Powering the future:
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A significant amount – potentially up to US$30-45bn – may need to be invested in mining capacity by 2025 to help satisfy demand for EVs.
Mix of metals demanded will also depend on the types of batteries produced in future (e.g. the development and take-up of solid state solutions).
The prices of key metals used to create EV batteries (lithium, nickel and cobalt) have been highly volatile.
There is potential for a significant shortfall between mining capacity and the demand for EV batteries.
Price volatility along with market uncertainty have been challenges for investors.
EU: Responsible sourcing is required from 2021 for conflict minerals. The European Commission is developing a common set of principles for a socially and environmentally sustainable mining sector in Europe and will map the availability of raw materials within the EU. It is also exploring sustainable mining benchmarks.
China: No relevant provisions.
US: Few specific regulations pertaining to sourcing of raw materials for battery production; certain disclosure requirements.Read more Stage 1: Sourcing raw materials
China already accounts for >60% of the world’s battery plant capacity. Relatively concentrated industry.
European Battery Alliance established by European Commission in Oct 2017 to facilitate access to funding to develop new battery manufacturing capacity in Europe. Potential for M&A and joint ventures.
EU: Strategic Action Plan aims to support a sustainable EU battery cell manufacturing base with the lowest environmental footprint possible.
China: Foreign investment restrictions on EV battery manufacturing lifted in 2017.
US: Adopted safety-related amendments to existing standards for batteries for electric vehicles.Read more Stage 2: Battery Manufacturing
EV sales will overtake traditional vehicle sales as early as 2033, assuming:
i) the price of EVs continues to fall;
ii) charging infrastructure increases significantly; and
iii) the mileage range of EVs increases.
Government subsidies, incentives and new regulations will drive manufacturers to increase EV sales as a percentage of their total, particularly in the EU.
EU: Proposed regulation requiring CO2 emissions from new cars to fall 37.5% over 2021-2030. Varying EV subsidy levels across EU. Big push to improve air quality. Ban on new internal combustion engine vehicles in many cities falling between 2030 – 2040.
China: EV subsidies scheduled to end in 2020. However, “China VI” emissions standards (seen as building on comparable European and US requirements) to be implemented in 2023.
US: Up to $7,500 federal tax credit per EV under threat of elimination in 2020 budget.Read more Stage 3: Incorporation into, and sale of, EVs
US$80bn investment potentially required to develop ultra-fast EV infrastructure globally by 2025.
The length of time required to charge an EV battery will change consumers habits on refuelling and could provide opportunities for new market entrants including those offering services during charging.
EU: EU Directive 2014/94 requires Member States to set targets for public recharging points which would allow EVs to operate in urban and suburban areas by end of 2020 (potential extension to 2025).
China: Guidance anticipates 4.3 million private charging points and 500k public charging points by 2020.
US: No federal incentives for installation of EV charging systems (state level incentives vary by state).Read more Stage 4: Recharging of EVs
The significant power storage capacity of batteries will result in a secondary market potentially worth US$24bn by 2030.
After their in-car life, EV batteries will still have substantial power storage capacity.
Alternate uses include recycling for raw materials or reuse in other contexts.
EU: Policy initiatives on battery recovery, reuse and recycling anticipated by Autumn 2019. Batteries Directive to be revised to take EV batteries into account.
China: Measures introduced in 2018 require automobile manufacturers to establish battery recycling channels and recycling service outlets.
US: Recent federal proposal to facilitate re-use of EV batteries.Read more Stage 5: Battery recycling