This Morning in Metals: Mercedes-Benz, Stellantis take stakes in battery cell manufacturer

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This morning in metals news: Mercedes-Benz, Stellantis and TotalEnergies will each take a 33% stake in Automotive Cells Company; meanwhile, the Semiconductor Industry Association offered its reaction to the Biden administration’s recent meeting on the semiconductor supply chain; and, lastly, the Energy Information Administration expects a rise in natural gas consumption in 2021 and 2022.

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Automakers team up to scale battery project

electric car battery

Electric car lithium battery pack. (Nischaporn/ Adobe Stock)

Mercedes-Benz is collaborating with Stellantis and TotalEnergies to scale up production of the Automotive Cells Company.

Each partner will have a 33% stake in the battery cells manufacturer.

The project will cost more than €7 billion ($8.2 billion), Mercedes-Benz estimated.

“On its path toward an all-electric future, Mercedes-Benz is taking an equity stake in European battery cell manufacturer Automotive Cells Company (ACC) to scale up development and production of next-generation high-performance battery cells and modules,” Mercedes-Benz said. “As announced in July 2021, Mercedes-Benz will be ready to go fully electric by the end of the decade – wherever market conditions allow.”

To reach that goal, the German automaker said it will need battery production capacity of more than 200 Gigawatt hours.

Semiconductor supply

Semiconductor supply chain woes continue to hamper the automotive industry, even as automotive demand remains strong.

On Thursday, Secretary of Commerce Gina Raimondo and National Economic Council Director Brian Deese convened a meeting to discuss the semiconductor supply chain.

“Longer term solutions to the shortage are still important, and that is why Congress needs to act to both build a domestic industrial capacity for chips and create a new supply chain resiliency program at the Commerce Department so that we can have the ability to monitor vulnerabilities and take action to close them,” the White House said in a release. “These actions are critical to advance both our economic competitiveness and our national security.”

Furthermore, the Biden administration launched a request for information to semiconductor supply chain participants asking them to voluntarily share information about inventories, demand, and delivery dynamics.

The Semiconductor Industry Association noted the U.S. share of global semiconductor manufacturing has fallen from 37% in 1990 to just 12% today.

“We welcome today’s meeting and look forward to a productive discussion about the critical role of semiconductors to America’s economy, national security, and global technology leadership, as well as the need to strengthen our country’s chip supply chains,” the industry group said in a release.

Natural gas consumption to rise

In energy news, the Energy Information Administration forecasts natural gas consumption to rise in 2021 and 2022.

The EIA forecast natural gas deliveries to industrial consumers will average 23.8 billion cubic feet per day (Bcf/d) in 2022. That figure would come in near the all-time high set in the early 1970s.

“Many industrial processes have limited or no alternatives to natural gas for use as both fuel and feedstock, making industrial natural gas consumption relatively insensitive to short-term price fluctuations,” the EIA added. “Some value-added industrial products such as ammonia, methanol, and hydrogen that are produced from natural gas remain economically competitive even when natural gas prices are relatively high.”

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