Autonomous Driving, Connectivity, Electrification of Vehicles, and Shared Mobility (ACES)
Tesla is now the fifth-most-valuable company in the S&P 500, overtaking Facebook at that position. Cars that connect to each other and the road are here to stay. Connected features like navigation, internet, apps, driving controls are no longer luxury items, but standard features. Models like Cadillac’s 2021 Escalade offers Super Cruise, a hands-free driving experience. Five hundred shared vehicles can take the place of thousands of privately-owned vehicles, staying in motion in major cities. If recycling is cool then clean is even cooler. What do these mega-trends mean for automotive recycling? Rather than fear the future, we need to embrace the future because it means opportunity for all of us.
The Industrial Revolution 4.0
The industrial internet of things refers to interconnected sensors, instruments, and other devices networked together with computers’ industrial applications, including manufacturing and energy management. This network of connected devices that send and receive data is the cornerstone of what is called the fourth industrial revolution. Digitization gives auto manufacturers a way to optimize manufacturing and have constant feedback throughout the life cycle of the vehicle. It also means that the cost of the vehicle is no longer limited to the build but tied to the lifetime value of the vehicle with real-time application solutions being employed.
With vehicles running over 150 electronic control units (ECUs) and nearly 300 million lines of code by 2030, this alone represents critical technology materials that will need to be reclaimed. At United Catalyst Corporation, we already have a processing line for ECUs. Recyclers are cashing in on those ECUs that are considered scrap value and not for remanufacturing or resale.
The Weakening US Supply Chain of Critical Materials
The COVID-19 induced semiconductor shortage, made worse by the cold snap in Texas, forced auto manufacturers to cut back production and leave the entire global electronics supply chain in the hands a few manufacturers, mainly in Taiwan. The average automobile contains dozens of the integrated circuits, controlling air bags, power windows, catalytic converters and dashboard displays. The new Administration is reviewing potential weaknesses in US supply chains for four vital products—semiconductor chips, large-capacity batteries for electric vehicles, critical minerals, and strategic materials such as rare-earth elements. All four of these products can be found in automotive recycling.
In June 2011, Mark Caffarey, now President of Umicore USA Inc., a global material technology company, responsible for the coating of nearly one-third of all automobile catalyst, testified before the Senate Subcommittee on Energy & Natural Resources,
“If the United States committed itself to meeting its critical materials needs in large part through recycling, there is no nation on earth that could match American resources. The United States has the largest “aboveground” mines of critical materials in the world, in the sense that this country’s supply of industrial scrap and end-of-life automobiles, electronics, and electronic appliances…can’t be matched by any other nation. In essence, these “above-ground mines” make the United States the Saudi Arabia of critical materials. A well-developed recycling system could tap these mines for U.S. critical materials security without limit.”
Already, as an automotive recycler, you are harvesting the precious metals from scrap catalytic converters and electronic control units (ECUs) with hybrid battery materials and rare-earth-containing magnets becoming emerging markets.
The Next Commodity Super-Cycle
A super-cycle is an extended period during which demand for specific raw materials drives prices well above their long-run trend. Both Goldman Sachs and Bloomberg have alluded to a bull market in commodities. Copper, platinum, rhodium, and natural gas may be the next commodity super-cycle. The new super-cycle will be driven by the post-pandemic recovery, massive stimulus spending, rising inflation, growth in China, more aggressive environmental policies, and a deteriorating U.S dollar. Platinum has rallied to six-year highs, pulling palladium with it. Copper has hit its highest levels since 2012. Rhodium hit its highest level in history at a spot price of $29,000 in March. Again, automotive recyclers are cashing in on scrap catalytic converters, harness wire, and the like.
Getting the Most from Your Commodities with a Process You Can Trust
You own an “aboveground” mine. Your commodities include precious metals from scrap catalytic converters, oxygen sensors, semiconductor chips and ECUs; rare earth materials from magnets; critical materials from hybrid batteries such as lithium, nickel, cobalt and graphite. At United Catalyst Corporation we are on a mission to deliver recycling solutions that generate more profits for the companies that work with us. We accomplish this through serving the needs of our clients with accurate, reliable, and scientific processes. We strive to uphold the highest ethical standards displayed in our core values and operational practices. We are working diligently to bring you programs and tools that will help you do just this, increase your profits.
If you have questions about this article or any issue pertaining to the recovery of precious metals and materials from automotive recycling, we, at United Catalyst, are here to help you. Recycling is a journey. We hope you will rely on us at United Catalyst to be your guide.
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Becky Berube serves the recycling community as President of United Catalyst Corporation, Co-Chair of the Automotive Recycling Association’s Events Advisory Committee, and is an ExCom Board Member of the International Precious Metals Institute. She can be reached at 864-834-2003 or by email at firstname.lastname@example.org.