Energy
Visualizing the Rise of the Electric Vehicle
Visualizing the Rise of the Electric Vehicle
It’s easy to dismiss exponential growth at its earliest stages.
That’s because at the beginning of such a phenomenon, the quantities involved can seem insignificant. One becomes two, two becomes four, and so on.
But if the environment is right, and the growth continues on, it can all of a sudden take over. This growth can lead to a paradigm shift and a new status quo, as well as massive opportunities along the way.
The Water Droplet Analogy
One famous example of exponential growth is the water droplet and stadium analogy.
Imagine a giant football stadium, and you are sitting in the very highest seat. You can see the whole field.
In the middle of the stadium, there are drops of water falling at an increasing rate. In the first minute a single drop of water falls, in the second minute there are two drops of water added, and in the third minute, there are four drops of water, and so on. The rate doubles each minute.
When do you think the stadium is full of water? Does it take hours, days, or weeks?
For the first 30 minutes, not much seems to happen – there is a growing puddle, but it’s not likely something you can see from the very top seat. After 45 minutes the stadium is still 93% empty – but by 49 minutes, the entire stadium is full of water (and you’re swimming)!
The Electric Vehicle Market
Today’s infographic comes to us from Raconteur, and it helps visualize anticipated growth in the electric vehicle market – a segment that sits at 1-2% of total vehicle sales currently.
Using projections from Morgan Stanley, it shows that electric vehicle sales are expected to surpass those of traditional vehicles by 2038, while the global fleet of EVs is expected to surpass one billion by 2047.
Meanwhile, the transition to electric will be a game-changer for carmakers. Morgan Stanley’s analysis sees the average profitability of combustion engine models falling through the early 2020s, eventually turning to a loss per unit by 2028.
On the flipside, negative profit margins for electric vehicles will peak in 2023 as production continues to ramp, and EV making will switch to a profitable business by 2029.
An EV Flood?
Will we wake up one morning with the auto market being flooded with new EVs, like in the aforementioned water drop analogy?
Certainly not. Manufacturing processes are notoriously difficult to scale, and we still need to source the raw materials needed to fuel the green revolution.
However, the speed of the transition to electric vehicles will still be surprising to many detractors – and for now, barring an unexpected drop in the price of oil to below $30/bbl, there doesn’t seem to be any obstacle that will slow the adoption of EVs.
Energy
Charted: 4 Reasons Why Lithium Could Be the Next Gold Rush
Visual Capitalist has partnered with EnergyX to show why drops in prices and growing demand may make now the right time to invest in lithium.
4 Reasons Why You Should Invest in Lithium
Lithium’s importance in powering EVs makes it a linchpin of the clean energy transition and one of the world’s most precious minerals.
In this graphic, Visual Capitalist partnered with EnergyX to explore why now may be the time to invest in lithium.
1. Lithium Prices Have Dropped
One of the most critical aspects of evaluating an investment is ensuring that the asset’s value is higher than its price would indicate. Lithium is integral to powering EVs, and, prices have fallen fast over the last year:
Date | LiOH·H₂O* | Li₂CO₃** |
---|---|---|
Feb 2023 | $76 | $71 |
March 2023 | $71 | $61 |
Apr 2023 | $43 | $33 |
May 2023 | $43 | $33 |
June 2023 | $47 | $45 |
July 2023 | $44 | $40 |
Aug 2023 | $35 | $35 |
Sept 2023 | $28 | $27 |
Oct 2023 | $24 | $23 |
Nov 2023 | $21 | $21 |
Dec 2023 | $17 | $16 |
Jan 2024 | $14 | $15 |
Feb 2024 | $13 | $14 |
Note: Monthly spot prices were taken as close to the 14th of each month as possible.
*Lithium hydroxide monohydrate MB-LI-0033
**Lithium carbonate MB-LI-0029
2. Lithium-Ion Battery Prices Are Also Falling
The drop in lithium prices is just one reason to invest in the metal. Increasing economies of scale, coupled with low commodity prices, have caused the cost of lithium-ion batteries to drop significantly as well.
In fact, BNEF reports that between 2013 and 2023, the price of a Li-ion battery dropped by 82%.
Year | Price per KWh |
---|---|
2023 | $139 |
2022 | $161 |
2021 | $150 |
2020 | $160 |
2019 | $183 |
2018 | $211 |
2017 | $258 |
2016 | $345 |
2015 | $448 |
2014 | $692 |
2013 | $780 |
3. EV Adoption is Sustainable
One of the best reasons to invest in lithium is that EVs, one of the main drivers behind the demand for lithium, have reached a price point similar to that of traditional vehicle.
According to the Kelly Blue Book, Tesla’s average transaction price dropped by 25% between 2022 and 2023, bringing it in line with many other major manufacturers and showing that EVs are a realistic transport option from a consumer price perspective.
Manufacturer | September 2022 | September 2023 |
---|---|---|
BMW | $69,000 | $72,000 |
Ford | $54,000 | $56,000 |
Volkswagon | $54,000 | $56,000 |
General Motors | $52,000 | $53,000 |
Tesla | $68,000 | $51,000 |
4. Electricity Demand in Transport is Growing
As EVs become an accessible transport option, there’s an investment opportunity in lithium. But possibly the best reason to invest in lithium is that the IEA reports global demand for the electricity in transport could grow dramatically by 2030:
Transport Type | 2022 | 2025 | 2030 |
---|---|---|---|
Buses 🚌 | 23,000 GWh | 50,000 GWh | 130,000 GWh |
Cars 🚙 | 65,000 GWh | 200,000 GWh | 570,000 GWh |
Trucks 🛻 | 4,000 GWh | 15,000 GWh | 94,000 GWh |
Vans 🚐 | 6,000 GWh | 16,000 GWh | 72,000 GWh |
The Lithium Investment Opportunity
Lithium presents a potentially classic investment opportunity. Lithium and battery prices have dropped significantly, and recently, EVs have reached a price point similar to other vehicles. By 2030, the demand for clean energy, especially in transport, will grow dramatically.
With prices dropping and demand skyrocketing, now is the time to invest in lithium.
EnergyX is poised to exploit lithium demand with cutting-edge lithium extraction technology capable of extracting 300% more lithium than current processes.
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