Global EV Outlook 2020

Entering the decade of electric drive?
EV Charger
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In this report

The Global EV Outlook is an annual publication that identifies and discusses recent developments in electric mobility across the globe. It is developed with the support of the members of the Electric Vehicles Initiative (EVI). Combining historical analysis with projections to 2030, the report examines key areas of interest such as electric vehicle and charging infrastructure deployment, ownership cost, energy use, carbon dioxide emissions and battery material demand.

This edition features case studies on transit bus electrification in Kolkata (India), Shenzhen (China), Santiago (Chile) and Helsinki (Finland). The report includes policy recommendations that incorporate learning from frontrunner markets to inform policy makers and stakeholders that consider policy frameworks and market systems for electric vehicle adoption.

This edition also features an update on the performance and costs of batteries. It further extends the life cycle analysis conducted in Global EV Outlook 2019, assessing the technologies and policies that will be needed to ensure that EV battery end-of-life treatment contributes to the fullest extent to sustainability and CO2 emissions reductions objectives. Finally, it analyses how off-peak electricity demand charging, dynamic controlled charging (V1G) and vehicle-to-grid (V2G) could mitigate the impact of EVs on peak demand, facilitate the integration of variable renewables and reduce electricity generation capacity needs.
The global electric vehicle fleet expanded significantly over the last decade, underpinned by supportive policies and technology advances

Sales of electric cars topped 2.1 million globally in 2019, surpassing 2018 – already a record year – to boost the stock to 7.2 million electric cars.1 Electric cars, which accounted for 2.6% of global car sales and about 1% of global car stock in 2019, registered a 40% year-on-year increase. As technological progress in the electrification of two/three-wheelers, buses, and trucks advances and the market for them grows, electric vehicles are expanding significantly. Ambitious policy announcements have been critical in stimulating the electric-vehicle rollout in major vehicle markets in recent years. In 2019, indications of a continuing shift from direct subsidies to policy approaches that rely more on regulatory and other structural measures – including zero-emission vehicles mandates and fuel economy standards – have set clear, long-term signals to the auto industry and consumers that support the transition in an economically sustainable manner for governments. 

Global electric car stock, 2010-2019

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After entering commercial markets in the first half of the decade, electric car sales have soared. Only about 17 000 electric cars were on the world’s roads in 2010. By 2019, that number had swelled to 7.2 million, 47% of which were in The People’s Republic of China (“China”). Nine countries had more than 100 000 electric cars on the road. At least 20 countries reached market shares above 1%.2

The 2.1 million electric car sales in 2019 represent a 6% growth from the previous year, down from year-on-year sales growth at least above 30% since 2016. Three underlying reasons explain this trend: 

  • Car markets contracted. Total passenger car sales volumes were depressed in 2019 in many key countries. In the 2010s, fast-growing markets such as China and India for all types of vehicles had lower sales in 2019 than in 2018. Against this backdrop of sluggish sales in 2019, the 2.6% market share of electric cars in worldwide car sales constitutes a record. In particular, China (at 4.9%) and Europe (at 3.5%) achieved new records in electric vehicle market share in 2019. 
  • Purchase subsidies were reduced in key markets. China cut electric car purchase subsidies by about half in 2019 (as part of a gradual phase out of direct incentives set out in 2016). The US federal tax credit programme ran out for key electric vehicle automakers such as General Motors and Tesla (the tax credit is applicable up to a 200 000 sales cap per automaker). These actions contributed to a significant drop in electric car sales in China in the second half of 2019, and a 10% drop in the United States over the year. With 90% of global electric car sales concentrated in China, Europe and the United States, this affected global sales and overshadowed the notable 50% sales increase in Europe in 2019, thus slowing the growth trend.
  • Consumer expectations of further technology improvements and new models. Today’s consumer profile in the electric car market is evolving from early adopters and technophile purchasers to mass adoption. Significant improvements in technology and a wider variety of electric car models on offer have stimulated consumer purchase decisions. The 2018-19 versions of some common electric car models display a battery energy density that is 20-100% higher than were their counterparts in 2012. Further, battery costs have decreased by more than 85% since 2010. The delivery of new mass-market models such as the Tesla Model 3 caused a spike in sales in 2018 in key markets such as the United States. Automakers have announced a diversified menu of electric cars, many of which are expected in 2020 or 2021. For the next five years, automakers have announced plans to release another 200 new electric car models, many of which are in the popular sport utility vehicle market segment. As improvements in technical performance and cost reductions continue, consumers are placed in the position of being attracted to a product but wondering if it would be wise to wait for the “latest and greatest model”.

The Covid-19 pandemic will affect global electric vehicle markets, although to a lesser extent than it will the overall passenger car market. Based on car sales data during January to April 2020, our current estimate is that the passenger car market will contract by 15% over the year relative to 2019, while electric sales for passenger and commercial light-duty vehicles will remain broadly at 2019 levels. Second waves of the pandemic and slower-than-expected economic recovery could lead to different outcomes, as well as to strategies for automakers to cope with regulatory standards. Overall, we estimate that electric car sales will account for about 3% of global car sales in 2020. This outlook is underpinned by supporting policies, particularly in China and Europe. Both markets have national and local subsidy schemes in place – China recently extended its subsidy scheme until 2022. China and Europe also recently strengthened and extended their New Energy Vehicle mandate and CO2 emissions standards, respectively. Finally, there are signals that recovery measures to tackle the Covid-19 crisis will continue to focus on vehicle efficiency in general and electrification in particular. 

The infrastructure for electric-vehicle charging continues to expand. In 2019, there were about 7.3 million chargers worldwide, of which about 6.5 million were private, light-duty vehicle slow chargers in homes, multi-dwelling buildings and workplaces. Convenience, cost-effectiveness and a variety of support policies (such as preferential rates, equipment purchase incentives, and rebates) are the main drivers for the prevalence of private charging.

Private electric vehicle slow chargers by country, 2019

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Publicly accessible electric vehicle fast chargers by country, 2019

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Publicly accessible electric vehicle slow chargers by country, 2019

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Publicly accessible chargers accounted for 12% of global light-duty vehicle chargers in 2019, most of which are slow chargers. Globally, the number of publicly accessible chargers (slow and fast) increased by 60% in 2019 compared with the previous year, higher than the electric light-duty vehicle stock growth. China continues to lead in the rollout of publicly accessible chargers, particularly fast chargers, which are suited to its dense urban areas with less opportunity for private charging at home. 

Transport modes other than cars are also electrifying. Electric micromobility options have expanded rapidly since their emergence in 2017, with shared electric scooters (e-scooters), electric-assist bicycles (e-bikes) and electric mopeds now available in over 600 cities across more than 50 countries worldwide. An estimated stock of 350 million electric two/three-wheelers, the majority of which are in China, make up 25% of all two/three-wheelers in circulation worldwide, driven by bans in many Chinese cities on two-wheelers with internal combustion engines. About 380 000 light commercial electric vehicles are in circulation, often as part of a company or public authority vehicle fleet. 

New electric bus registrations by country/region, 2015-2019

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New electric bus registrations in China, 2015-2019

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About half a million electric buses are in circulation, most of which are in China. Although the number of new registrations in 2019 was lower than in previous years due to a gradual subsidy phase-out from 2016 and a decline in the overall bus market, the bus fleets in a number of city centres in China are near-fully or fully electrified and contribute to improve the air quality. Driven by similar air quality concerns, bus electrification is also gaining ground in many other regions: the City of Santiago de Chile is home to the largest electric urban bus fleet outside of China.

Case studies of electric bus deployment in Helsinki (Finland), Shenzhen (China), Kolkata (India) and Santiago de Chile (Chile) highlight the unique nature of each public transit system, the roll-out of electric buses facing context-specific challenges related to network size, ridership, degree of sector privatisation and the availability of funding streams other than fare revenues. 

With Covid-19, urban public transit, including buses, will face challenges of providing high-capacity and affordable services while ensuring health security. There is a risk that commuters may opt temporarily or definitively for personal vehicle options. However, in dense cities of the developing and developed world alike, urban buses provide a key means of transport that is not easily substitutable by cars without exacerbating already severe congestion. Hence, the future of public transit in general and electric buses in particular will be balanced between the impacts of the pandemic, the overall capacity of the urban transport system, and continued government support.

Opportunities for electrification can be seized over the coming decade even in modes where emissions are hard to abate such as heavy-duty trucks, aviation and shipping. Global sales of electric trucks hit a record in 2019 with over 6 000 units, while the number of models continue to expand. High-power chargers are being developed and standardised globally. Research on dynamic charging concepts, as well as demonstrations of catenary line solutions, may enable expansion of the range of operations for heavy-duty and long-distance operations for regional buses and long-haul trucking. Electrification of shipping operations at ports is increasingly common and is gradually being mandated by legislation in Europe, China, and, in the United States, California. In aviation, electric taxiing (i.e. the electrification of ground operations in aircraft) offers immediate potential for pollutant and CO2 emissions reductions and operational cost savings for airlines. 

Policies continue to support electric vehicle deployment and are evolving to a more holistic policy portfolio

Electric vehicles are a key technology to reduce air pollution in densely populated areas and a promising option to contribute to energy diversification and greenhouse gas emissions reduction objectives. Electric vehicle benefits include zero tailpipe emissions, better efficiency than internal combustion engine vehicles and large potential for greenhouse gas emissions reductions when coupled with a low-carbon electricity sector. These objectives are major drivers behind countries’ policy support in the development and deployment of electric powertrains for transport. To date, 17 countries have announced 100% zero-emission vehicle targets or the phase-out of internal combustion engine vehicles through 2050. France, in December 2019, was the first country to put this intention into law, with a 2040 timeframe.

Policy actions for electric vehicles depend on the status of the electric vehicle market or technology. Setting vehicle and charger standards are prerequisites for wide electric vehicle adoption. In the early stages of deployment, public procurement schemes (e.g. for buses and municipal vehicles) have the double benefit of demonstrating the technology to the public and providing the opportunity for public authorities to lead by example. Importantly, they also allow the industry to produce and deliver bulk orders to foster economies of scale. Emerging economies can scale up their policy efforts for both new vehicles and second-hand imports.

Tax rates that reflect tailpipe CO2 emissions can be conducive to increased electric vehicle uptake. Fiscal incentives at the vehicle purchase, as well as complementary measures (e.g. road toll rebates and low-emission zones) are pivotal to attract consumers and businesses to choose the electric option. Local governments are key in proposing and implementing measures to enhance the value proposition of electric vehicles. The use of local low- and zero-emission zones can steer car purchase decisions far beyond just those zones and may influence the relative resale value of internal combustion engines and electric powertrains.

The vast majority of car markets offer some form of subsidy or tax reduction for the purchase of an individual or company electric car as well as support schemes for deploying charging infrastructure. Provisions in building codes to encourage charging facilities and the “EV-readiness” of buildings are becoming more common. So too are mandates to build charging infrastructure along road corridors and fuel stations.

There is common understanding that government support for electric vehicle purchases can only be transitional, as sale volumes increase. In the near term, a point will be reached when technology learning and economies of scale will have driven down the purchase cost of electric vehicles and mass-market adoption is triggered. For the first time a decrease in government spending for electric car purchase incentives was observed in 2019, while both consumer spending and total expenditure on electric cars continued to increase. At the national level, both China and the United States witnessed substantial purchase subsidies reductions or partial phase out in 2019, but there are cases where these reductions were met by increases in local government support. In China the central government was planning in 2019 to culminate a phase-out that dates to 2016, though, in the face of bleak electric car sales in the second half of 2019, the subsidy scheme was extended through 2022. Yet some other countries extended or implemented new purchase incentives schemes in 2019 or early 2020, for example, Germany and Italy.

Shifts to a variety of regulatory and fiscal measures are likely to gradually become a main driver of electric vehicle deployment, setting clear goals and a long-term vision for the industry. Many of the regulatory policies impel vehicle makers to sell a greater number or share of electric or otherwise more efficient vehicles. For example, today 60% of global car sales are covered by China’s New Energy Vehicle mandate, the European Union CO2 emissions standard (which is applicable to all EU member states) or a zero-emission vehicle mandate (in selected US states and Canadian provinces). The European Union approved a new fuel economy standard for cars and vans for 2021 30 and a CO2 emissions standard for heavy-duty vehicles (2020 30), with specific requirements or bonuses for electric vehicles. In the European Union, 2020 is the target year for compliance with the CO2 emissions standards for light- duty vehicles of 95 grammes of CO2 per kilometre, which has contributed to the successful uptake of electric light-duty vehicles in Europe in recent years. In 2019, China announced a tightening of its New Energy Vehicle mandate scheme with both setting new credit targets for 2021-23 and a more stringent calculation method for the credits beyond 2021. These actions are in step with its planned gradual transition from direct to more indirect forms of subsidies and incentives (including increasing support for charging infrastructure and other support services). In the United States, regulatory developments were different from other markets; the Safer Affordable Fuel-Efficient (SAFE) vehicles final rule, put in place in March 2020, replaced the 2012 rule, lowering the annual improvement in fuel economy standards from 4.7% in the 2012 rulemaking to 1.5% in SAFE for model years 2021 through 2026.

Range of credits per vehicleNEV credit targets
YearBEVPHEVFCEV
Until 20201-521-52019: 10%, 2020: 12%
From 20211-3.41.61-62021: 14%, 2022: 16%, 2023: 18%

Notes: For details, see table 2.3 in the report

Other countries with increasing policy activity to support electric vehicles are Canada, Chile, Costa Rica, India and New Zealand. For example, Chile seeks to establish energy efficiency standards for new vehicles sold by car manufacturers or importers, including multipliers for electric and hybrid vehicles in the calculation of the sales average car efficiency.

In addition to new regulations, in order to transition from internal combustion engines to electrified vehicles in the transport sector governments need a long-term vision and a diversified and adaptive portfolio of policy measures, including new fiscal schemes. For instance, governments will need to anticipate and adapt taxation approaches early to replace lost fuel tax revenues, such as taxation based on vehicle activity (e.g. distance- or congestion-based pricing). 

Many uncertainties characterise the Covid-19 crisis, from the capacity of governments and companies to double-down on transport electrification efforts to what behavioural changes could potentially be expected from the current crisis, including from low oil prices and confinement measures. As cities gradually emerge from lockdowns, some of them are placing temporary restrictions on the frequency and occupancy of public transport, raising the risk of a spike in car traffic. Many cities, particularly in Europe, are therefore rapidly putting together policies to rethink the use of urban space and to promote walking and cycling. As part of economic recovery efforts, a focus on promoting clean transport is being called for at national and local levels.

Auto manufacturing, a critical sector of economic activity in many of the world’s largest economies, employs millions of people across the entire supply chain. It has been severely affected during the Covid-19 crisis; practically all major car manufacturers halted production lines for some period. Governments need to carefully consider appropriate policy responses. It is reasonable to expect that stimulus packages will seek to bolster the economy in countries with important vehicle manufacturing capacity by including measures to support the automotive industry, not least given their relevance for the labour market. While such measures will inevitably help boost electric vehicle sales as well, targeted measures to support electric vehicle sales in particular will be required to ensure that the electrification of road transport remains on track towards the postulated goals. 

In China, policy makers were quick to identify the auto market as a primary target for economic stimulus. Among other measures, the central government encouraged cities to relax car permit quotas, at least temporarily, complemented by strengthening targeted New Energy Vehicle measures. In the European Union, at the time of writing, existing policies and regulations were being maintained and countries like France and Germany announced increased support measures towards electric vehicles for the remainder of 2020.

Experience of automotive industry stimulus measures has been mixed. Cash-for- clunkers programmes can be an effective approach if they are designed to support the uptake of more efficient (e.g. hybrid) and electric cars. In past stimulus packages, however, such considerations were not always adequately addressed and sales of sport utility vehicles and diesel cars were boosted, which pushed up global oil demand and air pollution. Support for the auto industry can also be tied to ambitious fuel economy regulations, which in the past triggered innovation and helped jump- start key parts of today’s electric car industry. Other targeted and direct support measures, such as for charging infrastructure, or via favourable loans with low interest rates and/or public co-funding, towards corporate fleets for bulk procurement of electric cars, buses and trucks, could support continued growth in electric vehicle sales. In countries where fossil fuel subsidies prevail, the low oil price environment is an important opportunity to phase out price supports, which are detrimental for pursuing energy efficiency efforts in general and for creating a context that supports road vehicle electrification in particular.

Prospects for electrification in transport in the coming decade

This report explores the outlook for electric mobility to 2030 through two IEA scenarios: the Stated Policies Scenario, which incorporates existing government policies, and the Sustainable Development Scenario, which is fully compatible with the climate goals of the Paris Agreement. The Sustainable Development Scenario incorporates the targets of the EV30@30 Campaign3 to collectively reach a 30% market share for electric vehicles in all modes except two-wheelers by 2030.

Electric vehicles play a critical role in meeting the environmental goals of the Sustainable Development Scenario to reduce local air pollution and to address climate change. In this scenario, the global electric vehicle stock (excluding two/three-wheelers) grows by 36% annually, reaching 245 million vehicles in 2030 – more than 30 times above today’s level. Other than two/three-wheelers, growth is strongest for the light-duty vehicle segment where electric powertrain technologies are most readily available. In the Stated Policies Scenario, under the assumptions taken, the global electric vehicle stock (excluding two/three-wheelers) reaches nearly 140 million vehicles and accounts for 7% of the global vehicle fleet. 

Global electric vehicle stock in the Sustainable Development Scenario, 2019 and 2030

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Global electric vehicle stock in the Stated Policies Scenario, 2019 and 2030

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With the projected size of the global electric vehicle market, expansion of battery manufacturing capacity will largely be driven by electrification in the car market. Indeed the electrification of cars is a crucial driver in cutting unit costs of automotive battery packs that can be used in a variety of road modes. By 2030, the light-duty vehicle fleet (cars and light commercial vehicles) represents the largest part of the fleet of electric four-wheelers, regardless the scenario. China and Europe lead this deployment, as policies promote electrification.

Electric two/three-wheelers will continue to represent the lion’s share of the total electric vehicle fleet, as this category is most suited to rapid transition to electric drive. The future electric two/three-wheeler fleet is concentrated in China, India and the ten countries of ASEAN. Electrification of buses is mostly in urban areas due to their shorter ranges and driving cycles suitable for electrification. Due to the characteristics of their operations, intercity buses are not projected to make significant inroads in the period to 2030, thus the overall stock shares of buses lag slightly behind those of light-duty vehicles in both scenarios. Similarly, electrification of medium- and heavy-duty trucks is mostly in urban environments. Trucks that operate on regional and long-haul basis show the lowest sales and stock shares among all vehicle categories in the scenarios. 


In 2030, in the Stated Policies Scenario, global electricity demand from electric vehicles (including two/three-wheelers) reaches 550 TWh, about a six-fold rise from 2019 levels. The share of demand due to electric vehicles in total electricity consumption at a national/regional level grows to as high as 4% in Europe. In the Sustainable Development Scenario, with demand rising nearly eleven-fold relative to 2019, to almost 1 000 TWh, the share of total demand ranges from 2% in Japan to 6% in Europe.

In both scenarios, electricity demand on slow chargers represent the majority of electric vehicle electricity demand (mainly due to a continuing dominance of private charging). Fast-charging infrastructure is gradually deployed to respond to the growth in relative shares of electric vehicles with higher battery capacity and power requirements, e.g. buses and trucks. 

Electricity demand from the electric vehicle fleet by charger type, 2030

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Electricity demand from the electric vehicle fleet by mode, 2019 and 2030

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Electricity demand from the electric vehicle fleet by oil displacement, 2019 and 2030

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Electricity demand from the electric vehicle fleet by country and region, 2030

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In 2019, electric vehicles in operation globally avoided the consumption of almost 0.6 million barrels of oil products per day. In 2030, in the Stated Policies Scenario, the electric vehicle fleet displaces around 2.5 mb/d of oil products. In the Sustainable Development Scenario, it displaces 4.2 mb/d of gasoline and diesel.

In 2019, the electricity generation to supply the global electric vehicle fleet emitted 51 Mt CO2-eq, about half the amount that would have been emitted from an equivalent fleet of internal combustion engine vehicles, corresponding to 53 Mt CO2- eq of avoided emissions.

To ensure that electric vehicles can unleash their full potential to mitigate climate change, it is crucial to reduce the CO2 intensity of power generation. Indeed, the well- to-wheel emissions of the future electric vehicle fleet are projected to be significantly lower than are those of internal combustion engines in 2030 in both scenarios. The net emission reductions are more significant in the Sustainable Development Scenario, in which higher electric vehicle deployment is coupled with more rapid decarbonisation of electricity generation, in line with the Paris Agreement goals. 

Net and avoided well-to-wheel GHG emissions from the global electric vehicle fleet, 2030

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Net and avoided well-to-wheel GHG emissions from the global electric vehicle fleet, 2019

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Batteries: An essential technology to electrify road transport

The ongoing trend of increasing battery capacity is projected to continue. By 2030, battery electric vehicles are assumed to reach an average driving range of 350-400 km corresponding to battery sizes of 70-80 kWh. In addition to battery size, another important variable in projecting total battery capacity is the proportion of battery electric vehicles and plug-in hybrid electric vehicles in overall electric vehicle sales.

In the Stated Policies Scenario, global electric vehicle battery capacity increases from around 170 GWh per year today to 1.5 TWh per year in 2030. In the Sustainable Development Scenario, demand of 3TWh is projected. Despite ambitious electrification in the Sustainable Development Scenario, modes other than cars account for only 11% of overall battery demand in 2030, highlighting the centrality of electric cars in the battery market over the next decade.

The demand for the materials used in electric vehicle batteries will depend on changing battery chemistries, nickel cobalt aluminium oxide (NCA), nickel manganese cobalt oxide (NMC) and lithium iron phosphate (LFP) cathodes for lithium-ion (Li-ion) batteries being the most widely used today.

The estimated material demand for the batteries of the electric vehicles sold in 2019 was about 19 kt for cobalt, 17 kt for lithium, 22 kt for manganese and 65 kt for nickel. For battery needs in the Stated Policies Scenario, cobalt demand expands to about 180 kt/year in 2030, lithium to around 185 kt/year, manganese to 177 kt/year and class I nickel to 925 kt/year. In the Sustainable Development Scenario, higher electric vehicle uptake leads to 2030 material demand values more than twice as high as the Stated Policies Scenario. 

Annual lithium demand for electric vehicle batteries, 2019-2030

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Annual cobalt demand for electric vehicle batteries, 2019-2030

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The cost of batteries for electric vehicles is falling markedly. Industry reports show that sales-weighted battery pack prices in 2019 were an average of USD 156 per kilowatt-hour, down from more than USD 1 100/kWh in 2010. The average battery pack size across electric light-duty vehicles sold (including battery electric vehicles and plug-in hybrid electric vehicles) continues an upwards trend; it is now 44 kWh, up from 37 kWh in 2018, and battery electric cars in most countries are in the 50-70 kWh range. This increase is driven by two trends: battery electric vehicle models with longer ranges are becoming available and are increasingly in demand, and the share of battery electric vehicles relative to plug-in hybrid electric vehicles is rising.

The most common cathode chemistry used in electric vehicle Li-ion batteries is NMC. The energy density of cells with NMC cathodes increases with increasing nickel content. On these grounds, there are reasons to believe that density is also continuing on an upward trend. While Li-ion technology has made tremendous progress over the past decade in terms of energy density, costs and cycle life, room for improvement remains. Research is being conducted to improve all three key components of Li-ion battery cells: cathodes, anodes and electrolytes. In addition, recent developments in battery design and thermal management aim primarily to cut the costs of the pack and module components. 

The next generation of Li-ion battery technology, set to enter the market in the coming five to ten years, is likely to have low nickel content and use either NCA (with less than 10% nickel) or NMC 811 cathodes. Near-term developments should enable cell-level energy densities of up to 325 Wh/kg and pack-level energy densities could reach 275 Wh/kg. These values approach the upper performance bounds of Li-ion technology.

However, some electric vehicles might not necessarily be designed for the highest possible energy density. This might be the case for urban buses or delivery vehicles where volumetric constraints are less stringent, or for low-end electric vehicles where affordability is more important than long driving ranges. For these applications, the LFP cathode could be well suited.

For the next decade, the Li-ion battery is likely to dominate the electric vehicle market. For the period after 2030, a number of potential technologies might be able to push the boundaries beyond the performance limits imposed by Li-ion battery technology. These include the lithium-metal solid state battery, lithium-sulphur, sodium-ion or even lithium-air, which could represent an improvement from Li-ion on indicators such as cost, density, cycle life, and benefits from more widely available materials than Li-ion technologies. However, not a single technology reaps all these benefits at the same time. In addition, even once performance is proven in the lab, deployment and scale-up of these new technologies will take time and compete with the well-established Li-ion technology, which by now benefits from considerable experience in its large-scale manufacture and solid understanding of its long-term durability characteristics, and of substantial investments already made. 

Considering the life-cycle greenhouse gas emissions of available powertrains, analysis suggests that:

  • Today the use phase is the largest contributor to life-cycle greenhouse gas emissions of all powertrains.
  • With a greenhouse gas intensity of electricity generation equal to the current global average, battery electric vehicles, hybrid electric vehicles and fuel cell electric vehicles have similar lifetime greenhouse emissions, and lower than those of an average internal combustion engine vehicle.
  • Increasing the range of a battery electric vehicle reduces its relative benefits compared to internal combustion engine vehicles or fuel cell electric vehicles.
  • As the electricity supply decarbonises and serves both battery manufacturing facilities and charging, the benefits of lower life-cycle greenhouse gas emissions of electric cars amplify relative to other powertrains. 

In the global average example in the figure, in a current battery electric vehicle with a large battery (80 kWh) manufactured in China (representative of high greenhouse gas intensity of battery manufacturing), the battery can be responsible for up to a third of the vehicle’s life-cycle emissions. The main areas of action to reduce battery manufacturing emissions and life-cycle impacts are:

  • Increase the energy density of batteries.
  • Scale up manufacturing facilities and increase throughput.
  • Increase energy efficiency and use low-carbon energy sources in mining and refining processes for raw materials, especially for aluminium, and in synthesis of active materials such as nickel, cobalt and graphite.
  • Increase energy efficiency and use low-carbon energy sources in cell manufacturing and pack assembly.
  • Ensure appropriate end-of-life battery management. 

Based on the two scenarios, it is estimated that 100-120 GWh of electric vehicle batteries will be retired by 2030, a volume roughly equivalent to current annual battery production. Without effective measures to address such volumes, this can become a significant environmental liability. Spent batteries can be channelled to second-use or recycling with the aid of policies that help to steer these markets towards sustainable end-of-life practices. 

Automotive battery capacity available for repurposing or recycling in the Sustainable Development Scenario, 2019-203

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Automotive battery capacity available for repurposing or recycling in the Stated Policies Scenario, 2019-2030

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Battery reuse in second-life, stationary storage applications for services to electricity network operators, electric utilities, and commercial or residential customers can extend the lifetime of batteries that are no longer suited for automotive applications. Extending the useful life of automotive batteries can contribute to displacing the environmental impacts, emissions and costs of manufacturing new batteries for the provision of the same services. However, there is little experience to date from this nascent market. Challenges in implementing second-life applications for automotive batteries reside primarily in competition with the decreasing cost of new battery manufacturing and a potentially long and technical refurbishing process that requires efficient technical information transfer between the stakeholders along the value chain. An industry is starting to emerge, made up of stakeholders from original equipment manufacturers, utilities and specialised start-ups.

As volumes of spent electric vehicle batteries increase, the development of an effective recycling industry will be key to the sustainability of Li-ion batteries. By recovering critical materials, a robust recycling system would reduce demand for raw materials, greenhouse gas emissions and negative local impacts from mining and refining. Furthermore, domestic recycling enables countries to reduce their reliance on imports of critical materials. So far, economic viability and market incentives for recycling have been limited because of generally low raw material prices and small volumes of spent electric vehicle batteries to date. However, as the growing market for electric vehicles puts further pressure on primary resources, raw material prices could increase and/or prices may become more volatile. Thus, materials recovered through recycling would become more competitive. The economic and strategic value of essential inputs, such as lithium and cobalt, may incentivise recycling in the long term and steer recycling policies.

It is estimated that current recycling facilities using mainstream recycling technologies such as pyrometallurgy and hydrometallurgy, may add a limited greenhouse gas footprint to an electric vehicle battery (about 10%), compared to a battery manufactured from primary raw materials. Research points towards a net benefit when considering non-greenhouse gas indicators such as ecotoxicity. The scale-up of Li-ion battery recycling facilities, driven by electric vehicle deployment, as well other energy efficiency measures and renewable energy input into recycling processes will be necessary to significantly reduce greenhouse gas emissions from battery recycling. New, innovative recycling processes using less energy, and adequate sorting and separation of battery pieces that need recycling or that can directly be repurposed or repackaged into new batteries are also under research. 

Recent policy developments highlight an increased focus on the projected large- scale deployment of batteries for automotive applications and their life-cycle impacts. Battery collection and recycling policies have usually focused on other industries and battery technologies than the Li-ion batteries used in electric vehicles, such as consumer electronics or lead-acid batteries. Hence, they are not designed for electric vehicle battery end-of-life. In 2019, China mandated producer responsibility, holding them responsible for the recycling, as well as the reverse logistics involved in taking back the Li-ion batteries. The European Union is currently reviewing its Battery Directive to adapt to transport electrification through identifying improvements and assessing the relevance, effectiveness, efficiency, coherence, and added value of the policy; it has set up a Battery Alliance to discuss further measures with key stakeholders. In the United States, the California Assembly Bill 2832 requires the formation of a Lithium-Ion Car Battery Recycling Advisory Group to advise the legislature on electric vehicle Li-ion battery recycling policy. These developments, along with private sector innovation, are expected to push forward battery end-of-life solutions.

Integrating electric vehicles with power systems can benefit both

Balancing electricity demand and supply will become an increasing challenge to ensure the smooth integration of variable renewables-based energy generation and the electrification of multiple end-use sectors. The uptake of electric vehicles in the Sustainable Development Scenario, in which electric vehicles account for around 4% of global annual electricity demand by 2030 (up from 0.3% today), brings implications and opportunities for power systems.

Over the coming decade, managing electric vehicle charging patterns will be key to encourage charging at periods of low electricity demand or high renewables-based electricity generation. With 250 million electric vehicles on the road by 2030 in the Sustainable Development Scenario, the share of electric vehicle charging in the average evening peak demand could rise to as high as 4-10% in the main electric vehicle markets (China, European Union and United States), assuming unmanaged charging. A range of ready options with various degrees of complexity can be tapped to reduce electric vehicle charging at peak system demand, thereby diluting the need for upgrades to generation, transmission and distribution assets. While off-peak charging at night through simple end-user programming and/or nighttime tariffs would more than halve the contribution of electric vehicles to peak demand, controlled charging in response to real-time price signals from utilities (V1G) could further exploit synergies with variable renewable electricity generation and expand the range of services electric vehicles offer to the grid. 

Contribution of electric vehicles to hourly peak demand by country and region in the evening and night charging cases in the Sustainable Development Scenario, 2030

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Not only are there means to alleviate the potentially negative impact of electric vehicle charging on power systems, but the 16 000 GWh of energy that can be stored in electric vehicle batteries globally in the Sustainable Development Scenario in 2030 could actively provide energy to the grid at suitable times via vehicle-to-grid solutions (V2G). The V2G potential depends on availability of vehicles or vehicle fleets to participate in such services at suitable times, consumer acceptance, and the ability for participants to generate revenues, as well as other technical constraints related to battery discharge rates or impacts on battery lifetime. All being accounted for, an estimated 5% of the total electric vehicle battery capacity could be made available for vehicle-to-grid applications during peak times. This could provide about 600 GW of flexible capacity globally by 2030 across China, the United States, the European Union and India, contributing to offset lower renewable electricity generation during peaks as well as the increase of capacity needs to meet peak demand. 

Vehicle-to-grid potential and variable renewable capacity relative to total capacity generation requirements in the Sustainable Development Scenario, 2030

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As a result, simple solutions can be implemented via relatively straightforward forms of policy support to largely alleviate peak time charging, such as the promotion of workplace charging or the use of off-peak tariffs. However, unlocking the full flexibility potential of electric vehicles through dynamic controlled charging (V1G) and vehicle-to-grid services (V2G) to reap synergies with variable renewable generation and reduce electricity generation capacity needs would require the adaptation of regulatory and market frameworks. Currently, flexible electric vehicle integration is not on track for power systems to accommodate the distributed loads that electric vehicle batteries represent in a co-ordinated way and on a large scale. Specific stakeholders such as aggregators, along with business models that make use of new regulatory frameworks to reward electric vehicle owners for providing flexibility services are also needed for electric vehicle batteries to contribute to the power system stability on a significant scale. 

References
  1. In this report, “electric car” or “passenger electric car” refers to either a battery electric vehicle or a plug-in hybrid electric vehicle in the passenger light-duty vehicle segment. It does not include hybrid electric vehicles that cannot be plugged-in. 

  2. Market share is defined in this report as the share of new EV registrations as a percentage of total new vehicle registrations, whereas stock share refers to the share of electric vehicle stock as a percentage of total passenger vehicle stock. 

  3. The EV30@30 Campaign was launched at the Eighth Clean Energy Ministerial in 2017. The participating countries are Canada, China, Finland, France, India, Japan, Mexico, Netherlands, Norway, Sweden and United Kingdom.