sustainable way? How do we protect that it’s done socially correct, environmentally correct and with governance? And how do … we know with confidence we’ll have the right material at the right time to deliver on our product portfolio?”
