Electric Cars Impact – EV impact on the global economy

That is the first of a series that will feature four parts on EV and their impact on the global economy. That includes the oil, power, and auto industries.

It might seem that electric cars are expanding at an unprecedented rate and in various forms, but it’s true. They’re slowly changing the way we live.

S&P Global Market Intelligence data shows that pure electric and plug-in hybrid passenger vehicles are poised to increase by more than double to 6.2 million units in 2021. That is due to rising demand in Europe and China. That represents a dramatic end to a long climb to commercial relevance. It now accounts for EV impact on economy nearly 9% of the global passenger car market.

The shortages of semiconductor chips, lithium-ion cells, and batteries are a problem for automakers and their suppliers. Safety-related recalls can be costly. Despite being costly, this year’s EV sales surge opens up for cross-sector innovation which will impact on global economy. As grids reshape their power delivery and the oil & gas industry loses its grip over transportation, there will be a new phase.

Josh Boone (executive director of EV advocacy organization Veloz) said, “this is one of the most important transformations since the Industrial Revolution, and it doesn’t just transform what powers the car.” He is supported by California’s largest electric utilities, many of the largest automobile manufacturers in the world, and an affiliate of an oil major migrating aggressively towards electricity.

Boone stated a “seismic shift” in the interaction between the transportation and energy sectors.

Veloz belongs to the National EV Charging Initiative and that will defiantly impact the economy. A coalition of U.S. businesses, labor groups, state energy regulators, and environmental organizations seek capital to fund the coast-to-coast construction of charging stations. That is a crucial missing link in the push to make EVs ubiquitous. According to the coalition, federal funding is required to boost the billions the private sector spends to create a charging experience similar to when you fill up your car with gasoline. The bipartisan infrastructure bill, currently awaiting a House vote, is seen by supporters as a beginning. It includes $7.5B in funds for alternative fuel corridors.

Colleen Quinn, president and founder of e-Mobility Advisors and organizer of the National EV Charging Initiative, said, “We are in a really important time.” “This is historic, and it’s critical to accelerating adoption and that will impact on global economy.

To achieve their ambitious plan, regulators and EV advocates are working with automakers, utilities, and vendors of charging equipment to overcome barriers. These include domestic manufacturing, recycling, and ending unethical practices in lithium-ion battery metal extraction.

“We are looking for ways to make electric cars more efficient. We are looking at ways to get more mileage out of our electric cars. Also, we are interested in the following: “How can decarbonize and improve the manufacturing process of electric cars?” Boone stated.

“This type of effort requires shooting at stars.”

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Beating for EV trillions

Market Intelligence estimates that electric vehicles could make up 15% of the annual car market. The total stock of 60 million silently whizzing along the highways is almost 60,000,000. China’s total EV market is expected to reach 20% by 2025 which will put a huge impact on the global economy. That’s up from 6% now and 37% in the EU. Last year, they were 11%. They are projected to increase to 10% in the U.S by 2025.

Market Intelligence senior research analyst Alice Yu says that global penetration rates are driven by policy incentives for consumers and sticks that encourage automakers to reduce emissions and improve EV fuel impact on economy. Yu says that EV models are expanding as automakers embrace the shift to electric and that will impact on global economy.

The global revenue potential could reach $1.9 trillion if EVs have an average price of $40,000 by 2025. As analysts expect, revenues could rise to $1 trillion annually if prices are lower than their petroleum-powered counterparts. Additional revenue sources include charging services and electricity sales.

These opportunities led to the largest automakers joining Tesla Inc. and betting hundreds of millions on EVs. Most of the money is being used for massive scale-ups of battery and car manufacturing, charging infrastructure, and research and development.

Elon Musk is the Tesla CEO. He has provided a roadmap for future transport after years of taking losses. With a stock market valuation of over $750 billion, Palo Alto. ‘s California-based company is worth greater than Toyota Motor Corp., Volkswagen AG, Daimler AG, BMW AG, General Motors Co. Ltd., and Toyota Motor Corp.

Tesla is on the verge of a third consecutive profitable year. With just four all-electric cars, it needs more than $1.1billion in the second quarter of 2021. According to investment experts, Tesla’s profits and revenue will continue growing for many years.

Others have caught up. According to research company EV, volumes.com, Volkswagen was the only carmaker, other than Tesla, to have delivered more than 300,000. EVs in the first six months of 2021. Around half of them were complete battery electrics.

GM has been charging heavily. According to the research group, GM sold more than 200,000 pure electric EVs through its Chevrolet Division in the U.S. Just before the August recall of Bolt EVs by GM cost $1 billion. This recall was GM’s third for the model due to safety concerns regarding fire-related issues with lithium-ion cells supplied by LG Chem Ltd.

Stephen Chan is a credit analyst at S&P Global Ratings and does not see any battery issues affecting EV expansion plans that will impact the global economy. Chan stated, “Given that the battery sector is still experimenting using a complex technology,” but added that industry players would face increasing product liability risk, but their liabilities remain manageable so far.

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‘Tipping point

Tesla leads in heavy-duty trucks. In 2017, Tesla debuted its semi-tractor truck concept to a great deal of fanfare. Traditional truckmakers have since taken over the show.

Daimler Trucks North America LLC (VOLVO Trucks North America Inc.) and Volvo Trucks North America Inc. have signed agreements to supply Southern California fleet owners with 100 fully-electric Class 8 trucks. These vehicles are classified as having a total axle weight exceeding 33,000lbs. The state partly funds the $74 million initiative, which aims to commercially launch heavy-duty trucks and reduce pollution along congested roads leading to Long Beach or Los Angeles.

Steve Mignardi, a vice president at Daimler Trucks, stated in an interview, “It’s a tipping point.” “It is not a dream anymore. It is not a vision. That is not a test. We are growing.”

An electric truck costs more than a traditional car. However, it is less expensive upfront. It can often change the cost comparison when you add up the total cost to own the vehicle over its lifetime, including fuel, maintenance, and fuel costs.

“The opportunities are huge now for cost savings, not to mention cleaner air, and the resulting carbon emission decreases,” Scott Fisher, vice president of fleets and first equipment manufacturer solutions at EV-charging software specialist Greenlots. Royal Dutch Shell PLC bought Greenlots.

Norway is the window to the future.

According to Schmidt Automotive Research (Berlin), EVs accounted, in the first six months of 2021, for 15%, 23% in Germany, 40% in Sweden, and an astounding 83% in Norway.

Norway’s accelerated adoption rate for electric vehicles is partly due to tax incentives. That gives a glimpse at the electrified world that larger economies could one day live in. The Nordic nation, an oil and gas exporter, relies on Europe’s most decarbonized electricity grid. It almost entirely consists of wind energy and hydropower. Its strategy calls for the complete phasing-out of sales of new gasoline and Diesel passenger cars and light vans within four years, which is the longest timeline among over 20 countries with similar policies.

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Roman Kramarchuk from S&P Global Platts is head of energy scenario, policy, and technology analytics. “Norway has a lot to offer,” he said. “Sales are part” of the story. What happens to the current fleet — how many older cars retired? It is another separate one.

Slow turnover of older vehicles lags new car markets. Platts Energy Transition Analysts estimate EVs could account for just 18% and 32% of Norway’s total light vehicle stock by 2025.

Another area of uncertainty is driving habits. “Can EVs be driven as much as internal combustion engine [internal combustion engine] cars, or are they used more sparingly for short hauls?” Kramarchuk asked.

Norway is striving to become a manufacturing hub for lithium-ion batteries. These efforts follow the example of Sweden, where Northvolt AB developed a battery called “the most durable in the world.”

Freyr Battery CEO Tom Jensen shared that Norway offers the best parameters and characteristics for producing battery cells.

Freyr is looking to reduce the time it takes to mass produce by licensing technology from Massachusetts-based 24M Technologies Inc. rather than creating its chemistry. Jensen indicated that Freyr plans to create factories in Norway and is in advanced talks to license technology from a Massachusetts-based developer, 24M Technologies Inc., to build batteries in the U.S.

Jensen stated that American President Joe Biden’s policies might allow the country to emulate Norway’s bold efforts to integrate power and transport and open up opportunities to expand American battery manufacturing capacity.

“We believe that [our approach] can be replicated in the U.S., which, naturally, has a fundamental necessity for decarbonizing both its auto sector and power generation sector,” he stated.

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Frequently Asked Questions:

Are EVs better for the environment?

EVs emit no tailpipe pollutants and are more efficient than diesel or gasoline motors. Even if the electricity source (e.g., solar, wind, or hydro) is renewable, EV emissions will be even lower. As cleaner sources of electricity enter the electric grids, which are currently dependent on fossil fuels, EV charging’s emissions will fall even further.

Are EV batteries recyclable?

One EV car battery can be made of manganese, graphite, nickel, cobalt, and other materials. It can weigh up to 700 kilograms.

They last an average of 8 to 15 years. They can use them to store power for the electric grid until they are no longer fit for use. Because there aren’t enough, EV batteries can’t be made with recycled minerals. Recycling will increase as EV adoption grows.

Montreal-based Lithium Recycling has received funding to construct a Quebec lithium-ion recycling facility. Although this is a good start, the demand for minerals will continue to grow until recycling allows for high amounts of depleted batteries.

Isn’t EV manufacturing more destructive?

Every vehicle manufactured has an environmental EV impact, from sourcing raw materials to shipping and building. Additionally, EV manufacturers must procure and process lithium and any other minerals. That has negative EV impacts.

However, unlike a gasoline-powered car that pollutes right up to its end, an average EV covers the higher environmental costs of production within its first few years of ownership.

Are EVs more expensive?

While EVs are more expensive to purchase (for now), they also have lower fuel consumption and require less maintenance that have good impact on economy.

The 2022 Clean Energy Canada report compared six EV models to the costs of owning gas-powered counterparts. The report compared the costs of driving 20,000 km per year, paying $1.35 per gallon for fuel, and assuming that fuel prices have increased since then. In every comparison, the electric car is less expensive than the gasoline alternative. Gas prices are rising, and electric cars could save you more than $24,000 annually.

Can EVs travel the same distance as most cars?

The range of EVs covers most daily driving and is improving. Canada has more than 15 EV models. They have ranges exceeding 300 km. Some vehicles can travel up to 600 km per charge.

What’s the difference between an electric vehicle, a plug-in hybrid car, and a hybrid?

Electric cars emit no tailpipe emissions and only use electricity. And Plug-in hybrid cars can be run on gasoline or electricity.

Hybrid cars have an engine and a battery. However, instead of charging the battery by plugging it in, the engine generates electricity to power the battery.

What are the environmental effects of electric cars?

Even after considering manufacturing and charging with today’s electricity grid, EVs still emit less global warming pollutants than gasoline-powered cars over their lives. Based on the current electricity mix, an average EV emits just a third as much pollution as a gasoline-powered car. As we move to renewable energy, EVs will become cleaner.

The manufacturing of electric car batteries relies on rare earth elements. Unfortunately, heavy metal mining can be very environmentally destructive. Lithium mining is very water-intensive, can cause soil erosion, and reduce air quality. Cobalt mining can also pollute nearby waterways and cause air pollution. Future technological advances are expected to decrease lithium and cobalt used in batteries by as much as 75 percent.

What about hydrogen fuel cells?

Hydrogen-powered cars generate their electricity and emit zero tailpipe emissions. However, not all hydrogen is created equal.

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