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Plans brewing for Australian gigafactory and A-EV manufacture

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A new company headed up by the former head of climate change at PwC Australia has revealed plans to mass-produce autonomous electric vehicles, and potentially build a battery gigafactory, on Australian soil within just a few years.

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The ambitious plans were revealed on Monday by Michael Molitor – the CEO at A-EV start-up A2emCo who, as well as an impressive academic record has notched up 18 years in the private sector at BP, McKinsey and the OECD.

Speaking at the Innovation in the Energy Sector conference co-hosted by RenewEconomy in Sydney on Monday, Molitor said A2emCo aimed to be rolling out almost completely Australian made, level 5 autonomous vehicles by 2020.

“(Level 5) means, you’ve got an app on your phone, you subscribe to the service, the car shows up to your house, or your apartment, there’s a cyber security system that IDs you, the door opens and says ‘good morning’ …the door closes, you’ve got 5G connectivity, it says you’re going to be in the office in the CBD in 17 minutes.”

But before you scoff, he also concedes that in 2020 the cars’ autonomy function will not be switched on; the timing of that will depend on the timing of the switched on consumer, and of course when the regulatory framework is ready.

So the car that rolls off the line in 2019-20, will be an EV, Molitor says – “a super sophisticated EV.”

“Our vehicle is already designed, it’s in prototype, we’re building six evaluation prototypes … they’re not being built in Australia, for a variety of reasons, but we will be moving production here,” he said.

“We’re looking at Q4 2019, Q1 2020, we’ll have vehicles on the road in Australia. And we like to under-promise and over deliver, so it may be better than that.”

And to power these super-sophistocated EVs, Molitor says his company is also looking at building Australia’s own energy storage giga-factory, such as is currently being completed in the US, by Elon Musk’s Tesla.

Indeed, he says A2emCo has already consulted with Peter Carlsson, Tesla’s former Tesla head of operations who built the gigafactory in Nevada, and is now building a gigafactory in Sweden.

According to Carlsson’s own estimations, Molitor told the conference, to meet soaring global battery storage demand, the world’s going to need between 120-150 gigafactories by 2020, 2030.

“So there’s going to be a gigafactory in Australia; there’s going to be gigafactories in Australia… And we’re looking at whether we do that, or we help somebody do that. That has to happen and it will happen,” he said.

If it sounds ambitious, that’s because it is. But as Molitor tells it, it’s all going to happen, it’s just a matter of how quickly we get there, and who gets in at the bottom level.

“If you don’t play in storage, you’re going to be left behind. Our approach to thinking about vehicles and batteries is based on overall resource productivity,” he said.

Molitor also added that the economics of new, and current industries need to be re-assessed, because the metrics currently used are all wrong.

“To be economic, the value of the outputs has to be higher than the value of the inputs,” he said. But all inputs had to be measured, that includes energy and resource availability, and not just cost of capital and labour.

Molitor says the current global automotive sector is currently one of the top four “dumbest” industries in the world – alongside the thermal energy generation industry and the beef industry – in that it operates on a completely uneconomic model.

A2emCo’s factories, he says, will tap advanced manufacturing platforms being developed by Siemens and will focus on reducing costs all along the production line, even by keeping the lights off on the factory floor.

It also wants to tap local suppliers, labour and materials.

“If you’re going to think about doing crazy things in Australia, first thing you do is run around and look at what you’ve got in your own backyard.

“We want to create an entire AEV ecosystem in Australia, with Australian suppliers.

“There are a bunch of (Australian) companies doing these things, but none of them are at scale in the absence of a big buyer like us.”

Other musts are to use 100 per cent renewable energy to make and do everything, including recharging batteries.

“That’s fundamental,” Molitor said. “If you’re using fossil fuel energy, you’re absolutely wasting your time.”

And finally, the company hopes to “finance everything” with Australian investors and Australian money.

So far, A2emCo has been funded with equity from “friends, fools and family,” Molitor says, adding that the company also has more than 100 unsolicited proposals for investment.

“At the same way we’re capturing advances in technology, we’re also trying to harness radical changes in the way things are funded.

“We’re quite confident.”

But there are hurdles, Molitor adds, one of the biggest of which will be consumer acceptance.

“We have heads-up display that looks like a jet fighter, so we’ll get all the car monkeys, but will we get the mums?”

“There’s some hesitancy about all of that, but it will be about how we ramp up.”  

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  • howardpatr

    HOLD ON – this company should be talking with 24M; last year the company provided its battery to NEC for further evaluation.

    24M believes their company”s technology may see the end of battery MEGA-FACTORIES.

    Just saying it would be worth your while thoroughly researching 24M and, I suggest, talking with Dr. Yet-Ming Chiang, CHIEF SCIENTIST & CO-FOUNDER of 24M, Mr Molitor.

  • Ian

    Sounds a great plan. A new generation of Aussie vehicles is badly needed.

  • DJR96

    The vehicles side of things is ambitious, but I wish it all the best.

    The battery factory side of things is screaming out to happen ASAP. There will be massive demand for them and high volumes very quickly if they get it right. This alone as a business model should stand tall.

  • Ian

    A factory needs a few things to be developed. The infrastructure like roads, electricity, water, access to raw materials, an employee base, a building, machinery, and a market. For a giga-factory style business you’d probably need government support in terms of legislative and logistical support. Some sort of help to get the Bloody big building constructed ASAP.

    Instead of putting all our eggs in one basket, as a nation we could construct a gigafactory equivalent at each major city, perhaps a battery and vehicle manufacturing park with invitations to a number of prospective battery manufactures to set up shop.

    There may be value in manufacturing batteries in Australia and offering partnerships with our favourite vehicle brands to use these batteries, or even to set up their own battery manufacturing facilities here.

    The only impediment to purchasing an EV instead of an ICE is price. We need to give this industry a hand-up, but this should not be an indirect subsidy to manufacturing on foreign soil, but rather some sort of support as outlined above.

    • Brian Tehan

      There will be a few vacant car manufacturing facilities available in the very near future, as well as a skilled workforce who no longer have jobs and a significant base of vehicle design skills and spare parts manufacturing. If this entrepreneur could leverage some of these resources, he might be onto something. EVs don’t need all the complex technology associated with engines, gearboxes and drivelines. Australia could do very well in this technology.

      • Mike Shackleton

        The complexity comes in the coding and algorithms for self driving aspects, battery/charge management etc. For self driving, level 5 vehicles as discussed here, you don’t tend to worry about the styling or performance, just that it turns up on time and gets you where you need to go without crashing

  • Diana

    Oh please, this guy just sounds like an another equity company tuff guy- come in, buy up, slash, burn. Think its ok cause its associated with renewables? This is an area we don’t talk about – is it ok to have the same old business ethics, and all the probs it causes, if its about renewables? Some may answer “yep, we’ve run out of time to address climate change”, well, we don’t take the time to consider who gets a lot of these benefits and who doesn’t and won’t for far too long, either. I’m over hearing solar is installed most in lower socio economic mortgage belts – good luck if you can afford a mortgage now to fit those arrays and power those EVs, because we don’t create alternatives for those who can’t. Saving the world is about a lot more than some desk/plane flying corporate [raider?]…and even Elon Musk doesn’t talk like this guy.

  • Richard

    This guy is doing an Elon Musk impersonation! It’s sounds too good to be true. Alarm bells

  • Simon

    Chile is the world’s second largest supplier of lithium – the key enabling raw material in lithium batteries. It is using its leverage in an extremely tight supply chain to encourage companies involved in battery manufacturing to invest their money and expertise in adding value to Chilean lithium in Chile. Here is a link to a story on this – however unfortunately it is behind a paywall https://www.ft.com/content/583cfd8c-202d-11e7-b7d3-163f5a7f229c

    Does anyone want to hazard a guess as to which country is the world’s largest lithium supplier and is also adding more lithium extraction capacity faster than any other country in the world? (Hint: you’re sitting in it…if you are in Australia).

    Anyone want to hazard a guess as to what Australia’s approach is to returning maximum value from its non-renewable lithium assets in a world where it essentially controls the battery supply chain at this point in time?

    • OG Dave W

      Sell it to China?

      • Chris Fraser

        … and will we need a stranded railway line to cart it to a port – so we can sell it to China ?

        • Simon

          No. But our lithium will be turned into batteries in China / Japan / South Korea / USA that we will buy back to replace coal jobs in Australia. The thing is, the number of lithium jobs required to do that will be comparatively less than the number of coal jobs lost.

          Call me crazy, but I would have thought it would be better to return as much value as possible from the lithium assets by value adding here in order to offset those coal job and export dollar losses.

          • Chris Fraser

            Clearly the Australian technical expertise and will is there, but we have an unfortunate habit of requiring high salaries for process work.
            But nevermind, the extraction of lithium is not as toxic as that of coal. Public health is about to improve exponentially.

          • Simon

            Chris, forget the perception of high salaries, etc. We are competing against governments who understand the strategic importance of the battery industry and are providing significant support to their local industries. US$1.5bn in tax breaks to Tesla for their Gigafactory. China provides a range of support mechanisms. Even Malaysia offers 10 year tax holidays to strategic industries and is courting Australian companies. Now Chile is getting in to the game as well.

            But Australia?

          • Chris Fraser

            Indeed a troubling conspiracy … I’m concerned that taxpayers will end up bearing the load of raising revenue for its half-witted Treasury offices.

          • Simon

            Well, unfortunately that is the playing field we are competing on and it is the playing field on which I have first hand experience.

          • Simon

            but every negotiation is different – and in the end it comes down to what you have to offer – or not offer.

          • MaxG

            I wish they were half-witted… they are as dumb as batt sh..stuff. They’ve sold out the public a long time ago. And then, Aussie are voting for them, which tells you another story.

      • Simon

        Spoken like a true blue Australian

        • OG Dave W

          Aussies just want to make a quick buck without having to think long term. Heck, even our government doesn’t think long term.

  • OG Dave W

    Please make it happen and give Australia a proper automotive industry that doesn’t depend on foreign overlord.