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Audi’s EV Output Chokes on Battery Shortage

Problem may portend a wider auto industry issue in Europe
#europe #facilities #Audi

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The launch of Audi’s e-tron electric SUV just ran out of juice, literally. It’s not the new EV’s first production snag.

Audi e-tron SUV  (Image: Audi)

The latest snafu was a shortage of battery cells that shut down production for a week. Audi was hoping to get enough cells from LG Chem, its sole supplier, to restart the line today.

Cell Plant Bottleneck

The cells in question come from Audi’s sole source, the LG factory in Poland. Media reports in Europe say Audi wants to build 80,000 e-tron SUVs this year, but the South Korean-based supplier can’t guarantee enough for more than half that number of cars.

The LG facility has become a bottleneck for other European EV makers too. The same facility also supplies cells for the Jaguar I-Pace and Mercedes EQC electric SUVs.

Jaguar has said it is trimming I-Pace production because of LG supply issues. Mercedes has denied a media report that it will cut EQC production by 50% because of the same supply problem.

                                                  Audi e-tron GT concept   (Image: Audi)

Audi’s battery issues could get worse this year. The company wants to add a sportier sloped-roof version of the e-tron SUV, called the Sportback, along with a high-performance sedan dubbed the e-tron GT.

So Much for Experience

Two years ago, pundits were shaking their heads at the protracted production problems that plagued the launch of Tesla’s Model 3 electric sedan. The view then was that experienced carmakers would soon show Tesla how it’s done when they began building their own EVs.

But Audi, for one, hasn’t had an easy time of it. The company originally wanted to start selling the $76,000 e-tron SUV—its first all-electric model—in September 2018.

Didn’t happen. Production snags delayed the start of serious output until the end of the year. Retail deliveries of the high-performance SUV (402 hp and a zero-60 mph acceleration time of 5.5 seconds) didn’t begin in Europe until last spring.

U.S. sales started shortly thereafter. But they were almost immediately disrupted and Audi recalled all 2,200 units in the American market. Dealers replaced an inexpensive seal that could leak, allow an electric short-circuit and cause a fire.

Bottom Line

As experienced carmakers know, startup glitches are inevitable during a new-product launch. The question is how quickly those issues are resolved.

Analysts have been warning that Europe’s sudden surge in EV production, which begins this year, could soon overwhelm available batterymaking capacity. The crunch also highlights Europe’s lack of capacity to produce its own cells rather than buying them from Chinese and South Korea suppliers.

The industry will be watching both issues very closely, and so will we.

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