Sales of electric vehicles set to overtake traditional vehicles by 2033, creating $150bn investment gap to support charging infrastructure, battery development and recycling – Linklaters report

  • $80bn investment is required to develop global ultra-fast electric vehicle charging infrastructure
  • Significant power storage capacity of used EV batteries to create new secondary market worth over $24bn by 2030
  • Commercial opportunities will be driven by evolution in law, regulation and policy

A new report by Linklaters, the global law firm, has found that the fast-increasing demand for electric vehicles (EVs) will mean that sales of these will overtake that of combustion engine vehicles potentially as early as 2033. In its new report, ‘Powering the Future’, Linklaters predicts that the massive increase in demand for EVs will create a significant investment gap across the lifecycle of EV batteries, from production, charging and reuse.

For investors, there will be new opportunities in the development of next generation EV battery technology, as well as in the mining sector to help ensure sufficient nickel, cobalt and lithium availability for EV battery manufacture. The report also highlights the significant opportunity for the infrastructure sector to build sufficiently dense networks of charging stations to ensure EV drivers can recharge where and when they need to. Finally, the report outlines the creation of an effectively new sector: recycling and reuse. As the market for EVs grows exponentially over the next decade, there will be extraordinary commercial opportunity in ensuring EV batteries are recycled for their component materials or re-used in other contexts after their in-car life.

The report highlights potential investment opportunities of $150bn globally in the infrastructure, mining and recycling sectors alone.

The combination of falling battery costs and increased EV range will, according to Linklaters, create a step change in EV adoption. The demand will place pressure on the infrastructure industry to quickly develop ultra-fast EV charging networks. At present China, the world’s largest EV market, accounts for 55% of the world’s charging infrastructure for EVs but as global sales increase, markets worldwide will be required to devote significant investment into charging points, charging stations and electrical grid upgrades.

Linklaters also predicts that the rapid development of EV battery technology will create important new secondary markets in battery recycling and reuse. While recycling battery parts is not new, the sheer volume of used batteries created within the next decade will drive significant new investment in recycling capacity. In addition, a new global secondary-use market will also be born out of the EV vehicle boom. Typically, after 7-10 years an EV battery will have 70% of its original capacity remaining, rendering it inappropriate for use in EVs but suitable for a plethora of secondary uses including domestic or commercial energy storage and powering fixed infrastructure, e.g. street lights or lifts.

Daniel Pauly, TMT partner at Linklaters commented,

“We are at the threshold of one of most exciting automotive and industrial tipping points in history. In the next 10 years we will see the creation of new, entirely global, billion-dollar markets in products, technologies and services that today only exist at the fringes of consumers’ daily lives. Car and battery manufacturers, infrastructure and mining companies and the host of innovative start-ups breaking new ground in these markets will require not just extraordinary investor support but also the right understanding of new national and global regulatory standards today still in their infancy.”