(Visual Capitalist/Transport Energy Strategies) ... Why Is It Unlikely We Will Meet Targets? Even as pledges vow to increase the forecast share of EV adoption, we still need to consider headwinds that will slow down the EV rollout.
Roadblock 1: Resource Constraints
Sourcing critical raw materials will be the most significant challenge for the rollout of EVs, as demand outstrips supply.
Although some areas of the EV production line can be fast-tracked, mineral extraction times cannot, which will cause major setbacks to EV production. In fact, it can take anywhere from 4-20 years for a mine to begin commercial production.
In addition to the time taken to achieve commercial production levels, a mine can take up to another 10 years before reaching nameplate production capacity.
Roadblock 2: Cost
Although EVs are becoming more affordable, purchase price remains high in emerging markets, limiting mass adoption.
Many countries have been slower to incorporate EVs into their automotive fleets, with India, Brazil, and Indonesia making up less than 0.5% of global electric vehicle sales in 2021.
A continued increase in the cost of raw materials as well as global interest rate rises may also contribute to limited affordability and slow mass adoption.
Roadblock 3: Infrastructure
The growing construction of charging infrastructure will also increase demand for raw materials like copper and nickel.
Charging infrastructure also varies across markets, with France, Germany, and the UK currently not meeting EU charger availability recommendations.
Providing enough charging infrastructure will be especially difficult in emerging markets.
Another Road to Decarbonization
While the rollout of EVs is underway, the momentum needed to reach net-zero targets will be slowed by resource constraints, cost, and infrastructure. It’s therefore essential we consider all paths to decarbonizing the auto industry.
Alternative solutions such as a fuel-mix strategy laid out in KGP Auto’s new report could sustain momentum to net-zero targets, with internal combustion engines (ICEs) continuing to make up the majority of market share for the next few decades.
In this strategy, ICEs, plug-in hybrid vehicles (PHEVs), and fuel cell electric vehicles (FCEVs) with alternate fuels such as hydrogen would bridge the gap to net-zero targets as raw-material supply, infrastructure, and affordability improve to support BEVs. READ MORE
Related articles
- 2022 - 2040 Powertrain Outlook (KGP Powertrain Intelligence)
- Europe’s Lithium Challenge on the Road to Electrification (Elements/Visual Capitalist)
- The race to make electric cars cheaper is making electric cars more expensive (Business Insider)
- The $360 billion electric car battery market will determine the fate of electric vehicles (Business Insider)
- More U.S. consumers want EVs but prices are a concern - Deloitte survey (Reuters)
- New York City Wants More EVs but Needs to Find Space for Chargers -- To meet ambitious plans, the city must install thousands of EV chargers by 2030 (Wall Street Journal)
- The Expensive And Harmful Truth About Electric Vehicles (Forbes; inlcudes VIDEO)
- Nearly Half of Shoppers See Public Charging as an EV Dealbreaker (Green Car Reports)
- Cost Misconceptions May Be Behind Waning EV Interest (Green Car Reports)
- Biden’s EV agenda hits mining world’s boom-and-bust cycle -- With a dramatic decline in lithium prices over the last year, companies are putting projects on hold, even as the Biden administration is trying to juice development of supply chains here and in allied countries. (Politico Pro Greenwire)
Excerpt from Business Insider: Automakers say they are doing all they can to introduce cheaper EVs. For instance, the Chevrolet Equinox SUV EV, to launch in 2023, should start around $30,000. Many have long been targeting that number, though Tesla somewhat tapped out of the race this year. Elon Musk told investors earlier this year his company wasn't prioritizing the $25,000 EV anymore.
High EV prices stem, in part, from the domination of luxury vehicles in the market. Ford's F-150 Lightning electric pickup starts at nearly $56,000; the GMC Hummer EV costs more than $100,000. Startup Rivian tacked a $73,000 based price tag onto its R1T truck, and Lucid raised the price of the cheapest variant of its Air sedan to $87,400.
But the more stubborn problem comes from the battery industry and the simple law of supply and demand.
The world of batteries influences your EV's price tag
Automakers are pouring more than $515 billion into all-electric lineups over the next several years. GM and BMW are planning for at least 50% of their new vehicle sales to be EV by 2030, and GM wants to eliminate all emissions-producing cars by 2035. Ford's targeting 40% of its global cars sold electrified by 2030. Mercedes is only making newly launched cars electric starting in 2025. Scaling up will inherently make electric cars less expensive over time.
But in the short term, the surge in demand was enough to reverse a decade-long decline in battery prices, according to a recent analysis from BloombergNEF. This year, prices for crucial lithium-ion batteries rose about 7%.
It's simple: The more EVs that carmakers plan to make, the more they need raw materials for their batteries. The less available supply there is, the higher the prices for those materials can go — and the more expensive your battery is overall.
The demand has ultimately sparked a frenzy that continues to make the battery the most costly part of an EV. READ MORE
Excerpt from Reuters: The survey also showed that 30% of U.S. consumers do not trust anyone with the data from their vehicles, signaling a significant challenge for manufacturers looking to further monetize the mobility experience.
Globally, consumers would rather pay for connected technologies upfront as part of the vehicle's transaction price or per use, compared with a subscription plan, the study said. READ MORE
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