LORD COPPER: Governments risk scoring own goals if they treat EVs as a political football

Governments around the world are keen to prove their green credentials by announcing target dates for the end of sales of vehicles powered by internal combustion engine vehicles and their total replacement by electric ones.

The actual demands of different governments vary. Norway, at the forefront of EV take-up, originally believed it could phase out its subsidies by 2015: now, the target has moved to at least 2020, with an intention to achieve zero emissions for all new cars by 2025.

China has a mandatory requirement of 12% of all new car sales to be EVs by 2020; India wants to see only EVs sold by 2030, also this appears not to be official government policy at present

And in the European Union, the United Kingdom, France, Germany and The Netherlands have set targets for a ban on the sales of petrol and diesel vehicles of (variously) 2030 and 2040.

While this is all good stuff (with the usual proviso that maybe hydrogen fuel cells will be the true answer), what concerns me is that these targets may become a political football, with point-scoring becoming more important than a rational consideration of the facts.

Indeed, I recently listened to an interview with a representative for the UKOpposition that was strong on blanket criticism of the pace set by the government but lacking in understanding of the issues involved.

That’s disturbing because this is a subject of far more importance than just which political persuasion gets to occupy the high ground. It’s about the ability of the extractive industries to find and produce the massively increased tonnages of metals to switch the world from the status quo of internal combustion engines to an electrically powered environment.

I won’t run through all of the estimated numbers but one or two will serve as an example. To shift from petrol and diesel cars to electric ones will increase copper demand by around 8.5 million tonnes per year (that represents the net difference in usage to around 80 kg in an electric car from around 20 kg per current car); that’s an increase of around one third in annual copper consumption.

The expected growth rate of lithium-ion battery production over the next decade or so is 21-22%. To put that another way, in 2015, the output of batteries produced was 15.9Gwh; by 2024, according to current estimates of the growth of EVs, that requirement will be 93.1Gwh.

In 2016, EVs used 40,000 tonnes of nickel; the 2025 estimate is 220,000 tonnes - in a market of just over 2 million tonnes per year. As well as those, we could look at the changing demand pattern for aluminium, cobalt, graphite and so on.

On top of that, there are questions of ethical mining, particularly regarding cobalt in the Democratic Republic of Congo (DRC) - not an issue that will retreat from the front line of concern. I’m not being negative here but I am concerned that the imposition of what appear in many ways to be arbitrary political targets is not particularly helpful, especially when they risk being dictated by expediency and the desire to outbid one’s opponents in green credentials.

There are significant advantages to the user in electric vehicles; the tipping point - when demand for them finally outstrips that for petrol or diesel cars - will come as a natural development. Governmental interference will not actually change anything.

Such a substantial change in manufacturing and consumption requires understanding and, probably, assistance - not authoritarian demands from publicity-seeking politicians.

Right now, the most influential figure for this change is Elon Musk (and Tesla Motors); if he fails with his Model 3 mid-market product, any targets set will come to look pretty silly, I suspect. For sure, others will take up the slack but timings such as those outlined above will no longer apply.

Lord Copper



Lord Copper

June 29, 2018

11:30 GMT