The first electric battery powered taxis were introduced in London in 1897, but it has taken more than 120 years for electric vehicle (EV) sales to gain significant traction. While global electric car stock took until 2015 to exceed a million vehicles, this figure had surpassed five million by 2018. Similarly, the installation of electric charging infrastructure has only seen a significant increase in the last four years.
Traditional internal combustion engines remain by far the dominant vehicle type for new passenger cars. EV sales account for just 1% of total vehicle sales globally, while it is only 2% in Europe. Nevertheless, it is clear the move away from conventional vehicles will impact both car manufacturers and oil and gas majors wedded to conventional fossil fuels.
Accordingly, some oil and gas giants have actively been looking to diversify. Many European players have been acquiring charging networks. Notable deals include the BP’s acquisition of Chargemaster, the UK’s leading electric vehicle charging network. Shell and Total have also entered the EV charging market.
In addition, many traditional car manufacturers have made commitments to EV production and announced plans to invest in EV and battery technology. For now, EVs represent only a small portion of revenues, with the EV leader in Europe, BMW Group, delivering approximately 75,000 vehicles across Europe in 2018 – accounting for 7.2% of the company’s sales. Based on announced targets, the share of EV sales should increase across the sector. For example, Volkswagen expects EVs to account for 5% of sales by 2025.
Although customer demand might be drifting towards environmentally friendly vehicles, regulation will have to be a key driver in this transition. Norway has seen the largest adoption of electric cars per capita in the world, due to incentives such as VAT exemptions on EV purchases, as well as free charging and parking in many locations. More countries are announcing the phase out of combustion engines, with the UK Government proposing a deadline of 2040. Municipalities are also forbidding diesel vehicles from enter city centres and low emission zones are becoming more frequent.
Behind the batteries
While we welcome the role increasing EV adoption will play in reducing global carbon emissions, it is necessary to examine the ‘clean’ alternative to internal combustion engines from all angles. Tailpipe emissions will certainly disappear, but the full environmental and social impacts of EVs need to take into account production, sourcing of materials, the electricity powering the vehicle and end-of-life recycling.
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The supply chain for electric vehicles is extremely complex and presents many challenges, particularly in obtaining the metal resources needed. According to a study by scientists from the UK’s Natural History Museum, to replace all UK-based vehicles on the road today with electric alternatives would require 208 thousand tonnes of cobalt and 265 thousand tonnes of lithium carbonate, as well as 2.4 million tonnes of copper. Broadening this to a global scale of approximately two billion cars, copper output would need to more than double and cobalt output would need to increase at least three and a half times from now until 2050.
Some of the minerals present in lithium-ion batteries, such as cobalt, are linked to human rights abuses. Amnesty International reports pervasive child labour in cobalt mining in the Democratic Republic of Congo (DRC). With more than half of the world’s cobalt originating in southern DRC, the chance batteries powering electric vehicles are tainted with child labour and other abuses is unacceptably high.
In addition, the technology remains difficult to scale in commercial vehicles operating over long distances. The weight and size of batteries, as well as long charging times, have slowed adoption. In London, electric buses are still a minority, with fewer than 200 electric buses circulating in the capital.
Therefore, the environmental and social impacts of this promising alternative are far from neutral. If we are to benefit from the low-carbon alternative EVs present, the vast amounts of materials needed, as well as the negative environmental and social impacts of the extraction process, will need to be taken into account in any sustainable transition.
