After last year’s electric vehicles (EVs) sales increase of 72% year/year, to 2.02 million, this year’s growth is expected to slow to around 3 million EVs sold, or around 50% increase y/y. But there’s an important caveat: the figure operates under the assumption that sales will recover in the second half of the year, as December is traditionally the best-selling month of the year. On the other hand, Bernstein data, cited by Bloomberg, paints a more pessimistic figure: on growth of 35% in the first seven months of the year, the market is expected to increase 23%-48% by end of year..
A key reason for the sales slump comes from the Chinese government’s decision to eliminate state subsidies from June 26th for NEVs (New Energy Vehicles — all-electric, fuel-celled autos and plugin hybrids) with ranges under 250 kilometers. For NEVs with higher ranges, it reduced subsidies by about half. Outside of China, sales have declined in North America, while Europe has seen an uptick.
China said it is scaling back subsidies on electric vehicles in view of phasing them out completely after 2020 to encourage local manufacturers to rely on innovation rather than government assistance as the industry matures and costs fall. However, it will keep subsides on for hydrogen-fuel cell vehicles.
Sales of NEVs in China declined 16% from a year earlier, to 85,000 units in August, the China Association of Automobile Manufacturers said. That followed a 4.7% drop in July.
Chinese automobile sales in general have been in a prolonged slump amid a slowing economy that is being additionally pressured by the trade war with the U.S. NEVs made up 7 % of total car sales in China during the second quarter of 2019, compared to 3 % in Europe and only 2 % in the United States.
China, Europe and the US represent together around 93% of global EV sales in 2018. Global EVs (BEVs and PHEVs) in use will rise to around 8.2 million by end of this year. EV sales as percentage of the total vehicles sales is the highest in Norway, which surpassed 50% in this year, followed by the other Scandinavian countries.
A growing trend in EVs sales, which started last year, is that BEVs generally make up 70% of total EVs, with the remainder going to plug-in hybrids. Tesla has led the EV market this year, followed by China’s BAIC and BYD Auto, according to InsideEVs
Long term sales outlook for EVs
According to the International Energy Agency (IEA), EVs in use will rise from 5.2 million vehicles in 2018 to 120 million by 2030, or from 0.33 % to over 7 % of the global car fleet. However, depending on environmental policy decisions, the number of EVs on the road by 2030 could reasonably range between 57 million and 300 million (4 to 19 % of the global fleet).
According to the IEA’s more conservative New Policies Scenario, sales of electric cars could reach 23 million in 2030, with the global stock – excluding two and three-wheelers – topping 130 million. Under the ambitious [email protected] scenario, sales could reach 43 million to take the global fleet to 250 million. In both scenarios, China would remain the largest market, with shares of 57% or 70% in 2030, respectively.
EVs will account for 90 % of car sales globally by 2050, while China is expected to maintain a 50 % share of global pure EVs sales until 2030, the Bank of America Merrill Lynch said in a report. The report, published by a team led by Fraser Hill, who heads the automotive equity research unit at the bank, expects EVs to reach a global share of 34 % in 2030 and 90 % in 2050.
Roskill expects sales of electric vehicles powered by rechargeable lithium-ion batteries to rise to 17 million units, or 20 % of the total, in 2025, and 32 million, or 37 % out of total by 2030, compared with 2.3 %, or 2.02 million, last year.
BNEF (Bloomberg New Energy Finance) expects passenger EVs sales to rise from around 2 million worldwide in 2018 to 28 million in 2030 and 56 million by 2040. Meanwhile conventional passenger vehicle sales will fall to 42 million by 2040, from around 85 million in 2018. Policy support, such as fuel economy regulations, government subsidies and investment in charging infrastructure are expected to drive the EVs market in the next 5-6 years before economics take over in the latter half of the 2020s, BNEF stated.
By 2023/24 EVs are forecast to achieve cost parity with ICVs. The crossover point — when electric vehicles become cheaper than their combustion-engine equivalents — will be a crucial moment for the EVs market. All things being equal, upfront price parity is the key driver behind consumers’ decision to buy an EV.
China, Europe and U.S. (North America), the world’s biggest economies, will be regions with the highest adoption of EVs in next 20 years, and have already made the most progress towards providing subsidies and installing charging points. These three regions will account for over 80% of total world sales in 2030 and over 70% after 2040. Stronger growth in the rest of the world will occur after 2030. China is expected to continue to be the largest EVs market in the world through 2040.
Aluminium demand and content in EVs
If we estimate sales of 30 million EVs in 2030 (a midpoint between the forecasts of IEA, BNEF, BoA and Roskill), for an average aluminium content of 250 kg/EV, the aluminium demand for EVs will be 7.5 million tonnes in 2030.
In the meantime, sales of ICVs will decrease by about 10-12 million vehicles, yielding a net automotive aluminium demand increase between 5.1 and 5.5 million tonnes (excluding batteries and charging stations).
In 2019, demand for aluminium in EVs will approach 750,000 tonnes. The content of cast aluminium decreased in EVs, while overall content of aluminium increased, due to higher usage of flat rolled products and extrusions.
By 2030, aluminium vehicle penetration will be higher in North America (around 290 kg /vehicle) compared to Europe (250 kg /vehicle), mostly due to larger cars. The average aluminium extrusion content in today’s ICVs is 22-23 kg/car, while the average aluminium extrusion content in BEVs stands around 65 kg/car, with a peak of up to 280 kg/car in some premium models, such as the Fisker Karma.
EVs battery enclosures give the largest potential upside to aluminium extrusions usage. In future EVs, average aluminium extrusion content will increase to 80 kg mostly for battery enclosures. More modest gains for extrusions will come in existing applications, such as trim and crash management systems.
The ratio of demand between sheet and extrusions in EVs is likely to be 80/20, which represents an extrusion demand of 1.5-2 million tonnes in 2030, depending of EV sales.
For example, the Jaguar I-Pace weighs 2,208 kg. The body consists of 93 % aluminium, mostly in the form of various alloys (series 5xxx and 6xxx, as well as RC 5754 special aluminium alloy, which is obtained in Jaguar’s closed-loop recycling process). The mix is completed by 4 % boron steel and 3 % steel. According to Novelis, which is the key supplier for the I-PACE, the car’s body-in-white represents 400 kg of aluminium sheet
The key takeaway is that there will be no big difference in the way materials are used for ICVs and EVs, aside from the motor and battery enclosures. All other main parts of a vehicle: hood, trunk, doors, crash absorbers and body/ chassis follow pretty much the same construction and design.
However, lightweighting EVs is the best way to break the mileage barrier and motivate consumers to adopt them in greater numbers. It is estimated that for every 100kg saved, an EV can increase its mileage by 10-11%, reduce its battery cost by 20% and save 20% daily worn-out costs.
Aluminium in EV batteries and charging stations
The content of aluminium in cathodes of NCA type of batteries, used by Tesla cars, is up to 5%, while the newer lithium-sulphur batteries, who also promise high performance-to-weight ratio, consist of between 5-15% of aluminium. According to BNEF, aluminium demand for batteries (including battery enclosures) will reach about 1.9 million tonnes / year by 2030.
Demand for aluminium will also rise on account of infrastructure for serving EVs, since the metal is commonly used as housing material for EVs charging stations. According to AluMag, some 45% of charging station producers use aluminium extrusions for housings. Since charging infrastructure comes in various shapes and sizes, with various materials used, it is impossible to calculate precisely aluminium demand, but cumulative demand of several hundred thousand tonnes by 2030 is quite realistic.
The International Copper Association (ICA), said recently that more than 40 million charging ports will be needed over the next decade, consuming an extra 100,000 tonnes of copper a year by 2027. Demand for aluminium should be even higher.
Goran Djukanovic will be a speaker at FastmarketsMB International Aluminium 2019 conference in Athens, September 23-25, 2019, on Light weighting for Electric Vehicles – game changer for the aluminium industry?
And also at FastmarketsMB Battery Materials Europe 2019 conference in Amsterdam, September 26-27, on Manganese, copper and aluminium: The role of these metals in global battery demand.