London — Electric vehicles will reach cost parity with internal combustion engine cars by 2022-2023, even before accounting for running cost savings, according to US investment management and broking group Bernstein.
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Running cost savings of $650/year in Europe and up to $950/year in the US on fuel and maintenance would only accelerate EV adoption despite some near-term hurdles this year, Bernstein said in the report, Electric Revolution 2019, published Monday.
"By 2029 we believe pure EVs will be cheaper than ICEs for the entire global market, and thus game-over for ICEs," it said.
Bernstein forecasts that by 2025 global large battery demand would hit 640 GWh under a slow growth scenario, 740 GWh under a government target scenario and over 900 GWh under a rapid adoption scenario.
For 2018 it judged total demand to have reached 117 GWh, rising to 188-210 GWh in 2020.
The 66% year on year growth in global EV sales last year had outstripped the broker's most bullish rapid-adoption scenario, it said.
"As a result, we bump up our projections while keeping long-term scenarios unchanged," it said. "Beyond electric cars, we see new demand drivers for batteries and potential disruption in trucks, bikes, planes, drones and energy storage systems. Together 'beyond e-cars' represents 269 GWh or 32% of demand by 2025," it said.
Energy density, performance and reliability gains, manufacturing scale, the scale and price competition in the upstream supply chain and raw material price fluctuations "now play a larger role in further cost improvements" than battery technology itself, the report said.
Beyond lithium-ion technology, solid state lithium metal batteries are showing significant progress, with Bernstein forecasting niche market opportunities for them before reaching mainstream vehicle cost levels post-2025.
"We believe charging infrastructure will not be a barrier to EV adoption and the commercial case for investing improves with higher EV adoption," the broker said.
Utilities with exposure to the renewables and e-mobility infrastructure theme included Orsted, RWE, Iberdrola, E.ON, Enel, SSE and National Grid, it said.
Tier one battery manufacturers and component providers with favorable exposure to the EV story included Samsung SDI, CATL, JMAT and UMI, while raw material suppliers exposed to nickel, cobalt and copper including Glencore, First Quantum, Antofagasta and Ivanhoe, it added.
For 2019, EV subsidy reductions in China should be balanced by a new EV credit system, with sales expected to grow again, while in Europe new test regulations on plug-in hybrid electric vehicles would represent a temporary drag on first-half sales, Bernstein said.
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-- Edited by Alisdair Bowles, firstname.lastname@example.org
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