It’s game on, says Everledger’s Lauren Roman, Business Development Director for the Metals & Minerals Ecosystem. But what does the potential surge in production mean for the future of EV batteries?
Even with the COVID-19 pandemic, 2020 was the breakthrough year for electric vehicles (EVs) and electric vehicle batteries (EVBs). The defining steps for a prolific 2021 were taken during the last 12 months, particularly by Tesla in the US, shoring up 80% of the market. Cut to Elon Musk’s rise to the richest person on the planet just a few weeks ago.
But he’ll be looking over his shoulder. The chasing pack, including the major automotive companies, made plays in 2020 to eat up the ground. For example, the first Ford Mustang Mach- E hit the roads this month to compete with the Tesla Model 3. General Motors is ringfencing more than $27 billion for the launch of 30 all-electric models globally by 2025, a figure that will exceed its investment in gas and diesel technology.
With demand intensifying, the major battery companies are competing to form long-term partnerships with manufacturers. And while passenger vehicles tend to get the spotlight in the press, we see huge transformation among industrial trucks, utility vans, motorbikes and more, which will only increase as supply chains grow. That’s almost the bigger story, given the environmental benefits that change could bring.
Although EVs currently account for just 5% of traffic, California has announced ambitious plans to ban the sale of new gas-powered cars by 2035. The new Biden administration is expected to boost such initiatives dramatically. From day one, he set out his intentions by re-joining the Paris Climate Accord. Like the rest of the world, the US now has commitments to CO2 reduction: the number one thing that society can do to reduce greenhouse gas emissions is to impact transportation. President Biden’s decision to nominate Jennifer Granholm as Energy Secretary should bode well for the EV industry given her past support for automotive and clean energy as Michigan governor.
We’ve seen encouraging signs in Europe too, where EV sales increased 45% year-on-year (against a global slump in car sales of 30%). Even standing still was moving forward in last year’s context. In fact, EVs in Europe netted around 10% of total sales, and that figure was in the mid-teens in November and December, which provides useful momentum into the new year.
The UK government has brought forward its target for banning pure gas or diesel cars and vans from 2040 to 2030 in a bid to present its automotive sector as a leader in EV development. In Norway, which has invested heavily in EV infrastructure, new-car registrations for EVs broke the 50% barrier for the first time. Automotive powerhouse Germany is also responding to the rise of Tesla in Europe with new electric models from major players such as VW, Audi, Mercedes and BMW.
Meanwhile, the European Commission is taking proactive measures to regulate the expected 14-fold growth in EV and portable batteries over the next decade. The EC is also incentivising e-car development as part of its 750 billion euro recovery fund. In the Far East, the Japanese government has likewise hinted at banning new gas-powered vehicles by the mid-2030s, while major manufacturers like Nissan and Toyota are accelerating their development timetables, lured by the promise of growth in China and the US.
For those Americans fortunate to have stayed in work, there are signs that lockdown (and a booming stock market) resulted in more disposable income. Shorn of the annual vacation and weekend shopping trips, the surplus was spent on a Tesla. Yet, this also points to an enduring challenge, in that potential sympathizers to the environmental benefits of EVs are still priced out of the market.
Of course, it wasn’t all good news. COVID-19 certainly slowed momentum, with some auto manufacturers forced to delay releases, while production was challenging for obvious reasons. EV infrastructure remains sparse in the US, and a 225-mile trip will push most fully-charged vehicles to the limit of their range. Yet, here too, there are reasons to be hopeful. GM recently projected that their Ultium battery packs will cost 60% less than today’s packs with twice the energy density by mid-decade. The recent expansion in solar power shows how quickly change happens when the cost of technology falls. Auxiliary batteries are also emerging as a new market in their own right.
If 2021 goes as planned and EVs continue to build on recent momentum, then battery recycling, repurposing, and disposal will rise rapidly up the agenda. The onus on battery lifecycle management globally is placed on the vehicle manufacturers (over the battery manufacturers). This obligation to sustainably manage battery materials is also a financial and reputational opportunity, given the vast second-life potential for EVBs and the fast-emerging circular economy.
Further down the chain, the car dealerships, independent garages and auto recyclers will wind up with these batteries, which can then be repurposed into energy storage batteries. It’s worth remembering that a ‘dead’ EVB will retain a 70% charge which is plenty for 10 or even 12 more years’ use in domestic settings.
At Everledger, we are working with many stakeholders to raise awareness of the potential benefits of lifecycle management and develop technology solutions to register, track, and transfer these valuable assets. We want to allocate every EVB in the US with its own “Battery Passport”: a digital identity that can be managed on a blockchain platform. This will allow immutable data to be exchanged among authorized lifecycle stakeholders and so support a sustainable value chain for EV and stationary batteries. Our vision is to transform EVBs from a by-product of the revolution into a valuable asset that propels its growth.