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Carmakers Dream of Clean, Green, Mean Electric Machines

From motor magnets with toxic histories to batteries made using copious fossil-fuel power, many challenges face carmakers seeking to purge dirtier materials from their supply chains to satisfy regulators and investors.

These obstacles represent opportunities for a growing group of companies in the electric vehicle (EV) ecosystem that bet they can capitalize on that demand.

They include Advanced Electric Machines (AEM) in northern England, which is working with Volkswagen luxury brand Bentley and others in the auto industry to develop recyclable electric motors free of rare-earth metals, which are often produced using polluting chemicals.

“Our customers need ways to ditch internal combustion engines that are cost-effective and sustainable without putting tons of this nasty rare earth stuff into their cars,” CEO James Widmer said.

The increasing scrutiny of supply chains comes as the European Union, which announced draft laws last year to enforce net-zero emissions targets, considers charging for excess carbon on imports, as well as legislation requiring ethical sourcing and a recycling plan for EV batteries.

Globally, the prospect looms of national carbon taxes that could cost lagging automakers dearly, while investors and financiers increasingly favour companies with strong environmental, social and governance (ESG) credentials.

“The focus on ESG has become more intense,” said Moshiel Biton, CEO of Israeli battery technology company Addionics, which makes three-dimensional electrodes that Biton says are more efficient, making cleaner but less energy-dense battery chemistries commercially viable.

“But it’s nothing compared to what’s coming.”

Yet it remains to be seen how many of the companies looking to tap the market for cleaning up electric cars will succeed in a rapidly evolving EV technology arena; what’s cutting edge today could be obsolete tomorrow.

Given fierce competition, any projects not advanced enough at the right time will risk missing their chance, according to MacMurray Whale, environmental sustainability strategist at Cormark Securities in Toronto.

“You won’t be able to attract the investor interest because there’s a lot of them and they’re all trying to argue they’re the best,” he said.

The demand is real, though, from carmakers who face a daunting task to navigate the challenges of making everything from steel to aluminium using cleaner processes, to finding less environmentally damaging battery chemistries.

“We only source new business with suppliers with a road map to net zero,” said Andy Palmer, an electric vehicle pioneer who is CEO of Switch Mobility, a British-based EV maker owned by Indian commercial vehicle maker Ashok Leyland

Switch buys credits to offset the carbon used to make metal components and factors in that cost when assessing new parts, he added.

Squeezing carbon out of the supply chain is a “vital part” of BMW’s carbon-reduction strategy, sustainability vice president Thomas Becker said.

The German carmaker has negotiated with all its battery suppliers and many of its steel and aluminium suppliers that their materials are made using renewable energy, Becker told a conference in London in March.

The problem with EVs is they are so carbon-intensive to make, they have to drive thousands of miles before they do less harm to the environment than a gas-guzzling saloon.

BMW has measured the CO2 footprint throughout its supply chain. If it took no action, its footprint per vehicle would be 18 tonnes of CO2 in 2030, versus 12 tonnes per vehicle in 2019, according to the carmaker. But its carbon reduction plans should cut that number to nine tonnes by 2030, it says.

The need for greener EVs has sent some carmakers back to the drawing board.

Pennsylvania-based engineering company Ansys (ANSS.O), which develops modelling software for various industries, has seen surging demand from carmakers seeking to simulate cars and components with greener or lighter materials, such as aluminium instead of steel, said Pepi Maksimovic, director of application engineering.

“There’s an intensification of the effort to address these issues in terms of … bringing better cleaner, greener, meaner technology to the market faster, earlier,” she added. (Reuters)

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