Materials suppliers meet demand for EVs, ICEs amid shifting market

Detroit — Material and chemical suppliers are working to satisfy both EV and ICE requirements for OEM customers as the automotive industry shifts to an electrified market while recovering from supply chain challenges.

"The last three years have been historic for the turmoil," Dwight Morgan, executive vice president of marketing in international business and business development at resin distributor M. Holland Co., told Plastics News.

"Despite all the challenges of the last few years … the industry is also going through a remarkable transformation. … What you used to consider a pretty safe, established industry is suddenly one of the more dynamic industries," he said.

The near-term challenges in the supply chain, like winter storm Uri, which affected resin production in February 2021, have impacted M. Holland's operations, Morgan said, with automotive builds down significantly amid the ongoing chip shortage.

"The shortages that everyone encountered in 2021 after Uri woke the industry up to how vulnerable they are to single specifications," he said. "As a distributor, we don't have one resin reactor. We have dozens because we have a variety of products."

The company saw a lot of requests for redesigns and alternative products because of those disruptions, he added.

But longer term, Morgan said, "these companies are now electronic technology companies."

"You've got products being completely redesigned; the product requirements are different," he said of the EV market. "The amount of wire and semiconductors in these vehicles has increased exponentially."

This transformative period for the auto industry also includes lengthened life cycles for vehicles, said Matthew Zessin, automotive market manager at M. Holland. "Cars are going to be on the road a lot longer. If you add an extra five years of life to the vehicle, the interior is going to have to get a little stronger, more durable. With the onset of ride-share, you've got people in and out of backseats so there's going to be a lot more development."

Although build volumes are down, Zessin added, "the amount of plastic that's going into a vehicle is actually increasing. Back five years ago, it used to be 400 pounds [of plastic] per vehicle, now you're over 700 [pounds of plastic per vehicle.]"

"A lot of the requirements are smaller quantity," Morgan said. "That plays right into our wheelhouse as far as logistics and stocking. A lot of these new entrants need a lot of help with material specifications; they don't necessarily know plastics.

"You used to be able to rely on your relationships with established internal combustion, legacy [OEMs]," Morgan said. "It is a totally different world today. You have to satisfy [legacy customers] and also sort out what's going on in this new dynamic. And not all [startups are] going to make it probably.

"We sit right at the nexus between the suppliers and [OEMs]," he said, adding that M. Holland acts as a consultant on material options, design requirements like sustainability, lightweighting and flame retardance.

Often, EV startups don't have their own specifications for materials and will get ideas from a traditional OEM or tiered supplier that is making a similar product, Michael Gumbko, automotive strategic account manager at M. Holland, told PN.

But startups and legacy OEMs don't "have to be pigeonholed" into using a material "just because [the industry has] been using this for 30 years," Gumbko said. "We want to offer solutions … so it's definitely more of an open book and we can help drive … the right specifications around materials."

OEMs also have to balance moving with the industry's shift with keeping their consumers happy.

"For the OEMs, it's challenging," Gumbko said. "It's not going to be like a light switch. … They need to keep making combustions until [demand for EVs] picks up, and it's still consumer-driven at the end of the day.

"A lot of traditionally bigger [suppliers] that make applications for combustion engines, engine covers, [demand for those products] will be going away," he said. Some of that production will move toward EV battery covers and other electric-related products, Gumbko said, "so they can continue to have a viable business and be a part of this change."

"We're in the midst of a profound transformation, future-proofing the Jeep brand," Jeep CEO Christian Meunier said at the North American International Auto Show in Detroit. "We're leveraging electrification as an amazing opportunity that reinforces our Jeep DNA, while supporting all the efforts to protect our planet for the generations to come."

"There's a whole new lexicon developing in every performance — range, charging speed — all of those sorts of things," Scott Bell, vice president of Global Chevrolet, said at the Auto Show. "There's a broadening definition of performance. … We've got customers that are ready. We have dealers that are ready and we've got a manufacturing supply chain distribution and sales organization that is ready to bring these products to the market."

Despite caution from OEMs around using new materials for EV applications, Zessin said, automakers are still moving toward engineered resins "where they can; a lot of that's through lightweighting."

"We can present what [materials] we think work, but [OEMs will] always have the final say," Gumbko said. "At the end of the day, they're on the line for liability. ... If something happens and someone dies, the lawsuit goes to the OEM."

The automotive industry is still working to find "the sweet spot in terms of cost savings and safety," Viraj Shah, market segment manager for eMobility at BASF, told PN at the auto show.

Because safety is the OEM's first priority, BASF has regular interactions with regulatory bodies to understand the "ever-changing" requirements for EV battery safety.

"There's a perception of plastics in the general automotive industry, which is well known for steel and aluminum," Shah said. "[The industry has] had a 100-year run with steel and aluminum, whereas plastics are only 30 years mature when it comes to superhigh-engineered materials.

"Depending on the application … the performance is similar; sometimes plastic performs better," he said. "Generally when you bend it, it takes a lot of strength to bend it, then it stays bent. Plastic either breaks or bounces right back. There's a lot better dimensional stability than metal. … With chemistry, you can solve a lot of problems the industry has.

"We found it challenging to get the initial commitment [from OEMs] to at least look at plastics to replace metals with us," Shah said. "Once perception changes about plastics compared to metals safety-wise, that will move the needle" for more plastic applications in EVs and their batteries.

Examples of award-winning plastic components from BASF and its partners, like the Toyota Tundra composite seatback and the Jeep Grand Cherokee L. composite tunnel reinforcement, which each won Altair Enlighten Awards the last two years, are making those conversations easier, Susan Jackson, head of communications at BASF, said.

"We've developed solutions that exceed the properties of metal in those applications from a structural stability standpoint and flame retardant standpoint," Shah said. "Thermal properties and potential flame or thermal events, those safety issues really deter people from buying EVs.

"The [flame retardancy] requirements … are only increasing via SAE and other specification and regulatory bodies," he added. "These materials self-extinguish.

"The past few years, big companies like Tesla, Ford and GM have come out with a bunch of different EV models," Shah said. "Their goal was to be first to market. They wanted to release their cars and start getting visibility in the consumer market.

"They weren't really thinking about cost; they weren't really thinking about lightweighting, which is one of the most important things. They were thinking about safety, but safety requirements, as we learn more about EVs, are changing," he said.

Now that OEMs are working on second- and third-generation battery packs, they have an opportunity to find cost savings through materials, Shah said. "It's not just weight savings you can achieve by using plastics; it is processing costs savings, raw material savings as well."

Even the most expensive plastic composite is still cheaper than metal, per pound, he said.

"Metal stamping and casting is expensive," Shah said. "You might think that initial investment in injection molding or compression mold for plastics is expensive, but the break-even period between metals for a module housing vs. using plastics is shorter.

"Equipment for casting and stamping and metal procurement is more expensive than pretty much all of the plastic counterparts," he said. "Generally, companies that want to get into plastic injection molding have existing injection molds. … They already have the capital in their plants and the additional investment needed to process plastics that have higher requirements than traditional ICE plastic … is not that high."