Exploring the Upsurge of Electric Vehicle Battery Life
The global electric vehicle (EV) market is witnessing a significant shift, with average ranges increasing by 47% from 2018 to 2022, reaching 210 miles. This growth, driven by larger vehicles, longer driving distances, and automakers like Tesla, is a testament to the progress of electric mobility.
However, this trend poses challenges for the battery supply chain and raw material demand. Lithium-ion battery pack sizes have grown annually by 10%, from 40 kilowatt hours to 60 kWh. This surge in battery demand could lead to potential lithium market deficits and sharp price spikes, as seen in 2021 and 2022.
BloombergNEF's predictions highlight the direct impact of EV range trends on raw materials like lithium and nickel. To address these challenges, they recommend a balanced approach that focuses on expanding battery recycling efficiency, supporting the development of affordable long-range electric vehicles, advancing battery technology, and fostering domestic battery supply chains.
Governments are urged to implement regulatory frameworks that include recycling standards, such as the EU's 65% lithium battery recycling target by 2025. They should also provide incentives for EV adoption and invest heavily in public charging infrastructure to demonstrate to consumers that they do not need excessive range and oversized batteries.
Policymakers and automakers must collaborate to strike a balance between consumer preferences for range and the feasibility of sustainable battery production. Widespread and reliable public charging options can help eliminate the inefficiencies of over-buying range, thus reducing the pressure on the battery supply chain.
In the growth scenario, EV ranges could continue to increase by approximately 5% per year until 2030. In this scenario, battery demand could be 70% higher than in the decline scenario in 2030. BloombergNEF predicts that battery demand in 2030 could be nearly 50% higher in the growth scenario compared to the base case.
Despite these challenges, the growth in EV ranges and battery pack sizes is a positive sign for the future of electric mobility. Policymakers are suggested to provide purchase incentives for smaller, lower-priced electric vehicles, with a price cap linked to the average transaction cost in a given market. This approach could help make EVs more accessible and affordable for a wider audience.
One example of the challenges faced by automakers is the electric Chevy Silverado equipped with a 200 kWh battery pack. The significant cost of such a battery pack could potentially slow down the pace of EV adoption until cost-efficiencies are achieved.
In conclusion, the growth in EV ranges and battery pack sizes presents both opportunities and challenges. By adopting a balanced approach that addresses consumer preferences, sustainable battery production, and the development of domestic supply chains, we can ensure a greener automotive future while maintaining competitiveness and security of supply.
