Forecast charts for battery electric vehicles (BEVs) in Europe point to a 45-degree angle by 2030, showing booming sales of up to 10 million new cars. But there are doubts about this electric car revolution, although European Union (EU) politicians have decreed that it will happen.
‘The Economist’ magazine, in an article titled ‘Could the electric vehicle boom be running out of juice before it really takes off’, points to possible shortages of key battery ingredients like lithium, nickel and cobalt. The magazine also said expected EU rules could raise the price of batteries from the biggest supplier, China. The EU is expected to enact regulations on carbon-intensive import suppliers, and the high proportion of coal-fired electricity in China could add $500 to the cost of batteries.
Automotive experts at global consultancy KPMG warn that despite the current overwhelming belief that BEVs will dominate, the winner is more likely to be a combination of technologies, not just one.
There are many unanswered questions about the future of BEVs. Will there really be enough batteries with all their exotic, rare and expensive ingredients to supply this market? After all, in Europe and to a lesser extent the United States, the expected change in electrical power from the internal combustion engine (ICE) is truly of a monumental magnitude. Will there be enough electricity? Will there be an adequate pricing structure?
And given the high price of new BEVs, what happens to the majority of current buyers of the cheapest ICE cars? Cynics say they will take the bus to work, while others say it is the whole point of EU policy, to force the majority of European motorists out of their cars and to take public transport, for the good of the planet.
Stellantis, now the 2n/a Europe’s biggest collection of car brands behind Volkswagen, said the high price of new electric vehicles and the lack of cheap ICE vehicles will drive average earners out of the market, which is likely to spark political resentment.
The EU’s decision to exile ICE cars began in 2015, with a gradual tightening of CO2 emissions until 2030, when it will be nearly impossible to make money selling them. After EU rules tighten in 2025, even plug-in hybrid electric vehicles (PHEVs) will struggle to survive in the market. (PHEVs have smaller batteries than BEVs and can provide between 30 and up to 60 miles of electric driving alone).
Yet forecasts steadily point to the sale of up to 10 million new electric cars across Europe by 2030.
Schmidt Automotive Research predicts that electric battery sales in Western Europe will increase this year to 1,575,000 for a market share of 14.0% compared to 11% last year. Sales increase to 14.5% in 2023 and 15% in 2024 to 1,950,000. Sales regain momentum by jumping to 20.0% of the market in 2025 and sales of 2,700,000, then they explode, to 9,230,000 in 2030 and a market share of 65.0%.
Western Europe includes all major automotive markets like Germany, France, Great Britain, Italy and Spain.
Bernstein Research predicts that all European BEV sales will capture 14% of the market this year, 27% in 2025 and 50.5% in 2030.
Investment researcher Jefferies said European BEV sales will reach 1,618,000 this year, 3,919,000 in 2025 and just under 10 million in 2030.
S&P Global Mobility forecasts for 30 European markets forecast a BEV market share of 14.1% this year, 29.8% in 2025 and 70.6% in 2030 for a total of 9 million.
BEV’s current sales acceleration has been driven by affluent early adopters who are dedicated to the idea of electric power and all they believe it can do for the planet. They will probably buy an electric Tesla
Carlos Tavares, CEO of Stellantis, said EU rules would mean an untimely death for ICE-powered vehicles and that it was a waste as petrol/electric hybrids had a crucial role to play in reducing emissions from CO2. Tavares criticized the EU for designing anti-CO2 rules that were driven by politics, not industry.
Tavares said so last year.
“I can’t imagine a democratic society where there is no freedom of movement because it’s only for the rich and everyone else will use public transport.”
Environmental groups have been quick to criticize Tavares and say EU rules are not tough enough if the threat of a climate emergency is to be averted.
Stellantis was born from the merger of Groupe PSA and Fiat Chrysler Automobiles in January 2021. Stellantis owns European brands such as Peugeot, Citroën, Opel, Vauxhall, Fiat, Maserati, Alfa Romeo and Lancia, and American Jeep, Dodge and Chrysler. In June, Stellantis announced that it would withdraw from ACEA, the European Automobile Manufacturers Association, at the end of this year. This would have contradicted ACEA’s role in the European Parliament’s decision to ban the sale of new ICE vehicles from 2035.
Stellantis always makes controversial statements. Manufacturing chief Arnaud Deboeuf said in June that if BEVs didn’t get cheaper, the car market would collapse, according to Automotive News Europe. Experts fear that without cheap entry-level electric vehicles, much of the European car market will die out, crippling the economy of large mass automakers, or be taken over by Chinese automakers who will achieve the same result.
Chinese automakers already have a strong presence in Europe. According to French automotive industry consultancy Inovev, Chinese vehicles sold across Europe reached 75,000 in the first half of 2022, suggesting that 150,000 are possible for the whole year. In 2021, less than 80,000 have been sold. So far, these sales have not yet targeted the lowest priced tiers of the market.
The Economist article quoted consultancy Benchmark Minerals as saying that in theory there would be enough new battery capacity by 2031 for electric cars, but that relied on new entrants in a fuel-intensive industry. capital. He quoted S&P Global Mobility stating that battery factories typically take 3 years to build, but often require a few more years to reach full capacity, and therefore could be insufficient by 2030. Manufacturers often had different specifications for battery cells and were not easily interchangeable.
Some important battery ingredients had troubling prospects, according to The Economist. Some new nickel suppliers like Indonesia filled supply gaps but were not as good quality as supplies from Canada, New Caledonia and Russia, and had to be smelted twice, emitting more of CO2, thus undermining the interest of BEVs. Cobalt may need more supply from the Democratic Republic of Congo, but its record of child labor use and abuse may not be acceptable in Europe. Most of the uncertainties relate to lithium, but the decision to increase production is much more expensive, according to the magazine.
Gary Silberg, KPMG’s global auto sector leader, said BEVs may have the inside lane for now, but it’s too early to know for sure.
“A BEV future is clearly current conventional wisdom, but I think the years ahead will be much more complicated and unpredictable than (this) suggests,” Silberg said in a recent interview.
“With the infrastructure challenges, I believe the future of the industry will be fragmented and there won’t be a single, monolithic model of success – the industry will look more like a mosaic. Over the 10 In the next 20 years, multiple fuel/powertrain combinations – including gasoline/ICE will coexist, and private sector innovation will be driven by consumer demand,” Silberg said.