Opinion | Why Electric Mail Trucks Are the Way of the Future


US Postal Service Trucks

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USPS Electric Mail Trucks promise zero-emission delivery, lower lifecycle and maintenance costs, and cleaner air. Congressional funding in Build Back Better would modernize the EV fleet and expand charging infrastructure, improving public health nationwide.

 

Key Points

USPS Electric Mail Trucks are zero-emission delivery vehicles that cut costs, reduce pollution, and improve health.

✅ Lower lifetime fuel and maintenance costs vs gas trucks

✅ Cuts greenhouse gas and NOx emissions in communities

✅ Expands charging infrastructure via federal investments

 

The U.S. Postal Service faces serious challenges, with billions of dollars in annual losses and total mail volume continuing to decline. Meanwhile, Congress is constantly hamstringing the agency.

But now lawmakers have an opportunity to invest in the Postal Service in a way that would pay dividends for years to come: By electrifying the postal fleet.

Tucked inside the massive social spending and climate package lumbering through the Senate is money for new, cleaner postal delivery trucks. There’s a lot to like about electric postal trucks. They’d significantly improve Americans’ health while also slowing climate change. And it just makes sense for taxpayers over the long term; the Postal Service’s private sector competitors have already made similar investments, as EV adoption reaches an EV inflection point in the market. As Democrats weigh potential areas to cut in President Joe Biden’s Build Back Better plan, this is one provision that should escape the knife.

To call the U.S. Postal Service’s current vehicles “clunkers” would be an understatement. These often decades-old trucks are famous for having no airbags, no air conditioning and a nasty habit of catching fire. So the Postal Service’s recent decision to buy 165,000 replacement trucks is basically a no-brainer. But the main question is whether they will run on electricity or gasoline.

Electric vehicles are newer to the market and still carry a higher sticker price, as seen with electric bus adoption in many cities. But that higher price buys concrete benefits, like lower lifetime fuel and maintenance costs and huge reductions in pollution. Government demand for electric trucks will also push private markets to create better, cheaper vehicles, directly benefiting consumers. So while buying electric postal trucks may be somewhat more costly at first, over the long term, failing to do so could be far costlier.

At some level, this is a straightforward business decision that the Postal Service’s competitors have already made. For instance, Amazon has already deployed some of the 100,000 electric vans it recently ordered, and FedEx has promised a fully electric ground fleet by 2040, while nonprofit investment in electric trucks is accelerating electrification at major ports. In a couple of decades, the Postal Service could be the only carrier still driving dirty gas guzzlers, buying expensive fuel and paying the higher maintenance costs that combustion engines routinely require. Consumers could flock to greener competitors.

Beyond these business advantages, zero-emission vehicles carry other big benefits for the public. The Postal Service recently calculated some of these benefits by estimating the climate harms that going all-electric would avoid, benefits that persist even where electricity generation still includes fossil-generated electricity in nearby grids. Its findings were telling: A fully electric fleet would prevent millions or tens of millions of dollars’ worth of climate-change-related harms to property and human health each year of the trucks’ lifetimes (and this is probably a considerable underestimate). The world leaders that recently gathered at the global climate summit in Glasgow encouraged exactly this type of transition toward low-carbon technologies.

A cleaner postal fleet would benefit Americans in many other important ways. In addition to warming the planet, tailpipe pollutants can have dire health consequences for the people who breathe in the fumes. Mail trucks traverse virtually every neighborhood in the country and often must idle in residential areas, so we all benefit when they stop emitting. And these localized harms are not distributed equally. Some parts of the country — too often, low-income communities of color — already have poor air quality. Removing pollution from dirty mail trucks will especially help these overburdened and underserved populations.

The government’s purchasing power also routinely inspires companies to devise better and cheaper ways to do business. Investments in aerospace technologies, for instance, have spilled over into consumer innovations, giving us GPS technologies and faster, more fuel-efficient passenger jets. Bulk demand for cleaner trucks could inspire similar innovations as companies clamor for government contracts, meaning we all could get cheaper and better green products like car batteries, and the American EV boom could further accelerate those gains.

Additionally, because postal trucks are virtually everywhere in the country, if they go electric, that would mean more charging stations and grid updates everywhere too, and better utility planning for truck fleets to ensure reliable service. Suddenly, that long road trip that discourages many would-be electric car buyers may be simpler, which could boost electric vehicle adoption.

White House climate adviser Gina McCarthy talks with EVgo CEO Cathy Zoi before the start of an event near an EVgo electric car charging station.
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The case for electrifying the postal fleet is strong from both a business and a social standpoint. Indeed, even Postmaster General Louis DeJoy, who was appointed during the Trump administration, supports it. But getting there is not so simple. Most private businesses could just borrow the money they need for this investment and pay it back with the long-term savings they would enjoy. But not the Postal Service. Thanks to its byzantine funding structure, it cannot afford electric trucks’ upfront costs unless Congress either provides the money or lets it borrow more. This is the primary reason it has not committed to making more than 10 percent of its fleet electric.

And that returns us to the Build Back Better legislation. The version passed by the House sets aside $7 billion to help the Postal Service buy electric mail trucks — enough to electrify the vast majority of its fleet by the end of the decade.

Biden has made expanding the use of electric vehicles a top priority, setting an ambitious goal of 100 percent zero-emission federal vehicle acquisitions by 2035, and new EPA emission limits aim to accelerate EV adoption. But Sen. Joe Manchin has expressed resistance to some of the climate-related subsidies in the legislation and is also eager to keep costs down. This provision, however, is worthy of the West Virginia Democrat’s support.

Most Americans would see — and benefit from — these trucks on a daily basis. And for an operation that got its start under Benjamin Franklin, it’s a crucial way to keep the Postal Service relevant.

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Intersolar Europe restart 2021: solar power is becoming increasingly popular in Poland

Poland Solar PV Boom drives record installations, rooftop and utility-scale growth, EU-aligned incentives, net metering, PPAs, and auctions, pushing capacity toward 8.3 GW by 2024 while prosumers, grid upgrades, and energy management expand.

 

Key Points

A rapid expansion of Poland's PV market, driven by incentives, PPAs, and prosumers across rooftop and utility-scale.

✅ 2.2 GW added in 2020, triple 2019, led by small-scale prosumers

✅ Incentives: My Current, Clean Air, Agroenergia, net metering

✅ Growth toward 8.3 GW by 2024; PPAs and auctions scale utility

 

Photovoltaics (PV) is booming in Poland. According to SolarPower Europe, 2.2 gigawatts (GW) of solar power was installed in the country in 2020 - nearly three times as much as the 823 megawatts (MW) installed in 2019. This places Poland fourth across Europe, behind Germany, where a solar power boost has been underway (4.8 GW added in 2020), the Netherlands (2.8 GW) and Spain (2.6 GW). So all eyes in the industry are on the up-and-coming Polish market. The solar industry will come together at Intersolar Europe Restart 2021, taking place from October 6 to 8 at Messe München. As part of The smarter E Europe Restart 2021, manufacturers, suppliers, distributors and service providers will all present their products and innovations at the world's leading exhibition for the solar industry.

All signs point to continued strong growth, with renewables on course to set records across markets. An intermediate, more conservative EU Market Outlook forecast from SolarPower Europe expects the Polish solar market to grow by 35 percent annually, meaning that it will have achieved a PV capacity of 8.3 GW by 2024 as solar reshapes Northern Europe's power prices over the medium term. "PV in Poland is booming at every level - from private and commercial PV rooftop systems to large free-standing installations," says Dr. Stanislaw Pietruszko, President of the Polish Society for Photovoltaics (PV Poland). According to the PV Poland, the number of registered small-scale systems - those under 50 kilowatts (kW) - with an average capacity of 6.5 kilowatts (kW) grew from 155,000 (992 MW) at the end of 2019 to 457,400 (3 GW) by the end of 2020. These small-scale systems account for 75 percent of all PV capacity installed in Poland. Larger PV projects with a capacity of 4 GW have already been approved for grid connection, further attesting to the forecast growth.

8,000 people employed in the PV industry
Andrzej Kazmierski, Deputy Director of the Department for Low-emission Economy within the Polish Ministry of Economic Development, Labour and Technology, explained in the Intersolar Europe webinar "A Rising Star: PV Market Poland" at the end of March 2021 that the PV market volume in Poland currently amounts to 2.2 billion euros, with 8,000 people employed in the industry. According to Kazmierski, the implementation of the Renewable Energy Directive (RED II) in the EU, intended to promote energy communities and collective prosumers as well as long-term power purchase agreements (PPAs), will be a critical challenge, and ongoing Berlin PV barriers debates highlight the importance of regulatory coordination. Renewable energy must be integrated with greater focus into the energy system, and energy management and the grids themselves must be significantly expanded as researchers work to improve solar and wind integration. The government seeks to create a framework for stable market growth as well as to strengthen local value creation.


Government incentive programs in Poland
In addition to drastically reduced PV costs, reinforced by China's rapid PV expansion, and growing environmental consciousness, the Polish PV market is being advanced by an array of government-funded incentive programs such as My Current (230 million euros) and Clean Air as well as thermo-modernization. The incentive program Agroenergia (50 million euros) is specifically geared toward farmers and offers low-interest loans or direct subsidies for the construction of solar installations with capacities between 50 kW and 1 MW. Incentive programs for net metering have been extended to small and medium enterprises to provide stronger support for prosumers. Solar installations producing less than 50 kW benefit from a lower value-added tax of just eight percent (compared to the typical 23 percent). The acquisition and installation costs can be offset against income, in turn reducing income tax.
Government-funded auctions are also used to finance large-scale facilities, where the government selects operators of systems running on renewable energy who offer the lowest electricity price and funds the construction of their facilities. The winner of an auction back in December was an investment project for the construction of a 200 MW solar park in the Pomeranian Voivodeship.


Companies turn to solar power for self-consumption
Furthermore, Poland is now playing host to larger solar projects that do not rely on subsidies, as Europe's demand lifts US equipment makers amid supply shifts, such as a 64 MW solar farm in Witnica being built on the border to Germany whose electricity will be sold to a cement factory via a multi-year power purchase agreement. A new factory in Konin (Wielkopolska Voivodeship) for battery cathode materials to be used in electric cars will be powered with 100-percent renewable electricity. Plus, large companies are increasingly turning to solar power for self-consumption. For example, a leading manufacturer of metal furniture in Suwalki (Podlaskie Voivodeship) in northeastern Poland has recently started meeting its demand using a 2 MW roof-mounted and free-standing installation on the company premises.

 

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Solar panel sales double in the UK as homeowners look to cut soaring bills

UK Home Solar Panel Installation drives self-consumption as PV panels, hybrid inverters, and smart meters cut grid demand, enable EV charging, and prepare battery storage, even in cloudy winters, with app-based monitoring and MCS-certified installers.

 

Key Points

A residential PV setup reducing grid reliance via panels, hybrid inverters, smart meters, and battery-ready design.

✅ Cuts grid use; boosts self-consumption with PV generation

✅ Hybrid inverters enable future battery storage integration

✅ Smart meter and app monitor output, EV charging patterns

 

In a town north of London, the weather's been cloudy over the winter months. But it didn't stop this homeowner from installing solar panels in December.

On his smart metre, Kumi Thiruchelvam looks satisfied at the "0 watts" showing up under electricity. It's about 10 am, and he's not using any electricity from the grid.

Cost of installation? Between £12,000 and £13,000 (€13,500-€14,500), a fair chunk of savings, even for Thiruchelvam, who lives on a private avenue in Luton.

The investment was common sense for him following the surge in energy prices caused by the Russian invasion of Ukraine.

According to the Office of National Statistics, electricity prices in the UK had increased by 67 per cent in January 2023 compared to January 2022, while pilots show parked EVs can earn from grids in Europe, offering some relief.

Solar power installations doubled in 2022 compared to 2021, according to MCS, the standards organisation in charge of solar installations, a shift aligned with the UK grid's net-zero transition underway today.

"We've had a combination of soaring energy prices around the world, and then also we've increased our electricity consumption in the home through a number of reasons, including electric vehicles and emerging EV-solar integration trends," says Thiruchelvam.

His family owns a big house and no less than three electric vehicles, some of which can now power a home for days during outages, so their electricity consumption is higher than the normal household, about 12,000 kWh per year.

Around two-thirds should now be provided by solar panels, and EV owners can sell electricity back to the grid in some schemes as well, diversifying benefits.

"We originally sought the configuration to be rear, which is where the sun comes up, but we went for the front because it spends more time in the front throughout most of the year than in the rear. Also, there's more shade in the rear with trees," he says.

To get a quote for the installation, Thiruchelvam used Otovo, a Norwegian company which recently launched in the UK.

Using their app, he can monitor the electricity generated by his photovoltaic (PV) installation from his phone. The data comes from the inverters installed in the attic.

Their role is to change the direct current generated by the solar panels into alternating current to power appliances in the house safely.

They also communicate with the grid and monitor the electricity generated, supporting emerging vehicle-to-building charging strategies for demand management.

"We went for two hybrid inverters, allowing me to use a battery in the future or tap stored EV energy for buildings if needed," says Thiruchelvam.

"But because battery technology is still evolving, I chose not to. And also I viewed at that time that we would be consuming everything we'd be generating. So we didn't. But most likely I will upgrade the system as we approach summer with batteries."

 

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Scores more wind turbines proposed for Long Island’s South Shore

New York Offshore Wind Expansion adds Equinor's Empire Wind 2 and Beacon Wind, boosting megawatts, turbines, and grid connections for Long Island and Queens, with jobs, assembly at South Brooklyn Marine Terminal, and clean energy.

 

Key Points

A statewide initiative proposing new Equinor and partner projects to scale offshore wind capacity, jobs, and grid links.

✅ Adds 2,490 MW via Empire Wind 2 and Beacon Wind

✅ Connects to Nassau County and Queens grids for reliability

✅ Creates 3,000+ NY jobs with South Brooklyn Marine Terminal work

 

Scores more 600-foot tall wind turbines would be built off Jones Beach under a new proposal.

Norwegian energy conglomerate Equinor has bid to create another 2,500 megawatts of offshore wind power for New York state and Long Island, where offshore wind sites are being evaluated, with two projects. One, which would connect to the local electric grid in Nassau County, would more than double the number of turbines off Long Island to some 200. A second would be built around 50 miles from Montauk Point and connect to the state grid in Queens. The plan would also include conducting assembly work in Brooklyn.

In disclosures Tuesday in response to a state request for proposals, Equinor said it would bolster its already state-awarded, 819-megawatt Empire Wind project off Long Island’s South Shore with another called Empire Wind 2 that will add 1,260 megawatts. Turbines of at least 10 megawatts each would mean that the prior project’s 80 or so turbines could be joined by another 120. Equinor’s federally approved lease area off Long Island encompasses some 80,000 acres, starting 15 miles due south of Long Beach and extending east and south.

Equinor on Tuesday also submitted plans to offer a second project called Beacon Wind that would be built 50 miles from Montauk Point, off the Massachusetts South Coast area. It would be 1,230 megawatts and connect through Long Island Sound to Queens.

Equinor said its latest energy projects would generate more than 3,000 New York jobs, including use of the South Brooklyn Marine Terminal for “construction activities” and an operations and maintenance base.

The new proposals came in response to a New York State Energy Research and Development Authority bid request for renewable projects in the state. In a statement, Siri Espedal Kindem, president of Equinor Wind U.S., said the company’s plans would include “significant new benefits for New York – from workforce training, economic development, and community benefits – alongside a tremendous amount of homegrown, renewable energy.”

Meanwhile, Denmark-based Orsted, working with New England power company Eversource, has also submitted plans for a new offshore wind project called Sunrise Wind 2, a proposal that includes “multiple bids” that would create “hundreds of new jobs, and infrastructure investment,” according to a company statement. Con Edison Transmission will also work to develop transmission facilities for that project, the companies said.

Orsted and Eversource already have contracts to develop a 130-megawatt wind farm for LIPA to serve the South Fork, and an 880-megawatt wind farm for the state. All of its hundreds of turbines would be based in a lease area off the coast of Massachusetts and Rhode Island, where Vineyard Wind has progressed as a key project.

“Sunrise Wind 2 will create good-paying jobs for New York, support economic growth, and further reduce emissions while delivering affordable clean energy to Long Island and the rest of New York,” Joe Nolan, executive vice president for Eversource, said in a statement.

 

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UK Electric Vehicle Sales Surge to Record High

UK electric vehicle sales reached a record high in September, with battery and hybrid cars making up over half of new registrations. SMMT credits carmaker discounts, new models, and a £3,750 EV grant for driving strong demand across the UK market.

 

Why are UK Electric Vehicle Sales Surging to a Record High?

UK electric vehicle sales are surging to a record high because automakers are offering major discounts, more models are available than ever, and the government’s new £3,750 EV grant is making electric cars more affordable and appealing to both fleets and private buyers.

✅ BEV sales up nearly one-third in September

✅ Over half of all new cars are now electrified

✅ £3,750 EV grants boost consumer confidence

 

Electric vehicle (EV) sales in the United Kingdom reached a record high last month, marking a significant milestone in the country’s transition to cleaner transportation. According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), sales of pure battery electric vehicles (BEVs) surged by nearly one-third to 72,779 units in September, while plug-in hybrid registrations grew even faster.

The combined total of fully electric and hybrid vehicles accounted for more than half of all new car registrations, underscoring the growing appeal of electrified transport, alongside global EV market growth, among both businesses and private consumers. In total, 312,887 new vehicles were registered across the country — the strongest September performance since 2020, according to SMMT data.

SMMT chief executive Mike Hawes said the surge in electrified vehicle sales showed that “electrified vehicles are powering market growth after a sluggish summer.” He credited carmaker incentives, a wider choice of models, and government support for helping accelerate adoption, though U.S. EV market share dipped in Q1 2024 by comparison. “Industry investment in electric vehicles is paying off,” Hawes added, even as he acknowledged that “consumer demand still trails ambition.”

The UK government’s new electric car grant scheme has played a significant role in the rebound. The program offers buyers discounts of up to £3,750 on eligible EVs priced under £37,000. So far, more than 20,000 motorists have benefited, with 36 models approved for reductions of at least £1,500. Participating manufacturers include Ford, Toyota, Vauxhall, and Citroën.

Ian Plummer, chief commercial officer at Autotrader, said the grant had given a “real lift to the market,” echoing fuel-crisis EV inquiry surge in the UK. He noted that “since July, enquiries for new electric vehicles on Autotrader are up by almost 50%. For models eligible for the grant, interest has more than doubled.”

While the majority of BEVs — about 71.4% — were purchased by companies and fleets, the number of private buyers has also been increasing. Zero-emission vehicles now account for more than one in five (22.1%) new car registrations so far in 2025, similar to France’s 20% EV share record, highlighting the growing mainstream appeal of electric mobility.

The surge comes amid a challenging backdrop for the automotive sector, even as U.S. EV sales soared into 2024 across the Atlantic. The UK car industry is still reeling from the effects of US trade tariffs and recent disruptions, such as Jaguar Land Rover’s production shutdown following a cyberattack. Despite these hurdles, the strong September figures have boosted confidence in the industry’s recovery trajectory, and EU EV share grew during lockdown months offers precedent for resilience.

Among individual models, the Kia Sportage, Ford Puma, and Nissan Qashqai led overall sales, while two Chinese vehicles — the Jaecoo 7 and BYD Seal U — entered the top ten, reflecting China’s growing footprint in the UK market. Analysts say the arrival of competitively priced Chinese EVs could further intensify competition and drive prices lower for consumers.

With electrified vehicles now dominating new registrations and fresh government incentives in place, industry observers believe the UK is gaining momentum toward its long-term net-zero goals. The challenge, however, remains converting business fleet enthusiasm into sustained private-buyer confidence through affordable models, with UK consumer price concerns still a factor, reliable charging infrastructure, and continued policy support.

 

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Bimbo Canada signs agreements to offset 100 per cent of its electricity consumption for Canadian operations

Bimbo Canada VPPAs secure renewable electricity from RES wind and solar projects in Alberta, totaling 170MW, via 15-year contracts to offset consumption, advance RE100 goals, and drive decarbonization across bakeries, depots, and distribution centers.

 

Key Points

Virtual power purchase agreements sourcing wind and solar to offset Bimbo Canadas electricity and support RE100.

✅ 15-year RES contracts for Alberta wind and solar capacity

✅ Offsets electricity for bakeries, depots, and distribution centers

✅ Advances Grupo Bimbo RE100 target for 100% renewable power

 

Canada's oldest and largest bakery, Bimbo Canada, has signed two virtual power purchase agreements (VPPAs) with Renewable Energy Systems  (RES) to procure renewable electricity, similar to federal green electricity contracts advancing in Alberta, that will offset 100 per cent of the company's electricity consumption in Canada. The projects are expected to be fully operational by December, 2022.

Canada is the second market, alongside the United States, to enter into VPPAs, where companies like Amazon clean energy projects are expanding rapidly. These agreements, together with additional sustainability initiatives conducted around the world by the parent company Grupo Bimbo, will help the company offset 90 per cent of its global electricity consumption.

"Bimbo Canada is committed to nourishing a better world through productive sustainability practices," said Joe McCarthy, president of Bimbo Canada. "These agreements are the next big step in reducing our environmental footprint, as peers such as Arvato's first solar plant signal industry momentum, and becoming leaders in responsible stewardship of the environment."

The 15-year agreements with RES will support the commercial development of two renewable energy projects in southern Alberta, consisting of wind and solar projects, similar to RBC's solar PPA announced in the region, totaling 170MW of installed capacity. Under these two agreements, Bimbo Canada will procure the benefit of approximately 50MW of renewable electricity to offset electricity consumption for its 16 bakeries, 14 distribution centres and 191 depots. Commercial development for the wind and solar farms will be finalized later this year by RES Canada and the projects are expected to be fully operational by the end of next year.  

"RES is proud that its Alberta wind and solar projects, amid growth such as a $200M Alberta wind farm led by a Buffett-linked firm, are helping Bimbo Canada meet its sustainability initiatives," said Peter Clibbon, RES Senior VP of Development. "It's a win-win situation with our projects delivering competitive wind and solar electricity to Bimbo Canada, and while providing our host communities with long-term tax and landowner income."

In 2018, Grupo Bimbo joined RE100, a global initiative led by The Climate Group and in partnership with Carbon Disclosure Project (CDP) and committed to operating with 100 per cent renewable electricity by 2025. As a leading supplier of fresh-baked goods and snacks for Canadian families, these agreements support the company's targets and builds upon many successful past sustainability initiatives, as market activity by Canadian Solar project sales continues nationwide.

"The renewable electricity initiatives in our operations respond to Grupo Bimbo's deep commitment that we have had for many decades globally with the planet and with present and future generations," said Daniel Servitje, global CEO of Grupo Bimbo. "With this announcement, we have achieved another important milestone for the company on our journey towards becoming 100 per cent renewable electricity by 2025."

Last year, Bimbo Canada reduced product waste and exceeded its product waste reduction target by 18 per cent, which saved four million units of products from landfills. The company also eliminated 174 metric tonnes of plastic per year (equal to 43 adult elephants) through several packaging optimization initiatives.

Earlier this year, Bimbo Canada signed the Canada Plastics Pact (CPP) and, amid a broader push for clean energy exemplified by Edmonton rooftop solar installations, earned its first ENERGY STAR certification for its Hamilton, Ontario bakery. The company will continue to work towards other initiatives that fulfill its commitment to be a sustainable, highly productive and deeply humane company.

 

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GM, Ford Need Electric-Car Batteries, but Take Different Paths to Get Them

EV battery supply strategies weigh in-house cell manufacturing against supplier contracts, optimizing costs, scale, and supply-chain resilience for electric vehicles. Automakers like Tesla, GM-LG Chem, VW-Northvolt, and Ford balance gigafactories, joint ventures, and procurement risks.

 

Key Points

How automakers secure EV battery cells by balancing cost, scale, tech risk, and supply-chain control to meet demand.

✅ In-source cells via gigafactories, JVs, and proprietary chemistries

✅ Contract with LG Chem, Panasonic, CATL, SKI to diversify supply

✅ Manage costs, logistics, IP, and technology obsolescence risks

 

Auto makers, pumping billions of dollars into developing electric cars, are now facing a critical inflection point as they decide whether to get more involved with manufacturing the core batteries or buy them from others.

Batteries are one of an electric vehicle’s most expensive components, accounting for between a quarter and a third of the car’s value. Driving down their cost is key to profitability, executives say.

But whereas the internal combustion engine traditionally has been engineered and built by auto makers themselves, battery production for electric cars is dominated by Asian electronics and chemical firms, such as LG Chem Ltd. and Panasonic Corp. , and newcomers like China’s Contemporary Amperex Technology Co.

California, the U.S.’s largest car market, said last month it would end the sale of new gasoline- and diesel-powered passenger cars by 2035, putting pressure on the auto industry to accelerate its shift to electric vehicles in the coming years.

The race to lock in supplies for electric cars has auto makers taking varied paths, with growing Canada-U.S. collaboration across supply chains.

While most make the battery pack, a large metal enclosure often lining the bottom of the car, they also need the cells that are bundled together to form the core electricity storage.

Tesla several years ago opened its Gigafactory in Nevada to make batteries with Panasonic, which in the shared space would produce cells for the packs. The electric-car maker wanted to secure production specifically for its own models and lower manufacturing and logistics costs.

Now it is looking to in-source more of that production.

While Tesla will continue to buy cells from Panasonic and other suppliers, it is also working on its own cell technology and production capabilities, aiming for cheaper, more powerful batteries to ensure it can keep up with demand for its cars, said Chief Executive Elon Musk last month.

Following Tesla’s lead, General Motors Co. and South Korea’s LG Chem are putting $2.3 billion into a nearly 3-million-square-foot factory in Lordstown, Ohio, highlighting opportunities for Canada to capitalize on the U.S. EV pivot as supply chains evolve, which GM says will eventually produce enough battery cells to outfit hundreds of thousands of cars each year.

In Europe, Volkswagen AG is taking a similar path, investing about $1 billion in Swedish battery startup Northvolt AB, including some funding to build a cell-manufacturing plant in Salzgitter, Germany, as part of a joint venture, and in North America, EV assembly deals in Canada are putting it in the race as well.

Others like Ford Motor Co. and Daimler AG are steering clear of manufacturing their own cells, with executives saying they prefer contracting with specialized battery makers.

Supply-chain disruptions, including lithium shortages, have already challenged some new model launches and put projects at risk, auto makers say.

For instance, Ford and VW have agreements in place with SK Innovation to supply battery cells for future electric-vehicle models. The South Korean company is building a factory in Georgia to help meet this demand, but a fight over trade secrets has put the plant’s future in jeopardy and could disrupt new model launches, both auto makers have said in legal filings.

GM executives say the risk of relying on suppliers has pushed them to produce their own battery cells, albeit with LG Chem.

“We’ve got to be able to control our own destiny,” said Ken Morris, GM’s vice president of electric vehicles.

Bringing the manufacturing in house will give the company more control over the raw materials it purchases and the battery-cell chemistry, Mr. Morris said.

But establishing production, even in a joint venture, is a costly proposition, and it won’t necessarily ensure a timely supply of cells. There are also risks with making big investments on one battery technology because a breakthrough could make it obsolete.

Ford cites those factors in deciding against a similar investment for now.

The company sees the industry’s conventional model of contracting with independent suppliers to build parts as better suited to its battery-cell needs, Ford executive Hau Thai-Tang told analysts in August.

“We have the competitive tension with dealing with multiple suppliers, which allows us to drive the cost down,” Mr. Thai-Tang said, adding that the company expects to pay prices for cells in line with GM and Tesla.


Meanwhile, Ford can leave the capital-intensive task of conducting the research and setting up manufacturing facilities to the battery companies, Mr. Thai-Tang said.

Germany’s Daimler has tried both strategies.

The car company made its own lithium-ion cells through a subsidiary until 2015. But the capital required to scale up was better spent elsewhere, said Ola Källenius, Daimler’s chief executive officer.

The auto maker instead signed long-term supply agreements with Asian companies like Chinese battery-maker CATL and Farasis Energy (Ganzhou) Co., which Daimler invested in last year.

The company has said it is spending roughly $23.6 billion on purchase agreements but keeping its battery research in-house.

“Let’s rather put that capital into what we do best, cars,” Mr. Källenius said.

 

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