The chief executive officer of electric truck maker Rivian said the top hurdle to his ability to scale manufacturing is the availability of batteries. Simon Moores, Benchmark’s chief executive, told The Wall Street Journal that “It varies by region, but it’s important for people to understand that capacity isn’t a quality, reliable battery supply.” The existing supply is not enough to handle rising production at Rivian and its larger competitors, many of which are global manufacturers. As car companies ramp electric vehicle (EV) production, the supply trouble could get much worse.
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A recent New York Times article about Ford CEO Jim Farley pointed out that the success of Ford’s most important new vehicle, the Ford F-150 Lightning, will rely on its supply chains. William C. Ford Jr., the company’s executive board chair and Farley’s boss, commented, “If this launch doesn’t go well, we can tarnish the entire franchise.” One of the challenges is that the car industry does not have a large enough army of experts in auto software. Even if Ford can assemble a first-rate software team, it may be unable to produce enough Lightning trucks for the tens if not hundreds of thousands of units that could be needed to satisfy customer demand.

Shortages are not new to the car industry. In the past two years, the primary problem has been microchips. That problem has not gone away, which is another hurdle Ford faces. The F-series has been the bestselling vehicle in the United States for four decades. This means Ford has a rich supply of possible buyers. Taken together, there have to be millions of F-Series pickups on the road, which is a universe that cannot be matched by another manufacturer.

Nothing kills a car launch more than a problem supplying products to match demand. People become impatient. This not only causes a backlash for the company. It also means many potential buyers turn to alternative vehicles.

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Ford, one of the largest gasoline-powered car companies for more than a century, has its future riding on batteries.

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