Without a doubt, electric vehicles are better for the environment because they don’t produce tailpipe emissions of greenhouse gasses. And it is hoped that the transition to EVs in all aspects of our lives will further drive down the need for fossil fuels.
However, not all of the supposed positive effects of EVs will be economically or environmentally beneficial, according to a recent report by McKinsey & Co.
McKinsey is optimistic about the rise of electric vehicles, forecasting that by 2030, plug-in cars will make up at least 20 percent of car sales globally, and up to 35 percent in Europe. But the report, which came out this summer, also raises some concerns over the economic and environmental consequences for energy, raw materials, and land use.
Looking closer at ores and metals
It only makes sense that as EV sales rise, there will end up being greater price pressure for the materials that make up the vehicle. Basically, we can break the constituent parts of an EV into the battery, which amounts to about 40 to 50 percent of the cost, the powertrain, accounting for 20 percent of the cost and all the other miscellaneous parts, making up 30 to 40 percent of the vehicle cost.
McKinsey says that to meet the forecast increase of EVs worldwide, battery production will need to triple by 2020. And this forecast is going to put an added burden on lithium and cobalt demands.
According to Green Car Reports, cobalt prices have tripled since 2015, and lithium prices are right behind cobalt. And even though battery manufacturers are working to reduce the amount of cobalt in batteries, they still have a ways to go, while mining companies are working to open new lithium mines.
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In an International Energy Agency (IEA) report released in May, the IEA noted that EV sales around the world rose by 54 percent in 2017, taking global stock across the three-million threshold. But even with the glowing outlook for EVs, the report also raised concerns over one of the key components in the batteries — cobalt.
And feasting on a global demand for cobalt and copper, the mining industry in the Democratic Republic of Congo is flourishing — but two clouds are spoiling its sunlit future.
One is the lack of a sufficient power infrastructure. This is hampering the country’s ability to develop the mineral processing sector while crimping the country’s ability to reap higher profits. The other problem is a new fiscal law that raises taxes. And of course, there is still a concern at the international level of some DRC mines allegedly using child labor.
Fossil fuels and EVs
One of the benefits touted by EV enthusiasts is the fact they don’t use gasoline. And yes, this is true. However, this does not mean other industries, including power companies, don’t use fossil fuels. McKinsey points this out, noting that EVs will “reduce oil demand only modestly over the next 10 to 15 years.”
More efficient internal-combustion engines will also help to keep fossil fuels on the market as more ICE-proficient automobiles come out. But while fossil fuels, in general, are one thing to think about, it is the natural gas industry that will actually grow.
“More EVs means that more electricity will have to be produced. While coal will be part of the equation, approximately 80 percent of the forecast growth in U.S. electricity demand is expected to be met with natural gas,” says McKinsey. Actually, daily U.S. natural-gas demand could be expected to increase by over 20 percent.
Land, and more land
In the United States, almost 90 percent of EV owners recharge their vehicles at home where they can access a charger. But in other parts of the world, like Europe and China, the report says that up to 45 percent of EV owners rely on public chargers. And in China, the report says that 40 percent of EV owners will not have access to private parking spaces where they can charge.
There are currently more than 400,000 public charging points that support the more than three million EVs now in use globally. However, even converting gas stations to EV charging stations or adding more charging points that are the size of gas stations still won’t be sufficient to keep up with the number of EVs on the road, says the report.
It will take multiple rapid 120-kilowatt charging stations with eight outlets to dispense a similar amount of range per hour as the standard-size gas station of today. Then, charging the EVs during “off-peak” hours will be needed. And faster charging during peak demand will have an impact on the power grid.
So, it is necessary that EV charging infrastructure needs to be taken into consideration as we move toward the future. And if you think about natural gas used to supply electrical generation, increased numbers of EVs on the road and the need for more ores and minerals, we do have some rather important economic and environmental impacts to think about.
