Just recently German minister of transport Volker Wissing caused a great deal of confusion with his request to postpone the ban of combustion engines in Europe by 2035. There is no denying that the Germany’s combustion engine reliant industry sectors could benefit from such a postponment. However, is this really the whole story or might there be merrit in taking a closer look?
eMobility and the related infrastructure have long been declared the victors of an ongoing ideological conflict, a heated debate between traditionalists and progressives. Various agreements and regulations on a political level in recent years painted a clear picture outlining a clean and electric future. eMobility certainly offers several benefits, such as reduced carbon emissions, improved air quality, and a lower reliance on imported oil. Especially from a Tank-to-Wheel perspective e-vehicles provide the best energy efficiency by far. Technical advancements and upscaled production faciliate the benefits of eMobility on an international level. The Diesel scandal further fueled the debate and added pressure on industrial and political leaders to take action.
The European Union (EU) has set ambitious targets to reduce greenhouse gas emissions by at least 55% by 2030, and eMobility is seen as a key tool to achieve this goal. According to the European Environment Agency (EEA), transport is responsible for around 25% of the EU’s greenhouse gas emissions, and eMobility is expected to play a major role in reducing this figure.
However, geopolitical conflicts and various supply shortages add another dimension to the conversation. Not only do European and other countries struggle to provide the required amounts of renewable energy and accompanying storage solutions. Fluctuating energy prices and critical shortages of rare earths as well as semiconductors and other raw materialy suggest a more balanced and flexible energy strategy. Economies would be ill advised to stumble from one disastrous dependancy into another.
“Recent concerns for the supply of nickel from Russia, coupled with financial speculation by the founder of Tsingshan, a major Chinese steel producer, pushed nickel prices to an unprecedented level of USD 100 000 per tonne (the average price in 2021 was USD 18 500 per tonne) resulting in the London Metal Exchange temporarily closing nickel trade.”
Source: IEA Global EV Outlook 2022 (page 158)
China: Still a main driver for global eMobility?
The Chinese market is a key driver of growth for the electric vehicle industry, and European manufacturers are eager to tap into this market. According to a report by McKinsey & Company, China will accounts for more than 40% of global electric vehicle sales by 2030. European manufacturers such as Volkswagen, BMW, and Daimler are investing heavily in electric vehicle production and marketing in China in order to take advantage of this trend. However, some experts caution that the Chinese market may become increasingly competitive and challenging for foreign manufacturers. The Chinese government has set ambitious targets for domestic electric vehicle production and is providing significant support to local manufacturers. This could make it difficult for European exporters to maintain a foothold in the Chinese market in the long term.
Solid-state batteries and smart grid solutions
According to reports by PwC, the total cost of ownership of electric vehicles is expected to reach parity with that of traditional vehicles by 2025, due to falling battery prices and improvements in technology. Exiting new technologies provide an even more promising outlook for e-vehicle performance and efficiency in decades to come. Solid-state batteries f.ex. are expected to provide energy densities that are around 70% higher than the current best Li-ion batteries. They thereby have the potential to drastically increase driving range capabilities for electric vehicles. Solid-state battery research has progressed rapidly and prototype development ist in full swing. Nissan is starting pilot production in 2024 and aims to produce EVs with solid-state batteries in 2028.