Visualizing The Massive Impact Of EVs On Commodities

Tyler Durden's picture

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, as Visual Capitalist's Jeff Desjardins notes, 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.

Courtesy of: Visual Capitalist

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.

THE IMPLICATIONS

If global demand suddenly flipped in this fashion, here’s what would happen:

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.

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Internet-is-Beast's picture

Here come the lithium wars, folks! They will be fought by lithium powered ERS's (electronic robotic soldiers).

roodeetoodee's picture

Errrmm... here "come" the lithium wars?

WTF do you think Afghanistan is all about? The Teliban?

Byte Me's picture

Pfff..

Just mine the earth's core. Plenty of nickel there. Probably a shedload of cobalt too..

..(no /sarc tags were wasted in this comment)..

Pinto Currency's picture

This ignores the materials to upgrade the grid.
BLDP is going to kill lithium auto bats.

Mr 9x19's picture

only 3000 billion worth materia... a peanut.

 

actual pace... couple of years production ...

you don't set a civilization on long term when you have no control over your ressources,  waste your ressources, consider yourself as god with overdimensioned egos and have not found a way to displace something without making sacrifice.

 

honnestly, mankind is shit.

 

 

Itinerant's picture

This is all based on extrapolation. Many revolutionary battery and capacitator techniques are still in laboratories. Impossible to say what that will mean for weight, action radius, and materials. Self-driving cars that easily go 1 million miles (no moving parts) are going to change the usage patters, with perhaps far fewer vehicles, much less parking space, higher travel speeds, and far more intensive use of the vehicle fleet. Extrapolating to 100% EV on the basis of the first fledgling introductions is a fool's errand.

Schmuck Raker's picture

"Extrapolating .... is a fool's errand."

Thus the 30+ BANK ANALYSTS involved! :-)

moorewasthebestbond's picture

Electric Vehicles are the biggest farce since ruining perfectly good gasoline with 10% ethanol.

 

These revolutionary Electric Vehicles just get plugged into the same old coal and gas burning power plants.

Mr 9x19's picture

shhhhhht, don't say it loud, you would anger some ! lol

 

it is not time yet to explain to morrons they have no futur.

Flash44's picture

Even worse the ethanol tears up small engines and motorcycles. Ethanol cost way more to produce than gasoline and it doesnt even burn that well. 

Kefeer's picture

The main reason I no longer watch NASCAR - ethanol.

not dead yet's picture

When the media asked the Sierra Club and other enviro organizations their opinion about C02 emissions being way down due to the increase of the nat gas at the expense of coal they got a surprising answer. After gloating over their victory over coal they said they were going after gas next. If they manage to decimate the gas industry where are we going to get the electricity to power the EV's when our homes and every other gas user has to switch over to electric to heat our homes. Not to mention trying to power a modern society on "renewables." There isn't a big push for it in the US, yet, but many in Britain are working to make it happen. Do we heat the house when it's 20 below or charge the car. More like every tree will be cut down for heat. At this very moment they are cutting down trees in the southern US and turning them into pellets for burning in power plants in Britain. Trees are "renewable" and called bio fuel. Yet burning wood pollutes worse than coal. Even though going after gas doesn't make sense the wood pellet fiasco proves the enviros aren't that bright. Cut trees that absorb C02 "pollution" and burn them creating more real pollution than coal or fossil fuels. They are in the process of hugely expanding the tree cutting and pellet production down south. Going after gas may seem unbelievable to you but it's happening.

spdrdr's picture

Too true, dat!

The Drax power station in England was converted from dirty coal to "renewable" wood-chips, imported from the USA.

Just ask the POMs how much this is costing them.

Then again, to fulfil the goals of our New World leaders, "electricity rates would necessarily skyrocket'.

Evidence: See https://www.youtube.com/watch?v=HlTxGHn4sH4

HalinCA's picture

There is no logic to the plans of the new world leaders ... unless they mean to impliment a robotic based economy and wipe out 99% of the world's population so only they and their progeny survive to live in their version of paradise ...

Kefeer's picture

Actually there is coming a 7 year period where 50% of the world's population will be destroyed by war, famine and pestilence.  It will come to pass as everything God has said does.

Itinerant's picture

Solar. Solar is 3000x cheaper than it was 30 years ago relative to fossil fuel generation. Every year the price/performance ratio improves by 14%, that's a doubling time of 5 years. Solar is already the cheapest electricity in places with gooed solar resources.

Mr 9x19's picture

solar.. lol... free energy for all ?

 

  1. green energy transformers are made from fossil energy, you not use solar plants to make solar panels.
  2. giving everybody ability to generate energy for free will cut the revenue of the energy corp. dream on.
  3. solar panel is not free, price of efficiency will raise over time, to cap market to keep it under control.
  4. lifespan is an issue, solar panel is made with fossil components, when you  cut fossil ressources, you not generate panel from thin air.

the world is not ready for such shift.  and in my opinion, will never be until we do not overpass money & propriety concepts.

not going to happen anytime soon.

TheSilentMajority's picture

They forgot to add coal to their list.

As most electric vehicles are actually charged via electricity produced by coal, what would be the impact on coal demand??

More honest to call them CVs(coal vehicles) instead of EVs.

quasi_verbatim's picture

I've heard gold demand is going up 1000% for coinage.

Calculus99's picture

For every jackass that doesn't like oil (and to a lesser degree coal) you do realise you'd be living in a mud hut without it. 

So do as I do and say thanks for Oil every now and then.

PS. If you do want to go 'green, then a) stop talking about it, and b) do something about it, ie no car (only public transport), 1-2 flights max a year, no imported foods, little heating/aircon and so on. But of course you won't do that, easier to just 'talk' and moan.   

Kefeer's picture

Show me a country that isn't energized by "fossil fuels" and we will show you a 3rd world disaster.

css1971's picture

Next generation batteries will be sodium based.

Lithium is too expensive.

peekster's picture

65% of cobalt can be found in the Democratic Repulic of Congo. Time for some "freedom" me thinks............?

Aussiekiwi's picture

Yes, time to free the people of the Congo by carpet bombing the Country, followed by regime change and then some lucrative Cobalt contracts to US companies, just got to love the  way the military industrial complex works together just like a well oiled, well... military industrial complex.

 

Or,,, they could get wise and just give us the contracts for free and avoid all of the Instilling democracy stuff, no pressure.

Kefeer's picture

You have it correct except a minor change from US companies to US based companies.  These multinational companies, part of the MIC, play both sides of all isles - playing Satan's strategy of "divide and conquer".  

The conquered part is the individual souls being damned to hell for all eternity.  Jesus said "I have conquered the world"; meaning He is the only way to escape from the enslavement of ones soul to the world, the flesh and the devil.

roddy6667's picture

If everything changed to EV's the US grid would collapse. People would think North Korea or Russia had launched an EMP attack on America. The country has brownouts during every heat wave. The utility companies have been working overtime to REDUCE electrical usage for decades. An increase would cause a meltdown. Maybe that should happen. Then all the Greenies would be hunted down and used for fuel and the problem would be solved.

Kefeer's picture

This you will NEVER see as part of the cobalt mining.  It is 8 minutes long, but worth watching.

https://www.youtube.com/watch?v=7x4ASxHIrEA  (Progressives exploit the poor more than any other group in society)

Last of the Middle Class's picture

And exactly how do you think we produce the electrons that are needed to charge all these EV autos? Funny how no one wants to factor that into the equation. They're psychoses is dependent on the fact that electricity produced by fossil fuels for charging stations is some how more efficient that autos that run of fossil fuels and completely bypass the entire EV process.

OCnStiggs's picture

Who do you think are pushing the EV "revolution?" The Environmentalists? How about the Globalists?

Just like the MIC, they make trillions on this kind of mass evolution. Global warming is their "invention" in order to create a "boogeyman" that requires bigger and more powerful government (and taxes) to fight. If you truly care about the environment, think about this:

It has been estimated the production of an EV costs about four times the environmental damage of producing a gas vehicle, largely due to the environmental damage of producing the battery. At about the fifth year, the EV is on par with the gasser. But wait! At the 5 year point, the EV requires a new battery! Once installed, the EV is working its way out of the deficit again. By the time you factor in the increased environmental damage from coal-fired power plants, EVs provide little, if any, benefit to the environment.

As someone earlier said, I call them "coal-fired" cars, because its the truth.

Herodotus's picture

The annual cost to the US Treasury if all of the 17,000,000 cars sold in the USA were electric would be $1.275 Trillion dollars.  This would mean that the entire Defense Department would have to be eliminated.

PodissNM's picture

But if you simply ban new combustion engine vehicles then you don't need to (monetarily) subsidize electric vehicles. (Though the ban itself is of course a massive subsidy)

Let it Go's picture

While much attention has been focused on electric cars and companies like Tesla we should not write the idea of hydrogen-powered automobiles off just yet. Among the automakers which are trying to bring this technology closer to customers, Honda, Toyota and Hyundai are leading the efforts in fuel-cell development.

Tesla has invested a huge five billion dollars in a new battery factory. Adoption of the fuel cell as the most desirable way to power not only vehicles but other power hungry devices would be a big setback for Tesla. More on this subject in the article below.

 http://brucewilds.blogspot.com/2016/04/fuel-cell-car-trump-teslas-vision.html

TOMMYV's picture

Let me just list some of the jobs that would be lost if that swith were flipped. no need for gas stations, oil change, exhaust, emissions testing, transmission, engine, and other auto repair, I would assume the majority of auto repair and parts stores would close. how many people depend on the cumbustion engine fortheir livelihood?

DCFusor's picture

Citation needed on that coal thing - my Volt has yet to be connected to the grid since 2011 anyway...

https://en.wikipedia.org/wiki/Electricity_sector_of_the_United_States

All charged by my solar array, which like many others, is unreported in that data (for property tax avoidance reasons).  I'm not alone according to the other members of the Volt fan clubs.

I use one tank of gas (8 gallons) a year as the car demands it to keep the engine oiled up and corrosion free.

Yes, the buggy whip makers go out of business when the next mode arrives.  Twas ever thus.  And liars use fake or older numbers from the old tech heyday to push their resistance to change - always, as shown here.

Drive what you like, while you can.  There will probably be a tax on horse-buggy poop coming your way at some point.

bytebank's picture

Better build a shitload of Power plants and the electric network to carry that extra capacity. Never going to happen.

 

Each gas engine is its own powerplant. There are 200 million plus cars in the US alone. If everyone plugged in their car after getting home from work the power lines would melt down. Can't even handle air conditioning demand on hot days.

bytebank's picture

Better build a shitload of Power plants and the electric network to carry that extra capacity. Never going to happen.

 

Each gas engine is its own powerplant. There are 200 million plus cars in the US alone. If everyone plugged in their car after getting home from work the power lines would melt down. Can't even handle air conditioning demand on hot days.

Sapere aude's picture

The problem with this story is its complete hypothesis of something that cannot happen, both from the resource point of view and from logic.

 

Perspective on Electric vehicles.

"Even if electric vehicles do grow as rapidly as BNEF forecasts, the world currently consumes 95 million barrels a day and other sources of demand will keep growing, said Spencer Dale, BP’s chief economist. The London-based energy giant expects battery-powered cars to reduce oil demand by just 1 million barrels a day by 2035"

Yet they estimate oil consumption will require 110,000,000bbls a day by 2035 with demand failing to peak until 2040.

A problem: shale will be f by then seen as the Ponzi it is, that reduces current production by 6,000,000bbls a day that has to be made up. Ghawar will be just a historic oil field along with most of the other super giant fields in massive decline along with many of the very mature oil fields of ME.

 

The other problem is at 96,000,000bbls a day now, with what 8,000,000 shale the other 88,000,000 still has a depletion rate of around 10% now. That's another 8,800,000bbls short that has to be made up to even keep current production let alone addi]ng another 14,000,000bbls a day!

Glut what glut, its bullshit to cover the pending shortages

No wonder the U.S. wants to screw Venezuela into the ground...does it have oil...you bet it does

 

TrumanShow's picture

People just assume the resources will just be available, 3000% increase in lithium? I doubt there is that much available. The price will skyrocket and a substitute will be found, maybe. Where will all the grid power come from, windmills? Don't make me laugh. Standard grid power sources when taken from carbon input to power delivered to the wheels will not be much more efficient if any than an ICE vehicle, the CO2 advantage will be minimal. Hybrids are probably a better bet.