The Massive Impact of EVs on Commodities
How demand would change in a 100% EV world
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
What would happen if you flipped a switch, and suddenly every new car that came off assembly lines was electric?
It’s obviously a thought experiment, since right now EVs have close to just 1% market share worldwide. We’re still years away from EVs even hitting double-digit demand on a global basis, and the entire supply chain is built around the internal combustion engine, anyways.
At the same time, however, the scenario is interesting to consider. One recent projection, for example, put EVs at a 16% penetration by 2030 and then 51% by 2040. This could be conservative depending on the changing regulatory environment for manufacturers – after all, big markets like China, France, and the U.K. have recently announced that they plan on banning gas-powered vehicles in the near future.
The Thought Experiment
We discovered this “100% EV world” thought experiment in a UBS report that everyone should read. As a part of their UBS Evidence Lab initiative, they tore down a Chevy Bolt to see exactly what is inside, and then had 39 of the bank’s analysts weigh in on the results.
After breaking down the metals and other materials used in the vehicle, they noticed a considerable amount of variance from what gets used in a standard gas-powered car. It wasn’t just the battery pack that made a difference – it was also the body and the permanent-magnet synchronous motor that had big implications.
As a part of their analysis, they extrapolated the data for a potential scenario where 100% of the world’s auto demand came from Chevy Bolts, instead of the current auto mix.
If global demand suddenly flipped in this fashion, here’s what would happen:
|Lithium||2,898%||Needed in all lithium-ion batteries|
|Cobalt||1,928%||Used in the Bolt's NMC cathode|
|Rare Earths||655%||Bolt uses neodymium in permanent magnet motor|
|Graphite||524%||Used in the anode of lithium-ion batteries|
|Nickel||105%||Used in the Bolt's NMC cathode|
|Copper||22%||Used in permanent magnet motor and wiring|
|Manganese||14%||Used in the Bolt's NMC cathode|
|Aluminum||13%||Used to reduce weight of vehicle|
|Silicon||0%||Bolt uses 6-10x more semiconductors|
|Steel||-1%||Uses 7% less steel, but fairly minimal impact on market|
|PGMs||-53%||Catalytic converters not needed in EVs|
Some caveats we think are worth noting:
The Bolt is not a Tesla
The Bolt uses an NMC cathode formulation (nickel, manganese, and cobalt in a 1:1:1 ratio), versus Tesla vehicles which use NCA cathodes (nickel, cobalt, and aluminum, in an estimated 16:3:1 ratio). Further, the Bolt uses an permanent-magnet synchronous motor, which is different from Tesla’s AC induction motor – the key difference there being rare earth usage.
Big Markets, small markets:
Lithium, cobalt, and graphite have tiny markets, and they will explode in size with any notable increase in EV demand. The nickel market, which is more than $20 billion per year, will also more than double in this scenario. It’s also worth noting that the Bolt uses low amounts of nickel in comparison to Tesla cathodes, which are 80% nickel.
Meanwhile, the 100% EV scenario barely impacts the steel market, which is monstrous to begin with. The same can be said for silicon, even though the Bolt uses 6-10x more semiconductors than a regular car. The market for PGMs like platinum and palladium, however, gets decimated in this hypothetical scenario – that’s because their use as catalysts in combustion engines are a primary source of demand.
Visualizing Copper’s Role in the Transition to Clean Energy
A clean energy transition is underway as wind, solar, and batteries take center stage. Here’s how copper plays the critical role in these technologies.
A future powered by renewables is not in the distant horizon, but rather in its early hours.
This new dawn comes from a global awareness of the environmental impacts of the current energy mix, which relies heavily on fossil fuels and their associated greenhouse gas emissions.
Technologies such as wind, solar, and batteries offer renewable and clean alternatives and are leading the way for the transition to clean energy. However, as with every energy transition, there are not only new technologies, but also new material demands.
Copper: A Key Piece of the Puzzle
This energy transition will be mineral intensive and it will require metals such as nickel, lithium, and cobalt. However, one metal stands out as being particularly important, and that is copper.
Today’s infographic comes to us from the Copper Development Association and outlines the special role of copper in renewable power generation, energy storage, and electric vehicles.
The red metal has four key properties that make it ideal for the clean energy transition.
It is these properties that make copper the critical material for wind and solar technology, energy storage, and electric vehicles.
It’s also why, according to ThinkCopper, the generation of electricity from solar and wind uses four to six times more copper than fossil fuel sources.
Copper in Wind
A three-megawatt wind turbine can contain up to 4.7 tons of copper with 53% of that demand coming from the cable and wiring, 24% from the turbine/power generation components, 4% from transformers, and 19% from turbine transformers.
The use of copper significantly increases when going offshore. That’s because onshore wind farms use approximately 7,766 lbs of copper per MW, while an offshore wind installation uses 21,068 lbs of copper per MW.
It is the cabling of the offshore wind farms to connect them to each other and to deliver the power that accounts for the bulk of the copper usage.
Copper in Solar
Solar power systems can contain approximately 5.5 tons of copper per MW. Copper is in the heat exchangers of solar thermal units as well as in the wiring and cabling that transmits the electricity in photovoltaic solar cells.
Navigant Research projects that 262 GW of new solar installations between 2018 and 2027 in North America will require 1.9 billion lbs of copper.
Copper in Energy Storage
There are many ways to store energy, but every method uses copper. For example, a lithium ion battery contains 440 lbs of copper per MW and a flow battery 540 lbs of copper per MW.
Copper wiring and cabling connects renewable power generation with energy storage, while the copper in the switches of transformers help to deliver power at the right voltage.
Across the United States, a total of 5,752 MW of energy capacity has been announced and commissioned.
Copper in Electric Vehicles
Copper is at the heart of the electric vehicle (EV). This is because EVs rely on copper for the motor coil that drives the engine.
The more electric the car, the more copper it needs; a car powered by an internal combustion engine contains roughly 48 lbs, a hybrid needs 88 lbs, and a battery electric vehicle uses 184 lbs.
Additionally, the cabling for charging stations of electric vehicles will be another source of copper demand.
The Copper Future
Advances in technologies create new material demands.
Therefore, it shouldn’t be surprising that the transition to renewables is going to create demand for many minerals – and copper is going to be a critical mineral for the new era of energy.
How Much Oil is in an Electric Vehicle?
It is counterintuitive, but electric vehicles are not possible without oil – these petrochemicals bring down the weight of cars to make EVs possible.
How Much Oil is in an Electric Vehicle?
When most people think about oil and natural gas, the first thing that comes to mind is the gas in the tank of their car. But there is actually much more to oil’s role, than meets the eye…
Oil, along with natural gas, has hundreds of different uses in a modern vehicle through petrochemicals.
Today’s infographic comes to us from American Fuel & Petrochemicals Manufacturers, and covers why oil is a critical material in making the EV revolution possible.
It turns out the many everyday materials we rely on from synthetic rubber to plastics to lubricants all come from petrochemicals.
The use of various polymers and plastics has several advantages for manufacturers and consumers:
- Easy to Shape
- Flame Retardant
Today, plastics can make up to 50% of a vehicle’s volume but only 10% of its weight. These plastics can be as strong as steel, but light enough to save on fuel and still maintain structural integrity.
This was not always the case, as oil’s use has evolved and grown over time.
Not Your Granddaddy’s Caddy
Plastics were not always a critical material in auto manufacturing industry, but over time plastics such as polypropylene and polyurethane became indispensable in the production of cars.
Rolls Royce was one of the first car manufacturers to boast about the use of plastics in its car interior. Over time, plastics have evolved into a critical material for reducing the overall weight of vehicles, allowing for more power and conveniences.
Rolls Royce uses phenol formaldehyde resin in its car interiors
Henry Ford experiments with an “all-plastic” car
About 20 lbs. of plastics is used in the average car
Manufacturers begin using plastic for interior decorations
Headlights, bumpers, fenders and tailgates become plastic
Engineered polymers first appear in semi-structural parts of the vehicle
The average car uses over 1000 plastic parts
Electric Dreams: Petrochemicals for EV Innovation
Plastics and other materials made using petrochemicals make vehicles more efficient by reducing a vehicle’s weight, and this comes at a very reasonable cost.
For every 10% in weight reduction, the fuel economy of a car improves roughly 5% to 7%. EV’s need to achieve weight reductions because the battery packs that power them can weigh over 1000 lbs, requiring more power.
Today, plastics and polymers are used for hundreds of individual parts in an electric vehicle.
Oil and the EV Future
Oil is most known as a source of fuel, but petrochemicals also have many other useful physical properties.
In fact, petrochemicals will play a critical role in the mass adoption of electric vehicles by reducing their weight and improving their ranges and efficiency. In According to IHS Chemical, the average car will use 775 lbs of plastic by 2020.
Although it seems counterintuitive, petrochemicals derived from oil and natural gas make the major advancements by today’s EVs possible – and the continued use of petrochemicals will mean that both EVS and traditional vehicles will become even lighter, faster, and more efficient.
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