Supply Shortages Risk Bringing Record EV Sales to a Halt

author: Vineeth Joel Patel   

As more countries and large cities move away from gasoline-powered engines, electric vehicles are becoming more and more popular. China continues to lead the way forward for the entire automotive industry, as it looks to crack down on its air pollution issues. EVs had record sales last year, but those figures could come crashing down because of supply risks. 

A few months ago, the International Energy Agency released its lengthy yearly report on electric cars and they’re coming off of their best year ever. The agency claims that the total number of electric vehicles and plug-in hybrid cars exceeded 3 million in 2017. That figure represents a massive jump of 54 percent compared with the total number of EVs on the road in 2016. 

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Who Are Leaders In The EV Market?

Unsurprisingly, China led the way forward in sales, as the country continued to be the largest EV market in the world. China accounted for approximately half of all the electric vehicles sold in the world in 2017, as approximately 580,000 EVs were sold in the country. The country saw an increase of 72 percent in sales from 2016. Interestingly, the U.S. came in second place with a total of 280,000 cars sold in 2017. In 2016, 160,000 EVs were sold in the United States. 

Nordic countries also saw a large jump in EV sales, as electric cars represented a total of 39 percent of new car sales in Norway. That figure, as the agency reports, makes it the world leader in the electric vehicle market share. Iceland and Sweden also saw sales of EVs increase, but much more modestly at 12 percent and 6 percent respectively. Japan and Germany also saw EV sales more than doubled than their figures in 2016.  

Electric passengers cars aren’t the only electrified forms of transportation that have become popular recently. Last year, the number of electric buses rose by 25,000 to 370,000, up from 345,000 in 2016. Electric two-wheelers, which includes scooters, have reached a staggering figure of 250 million. China is the country that we have to thank for the recent increase in the popularity of electrified forms of transport, as the country accounts for approximately 99 percent of both electric buses and two-wheelers. 

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Why Are Electric Vehicles Becoming So Popular?

The International Energy Agency believes that the growth of electric cars can directly be traced back to government policy. The agency claims that public procurement programs, tightening fuel-economy standards, improved financial incentives, zero-emission vehicle mandates, stricter regulations on air quality, and various local measures have increased the popular of EVs around the world. 

Another point that the agency makes is that electric vehicles have become much more usable recently thanks to the quickly-affordable price of lithium-ion batteries. Vehicles like the Chevrolet Bolt have a usable range and are affordable. With larger battery sizes, improved chemistry, and increased production scale, automakers are able to continue to improve on the recipe for electric vehicles, rapidly improving on EVs. 

The good news for electric cars doesn’t end there, as charging infrastructure is also picking up, claims the report. Last year, there were 430,000 publicly-accessible chargers in the world. The number of private chargers was approximately 3 million worldwide. 

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Cobalt Supply Could Cause EV Sales To Slow Down

As the agency states in its report, a cobalt shortage could become a major issue for EV sales. In order to make lithium-ion batteries, automakers utilize nickel, lithium, and cobalt. While the first two elements are readily available, cobalt is the one that is throwing everyone for a loop. The International Energy Agency reports that the majority of production of cobalt in the world, approximately 60 percent, is located in the Democratic Republic of Congo. To make matters worse, China controls 90 percent of the refining capacity for cobalt. 

Earlier this year, prices for cobalt and lithium drastically increased, as companies wanted to get a large stockpile of the necessary elements to create a large amount of electric-vehicle batteries. The issue with cobalt is that it’s used in numerous items. Laptops and smartphones are noteworthy items that utilize cobalt. 

While automakers will come out with a way to develop electric-car batteries that don’t need as much cobalt in the future, demand for the element is expected to increase. The agency claims that for EVs alone, cobalt demand is expected to be 10 to 25 times higher than what they currently are by 2030. If we’re already facing a cobalt shortage, what will the future hold for EVs? 

Another behind-the-scenes thing that consumers don’t see with electric vehicles is what happens with used batteries in old vehicles. Countries want to keep used batteries out of landfills as lithium-ion batteries continue to collect and discharge electricity for up to a decade after being removed from a vehicle, reports the Financial Review. 

Working on finding what to do with used car batteries is the next major thing automakers will have to tackle, as electric cars become more popular. As the largest EV market, China is really under a time crunch. The country, though, has plans to implement rules to make automakers responsible for expired batteries. Hopefully, other countries follows China’s path and adopts the country’s measures, as having an environmentally-friendly plan in place for used car batteries is critical. 

In spite of all of the issues that electric cars face, the International Energy Agency believes that EVs will continue to grow at an alarming rate. To help electrified vehicles grow, the agency believes that supportive policies and cost reductions measures will need to continue to grow. If climate goals and sustainability targets continue to rise, there could be as many as 220 million EVs on the road by 2030. 

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