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Magnesium shortage: How it will affect new-car delays in Australia

A shortage in magnesium – and the aluminium products made from it – is yet to be felt in Australian new-car showrooms, say experts. But they are bracing themselves for another slowdown. Here’s why.

Executives at Australia’s biggest car companies say it is too early to determine what impact a recently-announced shortage of magnesium will have on new vehicle delays.

However, representatives for the Top 10 car brands sold in Australia said they are bracing for the worst – even though they are yet to be advised about any further stock shortages.

The car industry has been grappling with chronic delays in new vehicle deliveries during the pandemic due to a global shortage of semiconductors – which are crucial to the production of motor cars, computer equipment, and smartphones.

The semiconductor industry has struggled to keep up with demand after economies around the world bounced back faster than expected from COVID lockdowns.

The semiconductor industry has not been able to respond quickly enough because it takes 26 weeks (or half a year) to make one semiconductor from start to finish – and a new factory would cost in excess of $7 billion and take 18 months to build.

Every major car company has outlined delays of between three to six months for most popular models, with some waiting times – such as for the Toyota RAV4 Hybrid – stretched to 10 months.

The few exceptions are a small number of less popular vehicles that have weak demand.

Since reports of a magnesium shortage in Europe and China surfaced late last week, executives at Australia’s biggest car companies say they are yet to be advised about any delays specifically related to the new production crisis.

“As far as we’re concerned, semiconductors remain the biggest choke point in the supply chain for new cars,” said one senior car company executive who asked to remain anonymous.

Another executive, also speaking on condition of anonymity because the car company they work for was yet to announce its position or discuss the matter internally, said: “It’s too early to tell. But if the reports coming out of Europe and China are accurate, there’s a chance (the new-vehicle shortage and lengthy delivery delays) will continue well into the middle of (2022) or beyond.”

Late last week, European associations that represent the aluminium industry issued an “urgent call for action” against the “imminent risk of Europe-wide production shutdowns as a consequence of a critical shortage in the supply of magnesium from China.”

The peak aluminium industry body in Europe explained magnesium is “widely used in the metals-producing industry.” 

“Without urgent action by the European Union, this issue, if not resolved, threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that rely on them,” the European steel association said.

“Due to the Chinese Government’s effort to curb domestic power consumption, supply of magnesium originating from China has either been halted or reduced drastically since September 2021, resulting in an international supply crisis of unprecedented magnitude.”

The European industry body said the European Union is “almost totally dependent on China (at 95 per cent) for its magnesium supply needs … with far-reaching ramifications on sectors such as automotive, construction and packaging.”

The post Magnesium shortage: How it will affect new-car delays in Australia appeared first on Drive.

Synthetic fuels could extend life of petrol cars

Some European car manufacturers are betting on synthetic liquid fuels to keep internal combustion engines in the race longer, but industry experts warn this is no silver bullet.

Synthetic fuels – which Porsche claims can be completely carbon neutral – could power internal-combustion cars well into the next decade.

The German sports manufacturer has committed to a new synthetic fuel plant in Chile which will run on wind power, countering criticism that the energy it takes to manufacture synthetic fuels negates its advantages.

As with BMW, which made a similar investment through start-up Prometheus Fuels last year, Porsche says carbon-neutral synthetic fuel will complement the electric vehicle strategy by ensuring cars already on the road are powered by a smaller carbon footprint.

In theory, synthetic fuels could eventually be a direct replacement for petrol and diesel, but in current form, they need to be mixed in with fossil fuels, in much the same way as ethanol is.

Carbon-neutral synthetic fuels could support petrol engines into the next decade

Although burning synthetic fuels will produce carbon emissions, these should be cancelled out by harvesting that carbon to produce more synthetic fuel.

But the cost of producing synthetic fuels – expected, at least initially, to be between $4.50-$7.50 per litre – is suggested by motoring analysts as a reason to temper excitement.

Synthetic fuels are commonly made by combining carbon dioxide from the environment with hydrogen from water in an expensive, energy-intensive process with inefficient yield ratios.

International Council of Clean Transportation research shows 48 per cent of energy used in production of synthetic fuels is lost in the conversion process, with 70 per cent of energy in the fuel itself lost during combustion in the engine – a 16 per cent total efficiency.

The high cost of synthetic fuels may be a challenge to uptake

In contrast, most of the energy used by electric vehicles powers the wheels with 10 per cent lost to charging and 20 per cent by the motor, for a total efficiency of 70 per cent.

The energy costs of synthetic fuel production combined with transport and expensive equipment could diminish their value proposition, but Porsche Vice-President, Dr Frank Walliser, says the marque’s Chilean plant – powered by a wind turbine – as well as lower taxes and charges could be a game changer.

Dr Walliser says as fossil fuels in Europe become more expensive with the introduction of carbon pricing and energy taxes, Porsche’s synthetic fuel will offer even more value.

The Chilean plant is scheduled to open in mid-2022 with Porsche to use the 130,000 litres of synthetic fuel expected to be produced in the first six months for its motorsport activities.

The post Synthetic fuels could extend life of petrol cars appeared first on Drive.

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