The expansion of the electric vehicle (EV) market has brought with it nuanced opportunities to create a cleaner and transformative new energy carrier. EV technology has already brought tremendous innovation to the energy market, and now it’s inspiring even more global growth. Demand for electric vehicles is predicted to continue to grow.
Driven by government policies and innovation, consumer adoption of EVs has accelerated. Rising oil prices in the wake of Russia’s aggression in Ukraine have made electric cars attractive to more than one car consumer, accelerating global adoption.
Despite weakening growth prospects, the global economy is currently stable. According to forecasts, US GDP growth will slow to 1.3% year-on-year in 2022 and 0.2% in 2023. The Eurozone GDP forecast is better at 3.3% for 2022 and 0.3% for 2023.
However, low-carbon and renewable energy sources are becoming a key focus of the fast-growing sector, and electric vehicles in particular are seen as a sustainable tool to meet the global increase in electricity demand while curbing carbon emissions.
The US Inflation Reduction Act (IRA) includes $369 billion in renewable energy investment and tax credits for electric vehicles, which should keep automakers on track for the next decade or more. For decades, the U.S. has fumbled, promised, but so far failed to deliver on its promises to address its climate change needs. If the US is any indication, countries around the world are realizing that they will have to step up to meet their climate goals, and fully electric transportation is an attractive goal.
In the first half of 2022, sales of internal combustion vehicles fell 8.5% year-on-year, but according to BYD (“Build Your Dreams”) and LMC Automotive, sales of electric vehicles managed to grow by 60%+. Tesla. Relatively high oil prices bring EVs closer to the cost of internal combustion engine (ICE) vehicles, accelerating global EV adoption.
Bloomberg New Energy Finance (BNEF), in its latest data The Outlook for Electric Cars 2022 The report predicts EV sales to reach 10.7 million in 2022 and 20.6 million by 2025. The report points to increases in EV sales due to a combination of policy support, improvements in battery technology, more charging infrastructure and attractive new models from automakers. The report shows that electrification is spreading to new segments of motoring, and this is setting the stage for major changes ahead.
However, it will take a lot of effort to replace the 1.3 billion ICE vehicles with EVs, the latter of which account for more than 21 million vehicles currently on the road. China and Europe are projected to account for nearly 80% of EV sales by 2025, with the United States accounting for 15%.
The main gap in EV adoption is supply – demand for EVs is so strong that some models are effectively sold out, while others have long waits. Existing and new factories come into operation here. Automakers, battery suppliers, and semiconductor chip makers must build and equip new factories.
Manufacturing Plants for an All-Electric Future
The new US climate bill allocates nearly $400 billion over 10 years to promote the clean energy transition and the growth of factories. The need to focus on factories is clear. “We don’t have a demand problem, we have a production problem,” CEO Elon Musk admitted on Tesla’s most recent earnings call. Like Tesla, most EV manufacturers are currently focusing on expanding operations and improving supply chain management to meet demand.
The New York Times This week SK Battery America chronicled production at the 3 football field long Georgia factory where employees work 24/7. The Time calling them “key players in the early days of the worldwide battle to build the engines of the future.” The article zoomed in on the new Ford F-150 Lightning, describing it as “part of an all-around win: revitalizing production, saving gas money and the potential to curb the transportation sector’s leading 27% share of US greenhouse gas emissions. “
China’s EVE Energy is set to supply BMW with large cylindrical batteries for its electric cars in Europe as the German automaker follows Tesla in adopting the new technology. EVE has signed agreements to become BMW’s main supplier of battery cells in Europe for the new EV series, which will be on the market from 2025.
Metals are an important component of EV batteries. According to the analysis, although the metal prices will increase, the new supply coming to the market will bring the battery prices back to the previous downward trend. Looking for an Alpha. As a result, many financial analysts see positive global growth ahead for the EV ecosystem.
The most common type of EV battery uses a combination of nickel, cobalt and magnesium in the cells of lithium-ion batteries. But in the EV revolution, many metals, including graphite, silicon and tin in batteries; copper at charging stations; and aluminum and mild steels in car bodies. The long-term outlook is healthy for commodities such as nickel and lithium, which are used in batteries for electric vehicles.
Still, at least 40% of the critical metals in a battery—lithium, nickel, cobalt, and manganese—must come from the United States or a Free Trade Agreement (FTA) partner to comply with the IRA. This percentage will increase to 80% in 2026. That means more factories within US borders.
Final thoughts – More EV growth across sectors
Many areas of EV global growth impact are possible.
- Commodity suppliers must open new mines and build refineries. Mining companies are already responding to higher prices by announcing expansions, which should lead to price stabilization in the next few years.
- Charging companies are scrambling to install stations quickly enough. This is especially important for fleet owners, who represent more than 2.5 million vehicles on the road and generate more than $1.1 trillion in annual revenue.
- Tesla is exploring ways to eliminate excessive use of battery cells, expanding R&D into energy storage in the 4680 battery, including to improve range.
- EV battery charging and discharging profile managed in conjunction with a national grid known as Vehicle-to-Grid System (V2G) is predicted to be an important mechanism in mitigating the impact of renewable energy outages. Australia’s REVS project is an example of how commercially available EVs and chargers can contribute to energy stability by transferring energy back and forth to the grid.
- Technological changes in the automotive industry are accelerating the development of automated driving. An interesting project is underway at Cornell University, where researchers are developing a way to help autonomous cars create “memories” of previous experiences and use them in future navigation, especially in inclement weather where the car can’t reliably rely on its own sensors.
- Some researchers even say that the emergence of plastics will play a key role in the development and adoption of EVs, especially when efficiency and profitability are considered, as they give engineers the necessary freedom to design and develop different parts and dimensions. replacing bulkier and denser materials.
With these and other areas of innovation on the rise, EVs are likely to be seen as an important growth sector and mechanism for slowing global growth, less vulnerable to the vagaries of the global macro economy than other recent innovations.
Do you value CleanTechnica’s originality and clean tech news? Consider becoming a CleanTechnica Member, Supporter, Tech or Ambassador, or a Patron on Patreon.
Don’t want to miss a cleantech story? Sign up for daily news updates from CleanTechnica via email. Or follow us on Google News!
Have a tip about CleanTechnica, want to advertise or suggest a guest for our CleanTech Talk podcast? Contact us here.