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If one more person utters the phrase “supply chain,” I may simply wither away on the spot—but unfortunately, this is the world in which we live. We’ve built a very complex web of commerce in the 21st century (a lotta strands in old Duder’s head), and it’s not always obvious which strands are connected until one breaks. Nothing like a once-in-a-century pandemic and Europe’s largest war since 1945 to really stress-test the system.
Especially against the backdrop of climate change, the challenges of the 2020s have laid bare the deficits in our trade infrastructure. One possible solution, usually used in reference to agriculture, is increasingly becoming a trend in the tech world: buying local.
Take the electric vehicle industry. Executives like Rivian CEO RJ Scaringe warn that EV makers will soon face a dire shortage of the lithium-ion batteries needed if electric cars are to become as ubiquitous as hoped. Even before Russia’s invasion of Ukraine (which has one of the world’s largest lithium reserves), lithium prices were skyrocketing due to growing demand for batteries. Now, nobody wants to deal with Russia, a major exporter of the mineral. Mining lithium is often a carbon- and water-intensive proposition, while shipping it from abroad adds even more to your carbon footprint (meaning your newly-appointed chief sustainability officer is going to have a conniption). This combination of economic, environmental and logistical headwinds has gotten so bad that Elon Musk wants Tesla to start mining its own lithium.
And Elon’s not alone. Yesterday, I wrote about a new company, Statevolt, that wants to set up a battery gigafactory on the shores of the Salton Sea in the Imperial Valley. The idea is to partner with Controlled Thermal Resources, a lithium extraction and geothermal power company operating in the region, to secure its lithium from a single vendor just down the road.
Statevolt founder and CEO Lars Carlstrom says the plant constitutes the battery industry’s first “hyperlocal” supply chain, and it’s hard to overlook the benefits that the arrangement would give Statevolt. Shipping costs—both in dollars and in carbon emissions—would be dramatically reduced. Intermediaries and middlemen would be removed from the financial picture. Communication between the supplier and the manufacturer becomes simpler. The company is more insulated from natural disasters and geopolitical events. Just like choosing local produce reduces carbon emissions and supports a network of small businesses, so too does creating local supply chains for batteries, solar panels and other clean technologies.
To be clear, this isn’t an anti-globalization manifesto. Humanity is an interconnected global species and the climate emergency will impact every inch of the planet; to solve the problem, we’ll need to cooperate globally. But we may also have to unlearn a few of the habits that got us here in the first place. Outsourcing everything to the lowest bidder has been the global supply chain’s modus operandi for the last 40 years. To solve our current challenges, we may need to try something different.— David Shultz
Superjoi’s platform lets creators give their fans ways to support their projects—and allows supporters to reap financial rewards, too.
Long Beach-based reusable rocket startup Rocket Lab has inked a contract with satellite company HawkEye 360 to launch three payloads into space beginning as soon as December.
TikTok is continuing its foray into the music industry by testing a new sound-editing app for musicians and creators called Mawf.
Mexican fast food chain Chipotle has launched a new $50 million venture fund aimed at early-stage restaurant technology startups.
On this episode of the LA Venture podcast, Trousdale Ventures' Jonathan Hung discusses his latest funds, manufacturing partners and the importance of networking.
What We're Reading Elsewhere...
- Activision Blizzard gets investors' lawsuit tossed by a California judge.
- Entertainment platform MetaMedia announces Premiere Cinemas and Fridley Theater will join its network.
- Indoor horticulture company VIVOSUN unveils its latest generation of proprietary smart technology.
- Long Beach's 'Space Beach' program receives $1.6 million grant to help local youth explore careers in aerospace.
- Gardena-based GrayMatter Robotics wins a Robotics Business Review innovation award.