As the world accelerates going towards a greener future, the role of EVs is increasingly important. Every year, The Global EV Outlook publication serves as a comprehensive guide that pinpoints and analyzes the latest advancements in EVs worldwide. Developed with the support of the members of the Electric Vehicles Initiative (EVI), it combines historical analysis with projections up until 2030. From EV sales to battery minerals and chemistries to costs and from EV charging to adoption, the report explores key areas of interest surrounding EVs.
EV Sales
EV markets are seeing exponential growth as sales reached 13.6 million in 2023, up 26% from the 10 million sold in 2022. A total of approximately 18% of all new cars sold were electric in 2023, up from around 14% in 2022, 9% in 2021 and less than 5% in 2020. Led by three main regions, China was the largest, accounting for almost 70% of global EV sales followed by Europe with almost 15% and the US with just under 9%. In 2024, the global EV market is expected to reach 17.5 million units, representing a growth of 27%. With over 26 million electric cars on the road in 2022, up 60% relative to 2021 and more than 5 times the stock in 2018, EVs are forecasted to account for 19.8% of total car sales during the whole 2024 calendar year.
EV Battery Minerals and Chemistries
More EVs = More Minerals Needed
The surge in EV demand is fueling the necessity for batteries and the corresponding essential minerals. Indeed, in 2022, the demand for Li-ion batteries grew by approximately 65%, reaching 550 GWh from 330 GWh in 2021, primarily due to the uptake in EV passenger car sales. EV batteries accounted for about 60% of lithium demand, 30% of cobalt, and 10% of nickel demand in 2022, a notable increase compared to five years ago when these shares were significantly lower.
The increase in battery demand underlines the need for critical materials. Despite a 180% increase in lithium production since 2017, lithium demand exceeded supply in 2022. Furthermore, the rapid expansion of mining and processing of critical minerals is essential to support the energy transition, not only for EVs but also for other clean energy technologies. As a result, reducing dependence on critical materials is crucial for supply chain sustainability, resilience, and security. While innovation can play a pivotal role, including the development of advanced battery technologies requiring smaller quantities of critical minerals, more initiatives are needed to promote the adoption of EVs with optimized battery sizes and battery recycling programs.
Diversifying Chemistries
At the same time, supply chains for lithium-free sodium-ion batteries are being established with alternative battery technologies gaining momentum, diverging from traditional Li-ion. In 2022, battery chemistries saw diversification, with lithium nickel manganese cobalt oxide (NMC) maintaining its dominance at 60% market share, followed by lithium iron phosphate (LFP) at nearly 30%, and nickel cobalt aluminum oxide (NCA) at approximately 8%.
Furthermore, sodium-ion (Na-ion) batteries have emerged as a promising alternative to Li-ion in recent years. Indeed, these batteries offer cost advantages due to cheaper materials and bypass the need for critical minerals, making them the only viable lithium-free option for now. As such, China's CATL has developed a Na-ion battery estimated to cost 30% less than an LFP battery. However, Na-ion batteries have lower energy density compared to Li-ion, making them more suitable for urban vehicles with shorter ranges or stationary storage applications. Despite this limitation, nearly 30 Na-ion battery manufacturing plants are either operational, planned, or under construction, collectively boasting a capacity exceeding 100 GWh, primarily located in China. This is in contrast to the current manufacturing capacity of Li-ion batteries, which stands at around 1,500 GWh. Consequently, several automakers have already unveiled Na-ion electric cars, such as the BYD Seagull with a range of 300 km and the VW-JAC joint venture's Sehol EX10 with a 250 km range.
The Influence of Battery Costs
The pricing dynamics of critical minerals can significantly impact the choice of battery chemistry. Indeed, until 2015, NMC chemistries with an equal ratio of nickel, manganese, and cobalt were common. However, escalating cobalt prices and concerns surrounding cobalt mining's environmental and social impacts prompted a shift towards lower-cobalt ratios. The surge in nickel prices in 2022, reaching double the average between 2015 and 2020, incentivized the adoption of chemistries less reliant on nickel, such as LFP, despite their lower energy density.
Lithium carbonate prices have also seen a steady increase over the past two years, multiplying four to five-fold in 2021 and nearly doubling from January 2022 to January 2023. By early 2023, lithium prices were six times higher than the 2015-2020 average. Unlike nickel and lithium, manganese prices have remained relatively stable. Insufficient supply compared to demand in 2021 led to price increases for lithium, nickel, and cobalt. Although nickel and cobalt supply exceeded demand in 2022, the same couldn't be said for lithium, driving its price up further. However, from January to March 2023, lithium prices dropped by 20%, returning to late 2022 levels, attributed to a 40% increase in expected supply and slower growth in EV demand in China. This drop, if sustained, could result in lower battery prices.
In 2022, the estimated average battery price was around $150/kWh, with pack manufacturing costs accounting for about 20% of the total battery cost, compared to over 30% a decade earlier. While pack production costs have continued to decline, cell production costs increased in 2022 compared to 2021, returning to 2019 levels. This increase is partly due to rising material prices, which significantly impact cell prices, and electricity costs affecting manufacturing expenses. Despite this, efficiency gains in pack manufacturing have helped offset costs. Bloomberg New Energy Finance (BNEF) forecasts further reductions in pack manufacturing costs by around 20% by 2025, while cell production costs are projected to decrease by only 10% relative to their historic low in 2021. This suggests a need for ongoing analysis based on future trends in material prices.
EV Charging
Infrastructure
The necessity for public charging points is rising to facilitate broader adoption of EVs. Although home charging currently meets most of the demand, accessible public chargers are becoming increasingly essential to match the convenience and accessibility of refueling conventional vehicles. Especially in densely populated urban areas, where home charging options are limited, public charging infrastructure plays a crucial role in promoting EV adoption. As of the end of 2022, there were 2.7 million public charging points globally, with over 900,000 installed in that year alone, marking a 55% increase compared to 2021 and reflecting a growth rate similar to the period before the pandemic, between 2015 and 2019, which saw a 50% increase.
Battery Swapping
Additionally, there have been recent advancements in the battery swapping process by exchanging a depleted vehicle battery with a fully charged one at designated swapping stations. Typically, vehicles equipped for battery swapping can also utilize traditional plug-in charging infrastructure.
The adoption of battery swapping presents several benefits, including achieving price parity with conventional vehicles and reducing recharging times. Notably, offering batteries as a service, such as through a monthly subscription model, alleviates the initial financial burden for EV owners. Furthermore, drivers have the flexibility to select a battery size suitable for daily commuting and upgrade to a larger one for longer trips. Beyond economic advantages, battery swapping holds promise for enhancing battery management, such as extending battery lifespan through controlled charging, coordinating charging to minimize grid impact, and boosting the utilization of renewable energy sources.
Encouraging EV Adoption
In an attempt to move closer to climate ambitions, legislations, policies, schemes and incentives are being passed and introduced to match electrification ambitions and motivate potential buyers to help boost sales. Indeed, the US passed the Inflation Reduction Act (IRA) in August 2022, including various tax incentives and funding programmes to meet the aim of building a clean energy economy. Part of the act concentrates on accelerating EV adoption, with specific financing sourced from the $369 billion earmarked for climate investments.
Similarly, the European Union presented the Green Deal Industrial Plan in February 2023, consisting of four key pillars aimed at advancing projects aligned with achieving net zero emissions: expedited permitting processes, increased financial assistance, improved skill development, and promoting open trade. Additionally, the plan encompasses the proposal for a Critical Raw Materials Act, put forward in March 2023, with the goal of ensuring supply security, maintaining high extraction and environmental standards, and promoting recycling efforts.
Furthermore, there has been an expansion of low-emission zones such as in London and similar policies in other big cities including Paris, encouraging drivers to switch to EVs. Indeed, while global spending on EVs exceeded $425 billion in 2022, only 10% of that spending was attributed to government support, the remainder being from consumers.
EV Market Share Forecast
Based on the IEA's Stated Policies Scenario (STEPS), the forecasted global share of EV sales is expected to reach 35% by 2030, a substantial increase from the previous estimation of under 25%. China is projected to continue leading the EV market, capturing 40% of total sales by 2030 according to the STEPS scenario. The United States, driven by recent policy actions, is predicted to double its market share to 20% by the end of the decade, while Europe is anticipated to maintain its current 25% share. Consequently, the expected rise in EV demand across major automotive markets is set to have significant implications for energy markets and climate goals within the prevailing policy framework.
Improving Batteries with Addionics to Increase EV Adoption
As global spending on EVs continues to grow, the EV market is becoming more and more competitive. With an increasing number of entrants, models and technologies, using more efficient batteries is a must. Addionics 3D Current Collectors can be dropped into any EV battery production line without incurring additional manufacturing costs. Moreover, they require less materials to be made and are compatible with all chemistries. In terms of performance, by enabling a significantly higher loading of the active material, it creates a much higher energy density, leading to a longer driving range.
Find out more about Addionics' technology or contact us for collaboration opportunities.