Four trends driving the growth of electric vehicles

Published by Magnis Team on February 3, 2022

It’s clear that Elon Musk’s Tesla, and battery-powered vehicles in general, are here to stay. In fact, it won’t be long before EVs become mainstream and we start to think of gas-guzzlers as being mere curiosity.

According to Deloitte, the electric vehicle (EV) battery market is expected to explode from 2.5 million units sold in 2020 to 11.2 million units sold in 2025 — and a whopping 31.1 million sold in 2030![1]

Let’s look at some trends that are driving this growth.

Advancements in lithium-ion technology

Lithium-ion technology dominates the EV battery market, and it is advancing rapidly. Between 1991–2018, the energy density of lithium-ion batteries more than tripled, while the cost per kilowatt-hour plummeted by 97%.[2]

This technology is the clear winner among the high-quality rechargeable battery technologies, and it continues to improve.

Image source: Roberta A. DiLeo, Rochester Institute of Technology

In fact, Imperium3 New York (iM3NY), of which Magnis Energy Technologies is the major shareholder in the project, is taking this technology to the next level. Beginning in 2022, iM3NY will be producing environmentally friendly batteries that have enhanced safety, longer lifespan, faster charging and at relatively lower cost than the comparable commercialised technology widely used in the market.

Using technology developed by C4V, iM3NY’s first generation of lithium-ion batteries will contain nickel and cobalt-free cathodes — an advancement that also eases pressure on the supply chain. By 2025, C4V and iM3NY hope to release a solid-state lithium-ion battery, which will be a massive game-changer.

Supportive government policies

Governments around the world are enacting policies that are favourable to electric vehicle ownership. Countries like the UK, Germany, China and the U.S. state of California have had subsidy schemes in place for some time, and many even scaled these up during the COVID-19 pandemic.

You can clearly see the results of these policies on EV uptake, by comparing Europe and China in the following chart:

Image source: www.iea.org

In April 2020, China cut its EV subsidies by 10% (albeit, while also extending them for several more years) and uptake slowed. Meanwhile, Germany doubled its EV subsidies and France instituted a generous new incentive package in 2020 — and this is reflected in the skyrocketing sales in Europe.

Regulatory emissions policies are also having an effect on the supply side, motivating manufacturers to develop more fuel-efficient and environmentally friendly options.

Combined, these governmental interventions will help propel an already booming industry.

Increased demand in Asia-Pacific

Asia-Pacific dominated the global market share in 2020, and that’s expected to continue.

With 60% of the world’s population living in Asia-Pacific, many in densely populated urban centres, it’s no surprise that the consumers in this region will be driving the demand for EVs, especially when you factor in increases in purchase parity and widespread governmental support for these vehicles.

As you can see by the chart below, China has driven the growth of EVs in Asia-Pacific and we expect this trend to continue. You may not know this, but China is the largest manufacturer and buyer of electric vehicles in the world and has a long history of supporting EVs.[3]

Image source: www.iea.org

The Climate Crisis

A recent study by the International Council on Clean Transportation found that over its entire life cycle, an EV will release fewer greenhouse gas emissions than its gas-powered counterpart. This holds true whether it plugs into a grid powered by renewables or a grid that’s still powered by coal. [4]

If we’re to move to a truly carbon-neutral future, it will be imperative that we improve our energy-storage capabilities. While we’re making great strides in solar and wind technologies, we need a way to store that energy for those times the sun isn’t shining and the wind isn’t blowing. Otherwise, we’ll always be reliant on natural gas and fossil fuels.

Magnis’ subsidiary iM3NY Lithium-ion Battery Plant also has a low carbon footprint as New York state is the third-largest producer of hydroelectricity in the US. This is due broadly on the fact that New York revised its Clean Energy Standard in 2019 to require 100% carbon-free electricity from both renewable sources and nuclear energy by 2040.

In 2020, New York accounted for 11% of U.S. hydroelectricity net generation, and the state was the third-largest producer of hydroelectricity in the nation, after Washington and Oregon. Magnis’ New York battery plant will benefit from this as it looks to begin full-scale manufacturing of some of the greenest batteries on the market by mid 2022.

Higher demand for EVs means more R&D going toward making more powerful, more efficient, cheaper and cleaner batteries. Leading to cheaper and more efficient EVs and so on. It’s a virtuous cycle.

As alluded to before, governments around the world are waking up to the impacts of fossil fuels: not only the acute impacts like smog and pollution, but also systemic ones leading to extreme and unpredictable weather events.

And as a result, we’re seeing a bigger and bigger push toward EVs and to battery technology in general.

Bottom Line

Whether you’re an investor seeking new industries to invest in, a college student buying your first car or an auto mechanic seeking new career opportunities, it’s worth keeping your eye on the EV market. If recent trends have told us anything, these vehicles are not only here to stay, but will take over the roads before we know it.

[1] https://www2.deloitte.com/us/en/insights/focus/future-of-mobility/electric-vehicle-trends-2030.html

[2] https://en.wikipedia.org/wiki/Lithium-ion_battery

[3] https://en.wikipedia.org/wiki/Electric_vehicle_industry_in_China

[4] https://theicct.org/publications/global-LCA-passenger-cars-jul2021