How the electric car market development will affect the lead demand?

According to the CHR Metals limited forecast, 20% of all sold new cars by 2025 will be electric vehicles. The demand is stimulated with government subsidies, environmental regulations, electric vehicles price and charging time reduction. Electrical motorcycles and tricycles are on demand.

China, Japan, Korea and other Asian countries are going to increase the number of electric vehicles. Electric vehicles volumes of sales in Japan and in Korea are almost on the same level.  According to the CHR Metals forecasts, the electric transport will share around 20% of new car  sales on the Chinese car market by 2025, and 30% by 2030. Such sales figures in China and other Asian countries are because of various demand-increasing stimulations.

In order to increase sales performance in Asian countries, the public car-charging infrastructure is being created and developed rapidly, the production of new electro-car models is being arranged, the industry development is being subsidized by government. The average sum of state subsidies was around 10000$ USD in Asian countries in 2017. There are also another measures, such as ICE car sales limitation.  

Many other countries also have plans for electric cars development. For example, the Indian government is going to reach the share of 30% of total car number for electric vehicles by 2030. But Indian carmakers are skeptical about this kind of government statements. They explain this by the fact that the prices for electric cars are too high, the government can’t provide subsidies and also the country generates electricity mainly from coal. 

There are five main driving factors towards the development of the electric vehicles market:

  • 1) Consumer behavior: Priorities change to the direction of electric vehicles purchase is stimulated by the growth of state support.

2) Political and environment regulations: Many countries have adopted programs aimed to CO2 emissions reduce. There is a number of apanages for electric car owners such as free toll roads and ferries usage, a network of free gas stations and free parking areas with chargers.

3) Technological development: The battery technologies development keeps the electric vehicle travel distance increasing and the charging time reducing. In addition, the price of electric transport is decreasing.

4) Car market in China: It is the largest car market in the world, in 2017 more than 25 million cars were sold in China. Around 800,000 of them were the electric ones. In 2018, sales of electric vehicles in China exceeded 1 million.

5) Infrastructure and investment: Charging infrastructure is in development progress, so the electric vehicles owners could not only move in the city freely, but also use the highways and freeways, with no fear of stopping down in the middle of the road. For example, the number of charging stations exceeded the number of gas stations in Japan. China is ranked first in the development of electrically-powered personal mobility. The electrical motorcycles and tricycles are in demand in this country. It is worth noting that all of them are equipped with lead-acid batteries. CHR Metals estimates that 40% global increase in demand for lead from 2005 was because of the electrical motorcycles and tricycles, which are popular in China. 3-4 million tons of lead is used for battery of such vehicles production. 

Taking into account the electric vehicle market development, the demand for lead depends on three main factors:

  • Growth of electric vehicles sales, which depends on the rate of economic growth, demand stimulating policies, electric vehicles price reduction and chargers accessibility .

2) Lead-acid batteries usage in new models of electric vehicles for charging auxiliary equipment.

3) Continuing growth of new electric vehicles shares .

How the electric car market development will affect the lead demand? - 1

Electric vehicles sales increase in China and other Asian countries will reduce demand for lead, but this reduce will be slight at least till 2030. A big number of ICE cars in the world’s car fleet will increase the demand for lead-acid batteries replacement. In addition, all electric vehicles have a lead-acid batteries for in vehicle network support nowadays. Thus, the electric vehicles development stimulate the growth of lithium-ion batteries usage, but the growth factor for lead-acid batteries is also there:

1) Electric rickshaws development in India which have lead acid base and are profitable for the country.

2) Demand increase for electric motorcycles and tricycles in other Asian countries (China, Japan, Korea, India, etc.).

3) The popularity growth of electric vehicles keeps the demand for lead, because all electric vehicles have a lead-acid battery.

How the electric car market development will affect the lead demand? - 2

Source:  From materials of 16th European Lead Battery Conference.

Authors:

Lemeshevsky V.M., General Director of 1AK-GROUP Holding

Vertai S.P., PhD of Economic Sciences, Associate Professor, Deputy General Director for Marketing of 1AK-GROUP Holding