Ford Plays Catch-Up in Electric and Self-Driving Technology

by on
electric vehicle charging station
Michael Flippo/Adobe Stock

Ford Motor Company has bet the farm on electric and driverless cars, to borrow a phrase from an article this week.

The appointment of Ford’s new boss, Jim Hackett — who previously headed Ford’s Smart Mobility subsidiary from March 2016 but prior to that, was boss of Steelcase, a business furniture company — illustrates more graphically than words that Ford has read the runes for the internal combustion engine and the current automotive business model, and decided it needs a radical shake-up in its thinking and approach.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

A rethink of where the industry is going over the next 10 years has prompted not just the hiring of this talented outsider, but also, earlier this year, Ford’s $1 billion investment in Argo AI, an artificial intelligence company that, it is hoped, will produce the software needed for a new generation of self-driving cars.

Self-driving cars, though, are dependent not just on developing new technologies but a host of legal, insurance policy and regulatory changes that will take time to evolve.

Ultimately, the impact will be profound, not just in terms of productivity but in aiding the change from car ownership to car usage on demand, a change that could reduce the number of vehicles owned and ultimately requiring massive town-center parking lots to  be manufactured. But significant as that trend could be, suggestions that it will happen in the next five to 10 years are probably optimistic — there are just so many variables that need to come into line before momentum can build.

What Ford and many other automotive companies may find is that the pace of adoption for electric vehicles accelerates worldwide but begins to diverge between the U.S. and other major markets, such as Europe and China. The election of Donald Trump and his appointment of Scott Pruitt as head of the EPA may have an impact on the effect emission standards have on the switch to electric vehicles. A greater focus on emissions both in Europe and China is already driving changes in public policy that support the uptake of electric vehicles in those markets.

As costs come down with volume, the lower after-sales costs in maintenance and consumables (such as parts and liquids), combined with lower fuel costs, will make the economic argument for electric vehicles more compelling in those markets. According to the article in The Telegraph, by 2019 it’s estimated electric vehicle models with a range of 400 to 500 kilometers (250 to 310 miles) will be available, making electric vehicles comparable with the internal combustion engine. With comparable range and lower costs, the switchover is expected to accelerate. Volkswagen is predicting that 25% of sales will be electric by 2025 and 50% by 2030.

What This Means for Metal Buyers

Meanwhile, copper producers and particularly copper processors are watching these trends with enthusiasm.

Glencore estimates that from a few kilograms of copper required in a conventional car, electric vehicles could boost this to between 80 and 160 kilograms per vehicle, suggesting that copper demand could double in the next 20 years as a result. The impact on cobalt could be even more profound — with 60% of global supply coming from the Democratic Republic of the Congo, the doubling of prices we have seen in the last year could potentially be just the tip of the iceberg.

Supply is more constrained with cobalt than copper and is politically more unstable with cobalt. Hopefully, the supply-side will adjust and expand as demand gradually increases, but the timeframe for new mines and processing facilities is longer than the predicted increase in demand.

Free Sample Report: Our Annual Metal Buying Outlook

Comments (3)

  1. Morgan says:

    Electric cars are the future of automotive industry. The environmental problem created by diesel and petrol cars are difficult to repair. It is the need of the hour to switch for environmentally friendly vehicles. A thought for future generation benefits. We should sacrifice our comfort to facilitate future generation. Bhutan is the country, which has 72 percent of its area under forest and It gives special attention towards the greener world. Their majority transport system relies on the electrical vehicle.

  2. Vemark says:

    It is a great step taken by Ford, especially to introduce Self driving technology and Electric Cars. Looking forward to it.

  3. Vemark says:

    Electric Cars are definitely something that needs to be watched out for in the future.

Leave a Comment

Your email address will not be published. Required fields are marked *