The Road To More Sustainable Transportation through Electric Vehicles

As COVID-19 continues to ravage nations around the world it has not only brought attention to countries’ need to be prepared for a pandemic, but also to how we have to actively and constantly innovate in order to prevent a climate disaster. According to the International Energy Agency (IEA), the drop in economic activity due to COVID-19 has led to a decrease in global emissions by around 8%. However, the way this was achieved is still not sustainable. As such, it is vital that climate change is being addressed in all countries and industries.

One particular area that has tremendous potential and opportunity is the transportation industry. Another report by the IEA mentioned that transportation accounted for 24% of global direct CO2 emissions from fuel combustion in 2019. However, the advent of improved battery technology and Electric Vehicles (EVs) have provided an alternative to the traditional gasoline, diesel, and other less eco-friendly options. Batteries have seen an 85% drop in price since 2010 and increased competition between automotive makers has created more options for consumers to purchase an EV. However, as EVs are more suited for short-haul travel, and their batteries are heavy and bulky, there is a demand for more advanced battery technology that produces lighter, more compact, longer-lasting, and fast charging batteries to further push the transportation industry towards EVs.

The traditional lithium-ion batteries that are found in today’s EVs are composed of cobalt-based cathode material. As cobalt is a rare and expensive element, it contributes to the overall high cost of EVs. As such, eliminating it from batteries in favor of next-generation, lower cost alternatives such as lithium-iron phosphate batteries have been growing in prominence. This is ultimately aimed at lowering the cost of batteries below the US$100/kWh threshold—a proxy for making EVs as cheap as their Internal Combustion Engine (ICE) vehicle counterparts. Tesla, currently the world’s largest manufacturer of EVs, has worked with Panasonic to develop the 2170 Tesla lithium-ion cell. These cells are 10-15% more energy efficient compared to the Panasonic 18650 cells that have been used in their previous vehicles, such as the Model S and Model X. They also have a reduction in cobalt content and improve energy density by 5%, which would lead to an increase in total capacity output while maintaining the size of the battery pack.

However, there are some hurdles that might hinder the achievability of that goal. According to ABI Research’s Electric Vehicle Battery and Charging Technologies (AN-5152) Application Analysis Report, the cost of batteries has decreased dramatically, to about US$150/kWh in 2019, and is set to further compress to US$50/kWh by 2025. Even though a decrease in cobalt use would lower costs, nickel, which is another element in traditional batteries, also plays a part in pricing. Thus, having new alternatives that are not composed of expensive components could potentially drive costs down and create a transition toward cost-effective EVs. One company that could drive this transition is QuantumScape. The company’s solution of solid-state batteries enables increased range, faster charging times, lower costs and enhanced safety. Their batteries could double the range of current EVs and eliminate the risk of thermal runways. Volkswagen, among many other investors, has invested US$300 million in QuantumScape and plans to establish a production line for these batteries by 2025.

According to ABI Research’s Vehicle and Mobility Market Data (MB-MBI-104), it is forecasted that Plug-in Electric Vehicle (PEV) sales will increase to 9.73 million in 2025 from 2.94 million in 2020, a five-year Compound Annual Growth Rate (CAGR) of 27.1%. This strong growth provides some indication as to the growing perception of EVs being an integral part of the transportation industry. However, without continuous innovation and improvements to battery technology, this trend could slow down as consumers remain rooted to the lower cost ICE vehicles that are widely available. Battery manufacturers such as Panasonic, CATL, and LG can achieve this by improving range, enabling faster charging, building more compact battery packs, and driving the cost down to levels close to those of ICE vehicles. This would not only improve consumers’ perception towards EVs’ reliability, but also make buying one more “normal.”

With 17 countries so far having announced 100% zero-emission vehicle targets or the phase-out of ICE vehicles through 2050, the trend of countries and governments increasing focus on reducing emissions continues to grow. Improving the efficiency of EVs and making them widely available to consumers around the world could aid in speeding up the transportation industry’s process toward zero emissions and make the way we move around more sustainable.