With oil resources being depleted worldwide, for the last few years, there has been a heavy push for the production of Electric Vehicles (EV) instead of manufacturing cars with internal combustion engines (ICE). Demand for EVs is growing day by day. While EV accounted for only1% of the global annual sale, and there were just 0.2% EVs on the road. It is estimated that by 2030 EVs (including battery vehicles and plug-in hybrids) could rise to almost 20% of global sales, Europe only will account for 35% of EVs. These rates could rise even faster under aggressive scenarios. Recent surveys suggest that 30% of car buying and 50% of first new car buying individuals will consider purchasing an EV for their next car instead on one powered by traditional Internal Combustion Engine.
Increased EV adoption is going to affect more and different natural resources, as well as multiple industries, different geographies, and levels of carbon emissions. The concern for the environment is one of the leading plus points for selling EVs, as the marketers of EVs are hyping on EVs will have far less or no carbon emission in comparison to ICE vehicles. Secondly, EV adoption will, however, significantly affect demand for different fossil fuels: coal, and natural gas. More EVs means that more electricity will have to be generated. If half of the automobiles on American roads were EVs, daily US natural-gas demand to generate extra electric power would be expected to increase by 20%. Presently there are more than 500,000 charging points that support more than four million EVs now in use globally. Then there will be the requirement for land. Simply replacing petrol pump stations with charging points for batteries will not be sufficient for servicing the expected number of EVs. It will take multiple rapid 120 Kilo Watt (KW) charging stations with eight outlets to dispense a similar amount of range per hour as the standard-size petrol pump station of today.
The possibility of a land squeeze is going to be there in many places in Europe, China, and Japan, then in the American and African continents. It has been reported that only 40% of European and 30% of Chinese EV owners have access to private parking and wall charging vs 75 percent of US EV owners. The comparative data for other areas is still not available. There is going to be a challenge for EV owners where to get the power point for charging the batteries of EVs. Today’s power facilities can accommodate tomorrow’s significant rise in the number of EVs, as long as vehicles are charged during off-peak hours. Faster charging during peak demand, however, will indeed have an impact. In fact, peak demand from single EV using a top-of-the-range fast charger is 80 times higher than expected peak demand of a single household.
These types of potential constrain will likely have to be addressed through a variety of approaches. In most developed/developing countries government has to come into the picture to help in setting up the infrastructure which will be required for EVs. For underdeveloped nations, where still electric power position is dismal, EVs will be a distant dream.
The cost of an EV can be broken down largely into the cost of its battery (40 to 50%), electric power train (about 20%), and other elements of the vehicle itself (30 to 40 %). And pricing dynamics will reflect more than just demand. Currently, in the USA battery costs are about $200-$225 per KW hour. Unless it reaches $100 per KW hour then only it can achieve parity with ICE vehicles and $75 per KW hour for Larger vehicles, these costs with government subsidies are continued. But the reality is, in most of the developed/developing countries subsidies are being phased out. So private participation in developing battery/infra will be required in all types of countries.
Now coming to the actual car battery- a typical car battery has
Lithium 25 Pounds (11.35 Kg)
Nickel 60 pounds ( 27.25 Kg)
Manganese 44 Pounds ( 20 Kg)
Cobalt 30 Pounds (13.6 Kg)
Copper 200 Pounds (91 Kg)
Aluminium, Steel, and Plastic 400 Pounds (182 Kg)
With millions of EVs coming into the market every year, there is going to be a huge impact on the mining of these essential battery materials like Lithium, and Nickel. The process of mining these metals is already having an impact on the environment, and other resources like power, water, gas, etc.
Next week, in part 2 of this blog, I will write about these impacts.
Waiting for your views on this blog.
Anil Malik
Mumbai, India
10th November 2022.