You are here

Electric vehicles on road set to triple in 2 years

This means oil consumption will fall, and investments will go into battery production

BT_20180531_ECARS31_3455818.jpg
A Tesla Model S electric vehicle on show in California. Last year, the global electric vehicle fleet displaced 380,000 barrels of oil a day of demand, about half of what Belgium consumes.

London

TESLAS and Nissan Leafs are likely to become a much more common sight on the world's roads in the next two years, the International Energy Agency (IEA) says.

The global fleet of electric vehicles (EVs) is likely to more than triple to 13 million by the end of the decade from 3.7 million last year, says a report released on Wednesday by the Paris-based institution.

Sales may soar 24 per cent each year on average through to 2030.

The findings illustrate the speed at which the world's transportation system is shifting toward cleaner fuels as governments focus on limiting pollution and greenhouse gases.

Tesla and Nissan have some of the best known EVs on the road now, but major automakers from Volkswagen to General Motors and Audi have followed suit in announcing dozens of battery-powered versions of their models.

Pierpaolo Cazzola, senior energy and transport analyst at the IEA and one of the authors of the report, said: "The dynamic policy developments that are characterising the electric car market are expected to mobilise investments in battery production, facilitating cost reductions and ensuring that battery production takes place at scales that exceed significantly what has been seen so far."

Here are some of the key findings of the report of the IEA, which was set up to advise industrial nations on energy policy:

  • China will remain the biggest market. EVs are expected to make up just over a quarter of vehicles sold in the Asian nation by 2030, up from 2.2 per cent last year, the IEA estimates.

More than half of global sales last year were in China, followed by the US.

The Chinese government has put a number of policies in place to encourage EVs, part of an effort to cut air pollution in smog-choked cities. Last year, Beijing set minimum requirements for domestic car-makers on EV production through a credit trading system. It also extended a 10 per cent tax rebate for consumers until 2020.

  • EVs will displace lots of oil from the market. They run on batteries charged by power plants, instead of on petrol or diesel fuel. With an estimated 130 million light-duty vehicles expected on the world's roads by 2030, the IEA estimates about 2.57 million barrels of oil per day won't be needed. That's about as much as Germany uses each day.

Last year, the global EV fleet displaced 380,000 barrels a day of demand, about half of what Belgium consumes.

The IEA's estimate is more punchy than Bloomberg New Energy Finance's expectation that 2.23 million barrels per day will be displaced from the market by EVs by the end of the next decade.

  • At least 10 more giant battery gigafactories will be needed. Demand for batteries is expected to rise by a factor of 15 by 2030, largely driven by light-duty vehicles such as cars and vans.

China's burgeoning market is expected to make up half of the world's demand, followed by Europe, India and the US.

That means the world needs many more battery-production plants like the Gigafactory that billionaire Elon Musk's Tesla is building in Nevada. That facility draws its name from the the word giga, meaning billion. It will produce 35 gigawatt-hours of batteries over 4.9 million sq ft of operating area.

  • Buses are going electric too. There will be 1.5 million electric buses in use worldwide by 2030, up from 370,000 last year, said the IEA.

Almost 100,000 electric city buses were sold last year, 99 per cent of them in China. The Chinese city of Shenzhen is leading the pack with an all-electric bus fleet.

A number of cities in the Europe's Nordic region such as Oslo, Trondheim and Gothenburg also have electric buses in operation.

  • Cobalt and lithium demand is surging. Cobalt and lithium are key ingredients in the rechargeable batteries that power EVs as well as electronics from mobile phones to laptops.

Demand could possibly rise 10-fold, but technological advances and adjustments to battery chemistry could also significantly reduce this.

Since about 60 per cent of the world's cobalt is mined in the Congo, where child labour still exists, battery makers are under pressure to show that their products are made sustainably. This may provide an incentive to shift away from cobalt-heavy batteries. BLOOMBERG

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes