3M's next mission: Extending the travel range of EV batteries
Published in Automotive News
Pick any electric vehicle on the street. From the battery pack to the panel display, 3M's products are all over it, even if you won't find the company's logo anywhere.
The company is leveraging its history in the auto industry to get a slice of the fast-growing electrification market. Carmakers come to the seasoned Maplewood-based conglomerate for materials and technology to improve travel range on batteries, among other challenges. Without improved efficiency and lower price tags, the transformative promise of EVs will likely fizzle.
Auto electrification is now a $500 million business for 3M after sales leapt 30% last year. CEO Mike Roman has repeatedly touted the segment as a high-growth area to focus innovation.
It's a bright spot for a company facing challenges on multiple fronts — from expensive litigation to job cuts to environmental regulatory actions — while 3M's stock value and overall sales fall.
"The electrification of transportation is a disruptive trend. And there's a lot of projections on how it's going to play out," Roman said at an investor conference in February. "A lot of innovation is going to come to bear on this. So we see opportunities. We see this as a growth opportunity."
And as 3M spins off its health care business — which accounts for a quarter of yearly sales — auto electrification could become a larger, and growing, portion of the company's remaining revenue.
3M has been in the auto business for more than a century and supplies numerous parts for gas-powered vehicles and their manufacturing lines. As more electric vehicles are sold, fewer combustion models will be made, making 3M's pivot toward the EV market all the more important.
Demand for electric vehicles in Europe and China is driving growth, according to the International Energy Agency, which predicts 200 million EVs on the road by the end of the decade. There were more than 16 million in use globally in 2021.
"In the near future, EV delivery delays to customers may dampen sales growth in some markets," the group wrote in a report last year. "But in the longer term, government and corporate efforts to electrify transport are providing a solid basis for further growth."
In the U.S., some electric vehicles are now eligible for a $7,500 tax credit. Cox Automotive predicts the U.S. will see a record 1 million electric vehicles sold this year as more automakers roll out electric models.
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