RARE EARTH ELEMENTS (REE) BEYOND THE TAILPIPE: THE FULL ENERGY MIX Are electric cars the future Will electric vehicles (EVs) completely replace carbon-emitting vehicles? It depends. Analysts agree on the advantages: EVs are getting cheaper and easier to produce, they’re generally more efficient, and they pollute less – well, sort of. Here the story gets more complicated, as this infographic shows. The batteries on which EVs depend have some problematic issues associated with their sourcing. And if the wider means of electrification in a country are still carbon-based rather than green or renewable, the benefits of EVs are diminished. The most likely scenario is that both types of vehicle will coexist, but under a very different business reality in which EVs operate in niches where they can play to their strengths. In any case, the car industry must shift gear. BATTERIES: KEY COMPONENT Costs are falling ($ per kWh) 0 200 400 600 800 1000 2010 2015 2020 2022-26 Critical threshold, implying cost parity between electric vehicles and internal combustion engines Forecast COBALT: KEY MATERIAL FOR BATTERIES 60% from Democratic Republic of Congo 7 of 10 largest cobalt producers in Congo owned by China 2050 The cumulative demand for cobalt would require all the resources known today, even with high recycling 2016-2018 The price of cobalt tripled World production of cobalt in politically unstable regions: CO2 / NOx OPPORTUNITY SPACE: URBAN MOBILITY SOLUTION But when factoring in the whole energy chain (transformation of chemical into electric energy, transmission losses), overall energy efficiency falls*. *Unless green energy is used, making EVs perform better Despite the challenges, a small, connected, electric and eventually autonomous vehicle is promising for several reasons: 1/ Lends itself to highly standardized assembly 3/ Eases anxiety over short-distance refueling 4/ Slower city speeds reduce need for complex safety engineering 5/ Better setting for car-sharing business models 2/ Batteries could be smaller Transformation of energy into kinetic energy: 90% electric cars 40% diesel cars ENERGY EFFICIENCY Co 27 58.933 Cobalt 3x A limit on REE exports from China would have devastating effects on dependent industries Mining for the REE on which EVs (and consumer electronics) depend creates significant environmental damage of global production for some REE is concentrated in China EFFECTS ON THE VALUE CHAIN EVs are cheaper to produce than today’s cars, with lower service requirements Differentiation via software is bringing new tech players to compete in the car space 80% 25% A diesel car could drive several thousand kilometers before reaching the same CO2 / NOx emission levels as are generated by mining raw material for batteries and producing them. Where energy generation is carbon-based (petroleum, coal, gas), more electric vehicles could actually increase CO2 / NOx emissions. For example, in China, a shift to 100% EVs would be much worse for the environment right now. Wheel-hub engines: moving the motor from the body to the wheels recuperates energy while allowing for torque vectoring (for better handling on icy roads, for example) Battery and power electronics: in floor allows for good center of gravity and opens up space for passengers 2/ 1/ DESIGN IMPROVEMENTS ? 34 | IESE Business School Insight | no. 152 SOURCE: “Key Data of the Automotive Sector” by Marc Sachon, chair of IESE AUTO, and Beatriz Welter. A new perspective THE BIG PICTURE

27 58.933 politically unstable regions: CO2 / NOx future ... · more electric vehicles could actually increase CO2 / NOx emissions. For example, in China, a shift to 100% EVs would

Download PDF Report

Upload
others
View
1
Download
0

Embed Size (px)

Citation preview

Page 1: 27 58.933 politically unstable regions: CO2 / NOx future ... · more electric vehicles could actually increase CO2 / NOx emissions. For example, in China, a shift to 100% EVs would

RARE EARTH ELEMENTS (REE) BEYOND THE TAILPIPE: THE FULL ENERGY MIXAre electric

cars the futureWill electric vehicles (EVs) completely replace carbon-emitting vehicles? It depends. Analysts agree on the advantages: EVs are getting cheaper and easier to produce, they’re generally more efficient, and they pollute less – well, sort of. Here the story gets more complicated, as this infographic shows. The batteries on which EVs depend have some problematic issues associated with their sourcing. And if the wider means of electrification in a country are still carbon-based rather than green or renewable, the benefits of EVs are diminished. The most likely scenario is that both types of vehicle will coexist, but under a very different business reality in which EVs operate in niches where they can play to their strengths. In any case, the car industry must shift gear.

BATTERIES: KEY COMPONENTCosts are falling ($ per kWh)

200

400

600

800

1000

2010 2015 2020 2022-26

Critical threshold, implying cost parity between electric vehicles and internal combustion engines

Forecast

COBALT: KEY MATERIAL FOR BATTERIES

60% from DemocraticRepublic of Congo

7 of 10 largest cobalt producersin Congo owned by China

2050The cumulative demand for cobalt would require all the resources known today, even with high recycling

2016-2018The price of cobalt tripled

World production of cobalt in politically unstable regions: CO2 / NOx

OPPORTUNITY SPACE: URBAN MOBILITY SOLUTION

But when factoring in the whole energy chain (transformation of chemical into electric energy, transmission losses), overall energy efficiency falls*.

*Unless green energy is used, making EVs perform better

Despite the challenges, a small, connected, electric and eventually autonomous vehicle is promising for several reasons:

1/ Lends itself to highly standardized assembly

3/ Eases anxiety over short-distance refueling

4/ Slower city speeds reduce need for complex safety engineering

5/ Better setting for car-sharing business models

2/ Batteries could be smaller

Transformation of energy into kinetic energy:

90% electric cars

40% diesel cars

ENERGY EFFICIENCY

Co27 58.933

Cobalt

3x A limit on REE exports from China would have devastating effects on dependent industries

Mining for the REE on which EVs (and consumer electronics) depend creates significant environmental damage

of global production for some REE is concentrated in China

EFFECTS ON THE VALUE CHAIN

EVs are cheaper to produce than today’s cars, with lower service requirements

Differentiation via software is bringing

new tech players to compete in the

car space

80%

25%

A diesel car could drive several thousand kilometers before reaching the same CO2 / NOx emission levels as are generated by mining raw material for batteries and producing them.

Where energy generation is carbon-based (petroleum, coal, gas), more electric vehicles could actually increase CO2 / NOx emissions.

For example, in China, a shift to 100% EVs would be much worse for the environment right now.

Wheel-hub engines: moving the motor from the body to the wheels recuperates energy while allowing for torque vectoring (for better handling on icy roads, for example)

Battery and power electronics: in floor allows for good center of gravity and opens up space for passengers

2/1/DESIGN IMPROVEMENTS

34 | IESE Business School Insight | no. 152

source: “Key Data of the Automotive Sector” by Marc Sachon, chair of IESE AUTO, and Beatriz Welter.

A new perspective

THE BIG PICTURE