With 6.6 million units sold worldwide in 2021, half of which in Chinethe sales of electric cars doubled in one year and now represent 10% of new car sales. They continued to accelerate at the start of 2022 with two million units sold in the first quarter (+75% over one year).
These sales have been strongly driven by public subsidies, which have doubled in 2021 to reach nearly 30 billion euros globally. Manufacturers, for their part, have multiplied by five the number of vehicles available between 2015 and 2021: around 450 electric models are now on sale.
Growing lithium needs
However, tensions over raw materials are likely to slow down this growth. “Governments, industrialists and investors must remain vigilant and creative to avoid problems with the supply of essential minerals,” IEA Executive Director Fatih Birol said in a statement.
These minerals are mined mainly in countries like Australia, Chile or the Democratic Republic of Congo. But China produces three quarters of the lithium ion batteries, the dominant technology, and controls more than half of the processing and refining capacity for lithium, cobalt and graphite. Lithium needs are particularly critical, according to the IEA: they should be multiplied by six by 2030, to 500 kilotons, requiring the opening of 50 new mines.
Increase taxes on thermal vehicles, lower subsidies for the purchase of electric vehicles
Europe produces a quarter of electric cars, but controls very few raw materials, just like the United States. “The European and American governments have made strong commitments to develop battery production capacities, but the majority of the supply chain should remain Chinese until 2030”, underlines the IEA.
Alternative battery technologies, recycling, but also incentives to buy smaller cars might help save these minerals. In the short term, sales might also be hampered by the rise in the price of raw materials used in batteries, as well as logistical problems linked to the war in Ukraine and the confinements linked to Covid-19 in China.
The IEA recommends increasing taxes on thermal vehicles while gradually reducing subsidies for the purchase of electric vehicles. The agency also recommends extending these programs to trucks and buses but also to developing countries, and supporting them by developing charging networks.
