Role of e-Mobility in the journey of the auto industry to net zero

by Darshak Parikh & Suraj Shetty, IHS Markit 15 Sep 2021


Remarkable technological advancements, global industrialisation and rapid urbanisation have been crowning achievements in the chequered story of human civilization. However, we are also being forced to face the great cost of some of these achievements.

Environmental studies, such as the recent Intergovernmental Panel Climate Change (IPCC) report, have painted a bleak dystopian future ahead for mankind and have made it mission critical that the global community makes a course correction immediately, if we are to avoid this outlook.

Globally, industries are reevaluating their impact on the environment and actively commit to making systematic changes. The automotive industry is no exception to this. Significant involvement from the automotive sector is critical to limit the global warming increase to about 1.5°C relative to preindustrial levels by 2050 as per the stated objective arising from the 2015 Paris Climate Accord.

Among all emissions associated with the automotive industry, emissions related to the use of the vehicle account for more than 90% of most car manufacturers reported is carbon dioxide (CO2) emissions. The emissions from the transport sector account for about 29% in the European Union, more than one-third in the United States, and nearly 10% and climbing in mainland China. Given the extremely high share of  lifecycle emissions from vehicles-in-operation, it is immensely important to reduce or limit tailpipe pollution.

In a bid to do its part, the sector is reexamining the entire value chain right from the propulsion solutions, sourcing methodology, sustainable supply chain, manufacturing processes, technological advancements, and strategic partnerships to minimise the industry's environmental impact.

The most important, immediate, and headline-grabbing step has been the move to transition from an internal combustion engine vehicles (ICEVs) to battery-electric vehicles (BEVs) or hydrogen fuel-cell electric vehicles (FCEVs), which do not emit CO2 at the tailpipe. The constant evolution of battery technologies and declining cell prices are gradually making electric vehicle (EV) technology cost-competitive, as well as accelerating the uptake of plug-in electric vehicles (PEVs) globally.

Batteries are crucial to the transition to electric and electrified vehicles, which will likely require battery cell production of more than 2,400 GWh in 2030; 17 times the production volume in 2020.

Vehicle manufacturers are also strengthening partnerships by establishing joint ventures (JVs) with battery cell manufacturers to be able to sell more BEVs and FCEVs and secure their own supply chain for raw materials.

There are, of course, component-level innovations under development, such as increasing cell recyclability, developing higher energy density cathode materials, reducing battery cell costs, and developing dry electrode coating technology that can reduce a chunk of energy to be used to manufacture electrode materials.

The automotive industry is also limiting or eliminating the cobalt content in li-ion batteries by increasing, amongst other more abundant and suitable materials, the nickel and/or manganese content and cost competitive battery cells. Nickel-rich NCM811 and NCMA chemistries will likely represent 60% of total battery cell production in 2030, compared with less than 20% in 2021.

From the supplier's point of view, many major battery cell manufacturers have already started manufacturing batteries using renewable energy or are in the process of setting up the infrastructure to limit their emissions. Farasis, a key supplier of battery cells to Mercedez-Benz, has started manufacturing battery cells using renewable energy since 2019. Another Volkswagon-backed Swedish battery supplier Northvolt, which also has a long-term supply agreement with other major OEMs including BMW, manufactures cells using only renewable energy.

Cell recyclability is another crucial step if the industry is to achieve net zero. The recycled minerals from battery cells are known to contain less carbon dioxide footprint compared with mined minerals. Some of the most recently developed li-ion battery cells can be dismantled in a manner that repurposes more than 97% of materials, creating the potential for a circular ecosystem that balances the raw material supply and demand while ensuring lower carbon emissions.

Charging infrastructure is another important aspect to increase the adoption of EVs. In addition to OEMs, utility and energy companies as well as various startups are aggressively installing electric vehicle supply equipment (EVSE) with capital incentives from various governments. According to the EV charging infrastructure forecast by IHS Markit’s Supply Chain and Technology, about 12 million AC and 800,000 DC charging stations are expected to be publicly available worldwide by the end of 2030.

Second-life batteries can also be used at EVSEs to store energy from renewable sources when demand is low. This energy can then be used to charge EVs during day when the grid demand is higher. This solution can help aid carbon neutrality, because if the energy is from a low carbon footprint source, vehicle in-use emissions will in turn decrease as well.

Another interesting development that comes with the increased penetration of EVs is bidirectional charging technology, which enable vehicle batteries to supply stored energy back to the grid, home, or another vehicle. This helps manage spikes in demand and can potentially prevent costly grid reinforcement, as well as providing a financial return to BEV owners.

Around half of annual global BEV production is projected to be equipped with bidirectional charging technology by 2030 as vehicle-to-grid (V2G) technology becomes increasingly mandated, compared with about 10% of BEV production in 2021.

Although electrification of the vehicle powertrain and associated operational ecosystem is an important aspect of an automaker’s journey to net zero, the transition will require the industry to examine every aspect of the business. Going forward, it will be interesting to see how regulatory frameworks and incentives, demand side pressures, and technology evolution can accelerate the transition to net zero.

To their credit, numerous OEMs have developed their own aggressive timelines to completely shift to an EV portfolio and have started reporting and reducing their carbon footprint. Whereas in the past, automotive industry innovation may have prioritized performance, functionality, economy or style, the coming decade will see environmental innovation come to the fore.

You are cordially invited to be part of the 2021 IEB AutoTech community where you can connect with government, industry associations, manufacturers, suppliers also influencers to discuss mobility evolution in the global carbon-neutral age.

The plenary program will be accessible without any gate fees, but seats are limited, reserve a seat for either the LIVE or ON-DEMAND session.

This will be a cross-industry, cross-culture, and cross-region discussion, from policy frameworks, local to global industry landscapes, supply chain ecosystems, to alternative energy sourcing, autonomous driving technology, and meeting investors’ expectations towards net-zero 2050.

For more details | register: ihsmarkit.com/IEBAutoTech2021

 

 

Tags: IHS Markit