Roads To Follow

May 1, 2023 | Industry

By Scott Robertson

We are all end-of-life vehicle recyclers, but every facility is run just a little differently. You need to choose that path that is best for yourself, your family, your employees, and your facility. No matter how you ride the wave, the future of our industry is bright.

If any of you are like me, I always stopped and watched MythBusters when channel surfing. We need to get that cast and do an episode on electric vehicles for our industry. Whether you doubt the existence of climate change, grid capacity, or have range anxiety, electric vehicles are going to be manufactured and sold in great numbers and eventually end up becoming an end-of-life vehicle that will be introduced into our business models in the future.

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I’ve been told that the average EV battery will last up to 10 years for use in an automobile as a traction battery. That same battery can be broken down and repurposed in many configurations, but most commonly utilized within energy storage systems for an additional 10 years. In the EV battery world, businesses that are identified as battery recyclers are synonymous to the shredders in our industry. These companies turn high voltage batteries into a black mass that is then refined into material that can be introduced into manufacturing new high voltage batteries. Our industry has always sold into the market that pays the most,

usually that is reuse, but it could be repurpose or recycling in the high voltage world.

I’ve just returned from an EV battery conference hosted by NAATBatt and interacted with every industry that plays a part in the manufacturing and handling of end-of-life high voltage batteries. Within the Inflation Reduction Act there are billions of dollars allocated to sustainable “clean” energy industries … and the high voltage battery industry is getting a great majority of the funding. There are lots of flaming hoops to jump through in order to qualify for this money, and as I write this, the Treasury Department is still trying to figure it out. After the dust settles, one thing that will remain certain, the OEMs want their batteries back, and that’s where our industry becomes involved in the high voltage supply chain. Harvesting end-of-life EV batteries is the missing link, not only in the supply chain, but also in the flaming hoops in obtaining the pot of gold from the U.S. government for the battery industry.

Most in our industry have had the most profitable two years in their business history due to COVID’s supply disruption, the U.S. government influx of free money, and inflation. It seems like during the last six months we have experienced a reset in business and returned to the daily grind. What’s the next event to alter our industry? I think it’s the electric vehicle, but we have options on how you want to approach the incoming wave and I believe there are three choices.

The first business model choice is to stay the course, ignore the wave and conduct business as usual. Most in our industry will take this approach, embracing the slogan that “if it’s not broken, don’t fix it.” There are 10,000 licensed businesses handling end-of-life vehicles and another 10,000 unlicensed that touch these vehicles in some manner. Somehow these businesses exist despite their outdated business models. We all know and interact with them. They are late to implement a yard management system, or neglect to have a storm water mitigation plan, report to NMVTIS, offer standard warranties. I could continue on, but you get my point. Vehicles that burn fossil fuels to propel themselves will be on our roads for a long time, parts will fail and most likely will not be available new and might be available aftermarket, but these parts will be available used.

The second business model choice is to adapt when needed. Most of you reading this will fall into this category. Run properly, our industry is profitable and allows owners to have a nice lifestyle. This is the safest course to take when encountering the impending EV wave. Our facilities and business models run really well on the product we presently dismantle. Our business models require that we are proficient in every make and model for sales and dismantling, not to mention in mechanical, body and electrical parts.

Our employees are expected to have this knowledge, but most of the time we get by with what little we know. How many of us are dismantling and storing high voltage batteries properly? We built warehouses to store engines and transmissions for resale. How many will remodel to handle and store high voltage batteries? How many of us will dismantle the high voltage battery pack that cannot be utilized for reuse and harvest the modules for resale? Some of us will be early adapters and reap profits, others might resist until the very end, leaving opportunities to others.

The last business model choice is to change your current business model to the EV wave. This is by far the riskiest path to take and I urge you to have all of your bases covered before jumping in … you might be diving into the shallow end of the pool. The battery industry needs us,

we have the end-of-life vehicles, the facilities to dismantle and harvest what they need and most importantly, the license to do it. Today, OEMs are looking into more vertical integration, which means playing ball with us. Implementing a slight change to your business model is hard with employees’ and customers’ resistance, just imagine doing a tear down and rebuild. While this is the riskiest and most difficult choice, it could be the most profitable. Remember, billions of dollars are on the table and we are the missing link.

I am fortunate to be a part of our great industry. We are all end-of-life vehicle recyclers, but every facility is run just a little differently. You need to choose that path that is best for yourself, your family, your employees, and your facility. No matter how you ride the wave, the future of our industry is bright.

Scott Robertson Jr. is President and Co-Owner of Robertson’s Auto Salvage located in Wareham Massachusetts. He is a graduate of Fordham University majoring in Finance. Scott is president of the Automotive Recyclers of Massachusetts, sits on the Strategic Advisory Council of Hollander and is a past President of ARA. Scott started working at Robertson’s in grade school, sold repairable wrecks in high school, was a buyer while attending college, managed the body shop and ultimately the yard after college. The business includes the Salvage yard, Body Shop, New GMC Truck Dealership and Real Estate ventures. Reach Scott at 508-595-9444, Ext. 136 or at jr@robertsonparts.com.

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