After a plodding start, EVs are now spreading rapidly as automakers from General Motors to Volkswagen Group are forced to keep pace with tightening emissions regulation, retooling factories to turn out a wide variety of battery models with attractive driving ranges.
Countries are now competing to attract investments to build new manufacturing clusters — mainly battery cell plants but also mining, processing and recycling operations.
In the U.S., so far a slow mover in the electric transition, President Joe Biden’s package of generous clean-technology subsidies is turbo-charging spending.
The share of EVs in the country will more than triple by 2026 to 28 percent of passenger-vehicle sales, according to BNEF.
EVs will be even more prevalent in China and Europe, where their share will climb to 52 percent and 42 percent, respectively.
The shift to battery power, already displacing 1.5 million barrels of oil a day, will cause road fuel demand to peak in four years. That is ratcheting up pressure elsewhere, with lithium ion battery prices rising for the first time last year.
BNEF expects innovation to deliver new battery chemistries that are more resource-efficient and powerful.
Even so, lithium could become a supply-chain risk if no new discoveries are made over the next two decades and more investments are needed.
Hydrogen’s role in decarbonizing big rigs, offering fast refueling times and transportability, remains uncertain due to its cost, BNEF said.
To get to BNEF’s net zero scenario, investments in charging infrastructure are set to reach as much as $3 trillion by 2050.
Reaching the last 10 percent to 20 percent of the market is particularly challenging, according to the report.
“Support for charging infrastructure needs to be expanded dramatically, including for remote and otherwise under-served locations,” BNEF writes.
“Dense public charging networks can help reduce the EV range consumers feel they need, which will in turn reduce pressure on battery raw material supplies.”
