Abstract: The IEA expects the global electric vehicle industry to continue to achieve strong growth this year, reaching about 17 million units, accounting for more than one-fifth of global car sales.
On April 23, the International Energy Agency (IEA) released a report titled "Global Electric Vehicle Outlook 2024".
Around 17 million electric vehicles are expected to be sold worldwide in 2024
According to the report, global electric vehicle sales in 2023 will be close to 14 million, accounting for 18% of total sales, compared to 14% in 2022. China continues to lead the way in the manufacture and sale of electric vehicles. In 2023, more than 60% of electric vehicles sold in China will be more cost-effective than traditional combustion engine vehicles with the same performance.
The report also mentions that ensuring the availability of public charging facilities keeps pace with EV sales is critical to sustaining the growth momentum. In 2023, the number of public charging stations installed worldwide will increase by 40% compared to 2022. However, in order to reach the level of EV deployment promised by governments, the charging network will still need to grow six-fold by 2023.
In the first quarter of this year, global electric vehicle sales increased by about 25% year-on-year, which is basically the same as the full year of 2020.
On this basis, the IEA expects the global electric vehicle industry to continue to achieve strong growth this year, reaching about 17 million units, accounting for more than one-fifth of global car sales.
Among them, in 2024, China's electric vehicle sales are expected to jump to about 10 million units, accounting for about 45% of the country's car sales. The U.S. and Europe are expected to account for one-ninth and one-quarter of their total vehicle sales, respectively.
In addition, the demand for electric vehicles in emerging markets such as Vietnam and Thailand is also accelerating.
"Far from being sluggish, the global EV revolution seems to be preparing for a new phase of growth. "Looking at the current policy setting alone, almost one in three cars on China's roads will be electric by 2030, compared to almost one in five in the United States and the European Union." This shift will have a significant impact on the automotive and energy industries. ”
The growth in electric vehicle sales boosted the demand for power batteries
Driven by the growth in electric vehicle sales, battery demand has also continued its upward trend in recent years.
The report mentions that the global demand for electric vehicle batteries will exceed 750GWh in 2023, an increase of 40% from 2022, but the annual growth rate has slowed slightly from 2021-2022.
Among them, in 2023, the United States and Europe are the fastest-growing major EV markets, with a year-on-year increase of more than 40%, followed by China with an increase of about 35%.
Despite this, the U.S. remains the smallest of the three markets, with power battery demand in the U.S. at around 100GWh in 2023, compared to 185GWh in Europe and 415GWh in China. In the rest of the world, battery demand growth jumped to more than 70% in 2023 compared to 2022 due to increased sales of electric vehicles.
In China, PHEVs accounted for about one-third of total EV sales in 2023 and contributed 18% of battery demand, up from 25% in 2022 and 17% in 2021. PHEV batteries are smaller than those used in BEVs and therefore contribute less to the growth of battery demand.
In terms of production capacity, in 2023, battery manufacturing capacity in China and the United States will increase by more than 45% compared to 2022, and in Europe by nearly 25%. If the current trend continues, the U.S. will have more capacity than Europe by the end of 2024, supported by policies such as the U.S. IRA.
The new EV battery capacity in Europe and the U.S. is mainly contributed by Asian companies. For example, South Korean companies have more than 350GWh of cell production capacity outside of South Korea, Japanese companies have 57GWh of battery capacity outside of Japan, and Chinese companies have close to 30GWh of battery capacity outside of China. About 75% of existing battery production capacity in Europe is owned by South Korean companies, with LG's plant in Poland alone accounting for 50%. Battery production capacity in the U.S. is currently mainly contributed by Tesla, Panasonic, SK On, and LG.
The report also mentions that China is the world's largest exporter of EV batteries, with about 12% of EV battery exports. In addition, at present, nearly 90% of the world's cathode material production capacity and more than 97% of the anode material production capacity are in China.
The decline in the price of key metals such as lithium has led to the price reduction of batteries
At the same time, the growth of demand for power batteries is also the biggest driving force for the increase in demand for key metals such as lithium.
According to the report, in 2023, the global demand for lithium for batteries will be about 140 tons, accounting for 85% of the total lithium demand, an increase of more than 30% from 2022, and the demand for cobalt will increase by 15% to 150,000 tons, accounting for 70% of the total. The growth in battery demand has given a relatively small boost to total nickel demand, accounting for more than 10% of total nickel demand. Demand for nickel from batteries will be close to 370 tonnes in 2023, up nearly 30% from 2022.
The IEA said the supply of critical metals such as lithium is relatively ample due to high investment in mineral resources over the past few years. In 2023, the supply of cobalt and nickel exceeded demand by 6.5% and 8%, respectively, and the supply of lithium exceeded demand by more than 10%, reducing critical mineral prices and battery costs, but also leading to lower cash flow and lower profit margins for mining companies.
At the same time, the low price of critical minerals has also led to a decline in battery prices. The turmoil in the battery metals market led to the cost of lithium-ion battery packs rising for the first time in 2022, with prices rising by 7% from 2021. But the price of key battery metals such as lithium fell in 2023, and by the end of 2023, prices including cobalt, graphite and manganese were below the 2015-2020 average, although lithium carbonate prices were still about 50% higher than the 2015-2020 average at the end of 2023, still causing battery pack prices to fall by nearly 14% over the past two years.
The IEA believes that innovative technologies such as sodium-ion batteries may reduce the demand for critical minerals. Similar to lithium iron phosphate, sodium-ion batteries were originally developed in the United States and Europe, but currently China's announced sodium-ion production capacity is estimated to be about ten times higher than the rest of the world combined, and manufacturing capacity outside of China is still in the laboratory or pilot stage.
In 2023, battery companies such as BYD, Northvolt, and CATL announced plans to expand the production capacity of sodium-ion batteries. If scaled up, sodium-ion batteries could cost up to 20% less than existing technologies and are suitable for applications such as compact electric vehicles and energy storage.
However, the development and cost advantages of sodium-ion batteries are largely dependent on lithium prices, and the current low operation of metal materials such as lithium has hindered investment in sodium-ion batteries and delayed expansion plans. In addition, supply chain bottlenecks, such as high-quality cathode and anode materials, may also hinder the near-term expansion of sodium-ion batteries.