Surging electric vehicles will shake up markets

Surging electric vehicles will shake up markets

By Anna Hirtenstein

The global fleet of electric vehicles is likely to more than triple to 13m by the end of the decade from 3.7m last year, and battery production will need to ramp up too to meet demand, according to a report from International Energy Agency (IEA).

The Paris-based institution, which was set up to advise industrial nations on energy policy, says sales may soar 24% 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 Motor have some of the best known electric vehicles on the road now, but major automakers from Volkswagen to General Motors have followed suit in announcing dozens of battery-powered versions of their models.

“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,” said Pierpaolo Cazzola, senior energy and transport analyst at the IEA and one of the authors of the report.

The IEA report said China will be the biggest market for electric vehicles and are expected to take just over a quarter of vehicles sold there by 2030, up from 2.2% last year.

More than half of global sales in 2017 were in China, followed by the US.

The Chinese government has put a number of policies in place to encourage electric vehicles, part of an effort to cut air pollution in smog-choked cities. 

In 2017, the government in Beijing it set minimum requirements for domestic car makers on electric vehicle production through a credit trading system. 

It also extended a 10% tax rebate for consumers until 2020.

And electric vehicles will displace lots of oil from the market. Electric cars 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 2.57m barrels of oil per day won’t be needed.

That’s about as much as Germany uses each day.

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

The IEA’s estimate is more punchy than other forecast that 2.23 million barrels per day will be displaced from the market by electric vehicles by the end of the next decade.

Governments will have to find new sources of tax revenue and may around the world may lose out on over €36bn in tax revenue from road fuel sales by 2030 in the IEA’s central scenario. 

In the report’s most aggressive forecast for electric vehicles, it was as almost €80bn.

Surging electric vehicles will shake up markets

Last year, China’s fuel tax revenue was already cut by €2.25bn because of the growing share of electric vehicles on the country’s roads, the IEA said.

At least 10 more giant battery giga factories will be needed as 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.

It will produce 35 gigawatt-hours of batteries over 4.9 million square feet of operating area. And buses are going electric too.

There will be 1.5 million electric buses in use worldwide by 2030, up from 370,000 last year, according to the IEA.

Almost 100,000 electrified city buses were sold last year, 99% of them in China.

The Chinese city of Shenzhen is leading the pack with an all-electric bus fleet.

A number of European cities such as Oslo, Trondheim and Gothenburg also have electric buses in operation.

Meanwhile, demand for cobalt and lithium is surging. 

They are key ingredients in the rechargeable batteries that power electric vehicles as well as electronics from mobile phones to laptops.

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

Since about 60% of the world’s cobalt is mined in the Democratic Republic of 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.

More in this Section

Aer Lingus adds flight to Greek island as part of summer scheduleAer Lingus adds flight to Greek island as part of summer schedule

Business movers: Kevin Davidson appointed as the new MD of BMW Group Ireland.Business movers: Kevin Davidson appointed as the new MD of BMW Group Ireland.

Employment law expert: Returning emigrant workers will be glad to see how well their rights are protectedEmployment law expert: Returning emigrant workers will be glad to see how well their rights are protected

Saudi Aramco reaches landmark $2 trillion in second day of tradingSaudi Aramco reaches landmark $2 trillion in second day of trading


Ever wondered if liqueurs or drink-laced Christmas puddings might put you over the drink-driving limit? Pat Fitzpatrick picks up a breathalyser and puts six sweet treats to the testDo these boozy treats put you over the drink-driving limit?

Kya deLongchamps investigates the history behind the mythCan you really be arrested for eating a mince pie on Christmas Day in Britain?

Birds, hedgehogs and insects could all do with Christmas goodies too. Hannah Stephenson shares her top picks.Garden wildlife could all do with a few Christmas pressies too

Bag a bargain and beat the stress of flying at night with these top tips, says Claire Spreadbury.5 ways to make your late-night flight more bearable

More From The Irish Examiner