Jaguar is shutting down their I-Pace line due to a shortage of batteries from LG Chem, The Times reports.

The shutdown of their production line in Graz, Austria will last a week starting next Monday.

Jaguar isn’t the first company to have recent battery supply issues.  We’ve seen production target cuts from Audi on their e-tron and Mercedes on their EQC due to supply issues from LG Chem.

Jaguar has been trying to secure more battery capacity, but it’s been slow-going.  They reportedly signed a deal for cylindrical cells with Samsung SDI in 2018, though they use LG pouch cells for the I-Pace.

The Jaguar I-Pace has been quite successful for the company, winning awards and selling around 18,000 cars worldwide last year, with 12k of those sales happening in Europe.  This may not seem like many cars, but Jaguar is a comparatively small automaker.  They sold 76k cars total in Europe, which means the I-Pace made up around 16% of their European sales.  This is quite an impressive figure for traditional automakers, most of whom sell a vanishingly small percentage of all-electric vehicles.

This is important for Jaguar especially since they are the least-efficient automaker in Europe.  Europe is preparing to add large penalties on automakers that don’t meet emissions goals, and Jaguar needs to do a lot of work to get there.

Jaguar may be more able to weather these penalties due to their more expensive vehicles, but it’s going to either require higher car prices or a hit to their profitability.  They face a projected fine on the order of ~$100 million next year based on the trajectory of their current emissions.

On top of this, Jaguar’s home country, the UK, has just moved forward their ICE car sales ban to 2035.  So getting more electric cars on the road is a big deal for Jaguar, and a pause in production won’t help that.

Other automakers have been affected by the same emissions targets.  Several have decided to divert production to Europe this year and next in their attempt at compliance.  Mercedes, Ford, VW, and Honda have all decided to either divert production to Europe or not to bring certain EV models to the US at all.

Electrek’s Take

To be fair, a week isn’t that huge of a deal – but it is indicative of greater issues across the industry.

It’s looking like LG has overextended itself with battery supply agreements, since this is happening to quite a few firms.  Which is a shame, because the more electric cars we get on the road, the better for everyone.

So industry predictions about how “electric cars aren’t taking off like some expected they would” are a little silly.  Whenever someone tells you electric cars don’t have enough demand, perhaps point out that the problem seems to be supply, not demand.

But then, we’ve heard this story before, and we’ve even heard it all the way through to its conclusion.

For most of the last decade, we had to hear constantly about how there were “demand issues” with EVs, and that electric car sales were just a drop in the bucket and the industry could safely ignore them and continue on poisoning us with their gassers while waiting for this EV fad to pass.

At the time, there was one company which said: “er, actually, the issue is battery supply, and it would probably be a good idea to build a giant battery factory to be ready for the future, cause you’re going to need batteries and there aren’t enough to go around.”

That was almost 7 years ago.  Now that factory is up and running and that company outsells all its competitors combined with a single car model (in the US).  While those competitors all fight over the limited battery supply which they probably should have seen coming – if they had taken this electric car thing seriously a little earlier.

Perhaps they’ve seen the light by now.  Some of these automakers are finally making big investments into their own battery production.  But even VW, the most serious of the incumbent automakers, still predicts to sell only 20 million EVs over the next 10 years – and their annual sales are 10 million.  So that makes ~80% gassers through 2030 when ICE car bans start going into effect in Europe.  And yet these sluggish EV plans are still ahead of most of the incumbents.

So perhaps we need to ratchet up those plans a bit further industrywide.  Instead of being wrong again with too-conservative predictions of how quickly EVs will take off.  And inevitably losing even more market share to the one company that’s actually taking this thing seriously.

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