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Thanks for reading Hyperdrive, Bloomberg’s newsletter on the future of the auto world. Read today’s featured story in full on our website here.
The Human Toll of Cheaper EV Batteries
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Early in the morning last Christmas Eve, Chinese and Indonesian workers prepared for a maintenance operation at the Indonesia Morowali Industrial Park, a complex of factories, smelters and power plants on the island of Sulawesi that belches particulates into the tropical air. The bulk of IMIP’s tens of thousands of employees live just outside its walls in a hastily built city of plywood and sheet metal shanties. The workers had been tasked with fixing a submerged arc furnace, which melts nickel ore at temperatures around 1,400C (2,552F). Over time the residue of this process, known as slag, can build up, and the furnace overheats. On this day the plan was to replace heat-damaged bricks in the inner chamber and remove slag. With the furnace turned off, a technician began slicing into its steel shell with a flame cutter, to allow access to the interior. But someone had miscalculated: The slag inside hadn’t cooled enough. In fact, it was still molten. The slag surged out from the cut, and the wall of the furnace collapsed. According to people familiar with the incident, who asked not to be identified discussing nonpublic information, acetylene canisters left nearby — used to fuel the flame cutters — started to explode from the surging temperature. The workers trying to contain the damage were hamstrung by communication difficulties, with virtually none of the Chinese staff able to speak fluent Indonesian, and vice versa. As the sun rose, flames licked at the exterior of the factory building, which billowed with dark smoke. Workers tried frantically to aid their colleagues, many of whom had severe burns. Screaming for help, one group hoisted a blood-covered man into the bed of a pickup truck, which was already crowded with other victims. The onsite medical clinic was overwhelmed: Still in their tan uniforms, injured men lay on the floor, crying out in pain as nurses attended to those they could. By early afternoon, a dozen employees were confirmed dead, with many more in need of intensive care. The toll would soon rise to 21 men: 8 of them Chinese, 13 Indonesian.
An aerial view of the Indonesia Morowali Industrial Park. Photographer: Muhammad Fadli
Over the past decade, Sulawesi and other Indonesian islands have been transformed into hubs for mining and processing nickel. The metal is a crucial component for making stainless steel, the purpose of the facility where the explosion occurred. It’s also essential to many electric-vehicle batteries. The government of outgoing President Joko Widodo, who’s better known as Jokowi, has enthusiastically promoted the nickel industry’s growth, seeing a chance to put Indonesia at the center of global supply chains — and to create employment for the country’s roughly 280 million people. Controlled by Chinese metals giant Tsingshan Holding Group, IMIP is the product of more than $30 billion in investment. Sprawling across what was once a plain of farmers’ fields and fishing hamlets on Sulawesi’s eastern shore, a short distance from nickel-mining concessions that dot the surrounding hillsides, it boasts its own seaport and airport, along with a resort-style hotel for visiting executives. IMIP has created immense numbers of jobs, with more than 100,000 employees and contractors, and accounts on its own for a major percentage of Indonesia’s exports of nickel suitable for batteries. Overall, the nickel industry has helped deliver rapid growth for Indonesia’s economy, the largest in Southeast Asia. That success has a dark side. December’s fire was the worst in a long series of fatal accidents at IMIP and other Indonesian nickel sites. Workers have been buried under slag, crushed by heavy equipment and killed in falls. In surrounding communities, residents complain of respiratory ailments that they blame on pollution from smelters and the coal-fired power plants that sustain them. And environmentalists accuse the nickel industry of flouting regulations intended to protect ecologically sensitive islands such as Sulawesi — while expanding production of a material critical to the EVs that Western governments promote on environmental grounds. In most cases, auto manufacturers don’t directly source battery materials, and it’s difficult, if not impossible, to trace the metal in a given car to a specific nickel facility. But an extensive review of Chinese, Indonesian, South Korean and US corporate filings by Bloomberg Businessweek, as well as interviews with industry experts, shows that nickel from IMIP is present in the supply chain that feeds virtually every major seller of EVs. — By Matthew Campbell and Annie Lee - Read Bloomberg’s latest Big Take.
- Listen to the Big Take Asia podcast episode.
- Watch: The Dirty Secret Behind Electric Cars.
Fisker CEO Henrik Fisker showing an off-road version of the Ocean SUV in August. Photographer: Frederic J. Brown/AFP via Getty Images
Fisker filed for bankruptcy on Monday, months after the electric-vehicle startup stopped production of its only model, the oft-malfunctioning Ocean SUV. Whereas Henrik Fisker’s first plug-in car company was undone in large part by the failure of its battery supplier, his second venture broke down due to internal shortcomings. Initial Ocean sport utility vehicles lacked basic features including cruise control, and over-the-air software updates only went so far to address the SUV’s many bugs. Read more in the Wednesday edition of Hyperdrive.
Ferrari CEO Benedetto Vigna. Photographer: Hollie Adams/Bloomberg
Even as Ferrari races to unveil its first fully electric model late next year, CEO Benedetto Vigna will push ahead with his strategy to innovate with new technologies while remaining open to an array of solutions, he said in an interview for Bloomberg’s Italian-language podcast, Quello Che i Soldi Non Dicono. It’s a delicate balance for the carmaker, as younger buyers skew electric but many established clients are loath to give up Ferrari’s trademark roar. “Some would-be customers tell me that they’d only join the Ferrari community if they could buy an electric,” the CEO said. Others say “they would never purchase an electric Ferrari.”
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