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IEA The Global EV Outlook 2018 Focus on batteries and battery charging Jacopo Tattini Seminario ITAM y GIZ – ITAM, Ciudad de Mexico

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Page 1: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

IEA

The Global EV Outlook 2018Focus on batteries and battery charging

Jacopo Tattini

Seminario ITAM y GIZ – ITAM, Ciudad de Mexico

Page 2: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Electric Vehicles Initiative (EVI)

Multi-government policy forum dedicated to conducting collaborative activitiesthat support the design and implementation of domestic electric vehicle (EV)deployment policies and programs

In 2010, EVI was one of several initiatives launched under the CEM

Currently co-chaired by Canada and China, and coordinated by the IEA

Released several analytical publications, demonstrating leadership to strengthenthe understanding of the opportunities offered by electric mobility to meet multiple policy goals

Instrumental to mobilize action and commitments (Paris Declaration on Electro-Mobility and Climate Change at COP21, Government Fleet Declaration at COP22)

Launched the EV30@30 Campaign in June 2017, updated in September 2018

Launched the Pilot City Programme in May 2018

Also working with the Global Environment Facility on the preparation of a project for the support ofEV policy-making in developing regions

Members

in 2018

Page 3: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

EV30@30 Campaign

Designed to accelerate the global deployment of electric vehicles

Sets a collective aspirational goal to reach 30% sales share for EVs by 2030

Launched at the 8th CEM meeting, in Beijing, by Minister Wan Gang

Enlarged participation announced at the UK ZEV Summit in September 2018

Implementing actions include:

• Supporting the deployment of chargers and tracking its progress,

• Galvanising public and private sector commitments for electric vehicle (EV) uptake in company and supplier fleets

• Scaling up policy research and information exchanges

• Supporting governments for policy and technical assistance through training

• Establishing the Global EV Pilot City Programme, aiming to achieve 100 EV-Friendly Cities over five years. The PCP counts over 30 cities by September 2018.

Supported by several partners, including the private sector since 2018

Members

+ UK in 2018

Page 4: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Global EV Outlook 2018

• EVI flagship report by the IEA

• 2018 edition includes• Data reporting (EV stock, sales, EVSE, battery costs)

• Overview of existing policies

• Battery technology and cost assessment

• Implications on the TCO of road vehicles

• Role of EVs in low carbon scenarios (2030 timeframe)

• Electricity demand, oil displacement and GHG emission mitigation

• Material demand

• Policy recommendations

• 2018 edition also paired with the Nordic EV Outlook 2018• Focus on one of the most dynamic global regions for EV uptake

• Opportunity to learn on policy efficacy and consumer behaviour

Page 5: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

The number of electric cars on the road continues to grow

The electric car stock exceeded 3 million in 2017

However, electric cars still only represent 0.3% of the global car fleet

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Page 6: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

The role of consumer electronics for Li-ion battery improvements

Consumer electronics led to cost declines (through technology progress and scale) for Li-ion in the past

This benefited both EV packs, now set to deliver the next scale up, and stationary storage

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20162017

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20102013

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Page 7: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Li-ion improvements: battery chemistry

Battery chemistries influence costs per kWh through changes in energy density and materials

Reducing the content of cobalt in battery chemistries also results in lower unit costs, all else being equal

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Cathode chemistry

Other materials

Battery jacket

Module hardware

Electrolyte

Separators

Negative active material

Positive active material

Other cost components

Page 8: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Industry is mobilizing investment in large scale manufacturing

Current battery factory capacity ranges between 0.5-8 GWh/year

Much larger plants (7.5-35 GWh/year), aiming to reap economies of scale benefits, already announced

Country Manufacturer Production

capacity

(GWh/year)

Year of commissioning

Source

Operational

China BYD 8 2016 TL Ogan (2016)

US LG Chem 2.6 2013 BNEF (2018)

Japan Panasonic 3.5 2017 BNEF (2018)

China CATL 7 2016 BNEF (2018)

Announced

Germany TerraE 34 2028 TerraE (2017)

US Tesla 35 2018 Tesla (2018b)

India Reliance 25 2022 Factor Daily (2017)

China CATL 24 2020 Reuters (2017f)

Sweden Northvolt 32 2023 Northvolt (2017)

Hungary SK innovation 7.5 2020 SK innovation (2018)

Page 9: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Li-ion improvements: effects of size & production volumes on costs

Battery size and manufacturing capacities have sizable impacts on the cost of batteries per kWh

Over time, both these factors will help delivering significant cost reductions

Note: graphics developed for BEV batteries for cars

Page 10: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Li-ion expected as the technology of choice for the next decade

Li-ion will continue to improve, thanks to several enhancements possible in battery performance

Other technology options will be ready after 2025, and scaled up in the following years

Cathode

2020 2025 20302017

NMC111N0.8C0.15A0.05

Graphite

Li Metal,HVS

NMC811NMC622

N0.9C0.05A0.05

CurrentBeyond

Lithium-ionAdvanced

Lithium-ionBeing deployed

Anode

Electrolyte

Next generation Lithium-ion

Li-Air

Li-SulphurGraphite/Silicon composite

Graphite + 5-10% Silicon

Carbon alloys

Polymer5V electrolyte

saltsGel Polymer

Organic solvent + LiPF6 salts

Page 11: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

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Other materials

Battery jacket

Module hardware

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Separators

Negative active material

Positive active material

Other cost components

Lithium-ion batteries: further cost reductions at reach…

The combined effect of manufacturing scale up, improved chemistry and increased battery size

explain how battery cost can decline significantly in the next 10 to 15 years

Plant scale

Chemistry

Battery size

0.5-8 GWh/year 35 GWh/year

20-75 kWh 70-80 kWh

NMC 111 NMC 811

Page 12: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

EVs lead to higher electricity demand…

Around 91% of the power for electric vehicles in 2017 was consumed in China

The share of electricity demand from EVs was 0.8% in China and 0.5% in Norway

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Electricity demand due to EVs: 54 TWh (more than the electricity demand of Greece)

Page 13: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Are electric cars impacting the power grid?

Home chargers can add significant loads to the household power demand. Unless properly managed (e.g. delayed charging), electricity demand due to electric car charging could exceed the maximum power in the distribution

grid.

Peak electricity demand in independent Norwegian houses with home charging

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Typical BEV onboard charger

Typical PHEV onboard charger

Typical household peak powerdemand

Power connection typical large home

Power connection typical small home

Page 14: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Ensuring that EVs are effectively integrated in the electricity grid

• Power generation: variable renewable capacity additions are breaking records

• Local power distribution: need to minimize the risk of local grid disruptions and the need for costly grid upgrades

→ Flexible charging is key

• To accommodate efficiently variable renewable generation (e.g. daytime workplace charging when PV generates most)

• To release pressure on the grid at high power demand peak hours

• To avoid grid disruptions locally, provide frequency and load balancing services

→ How?

• Default vehicle software allowing flexibility

• Time-of-use pricing

• Smart-meters

• Regulatory environment favourable to aggregators

• Who pays for local grid upgrades? Utility? EV owner x? All EV owners? Everyone?

Page 15: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

www.iea.orgIEA

Page 16: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Global EV deployment under the NPS and the EV30@30 scenario

The EV30@30 Scenario sees almost 230 million EVs (excluding two- and three-wheelers), mostly LDVs,

on the road by 2030. This is about 100 million more than in the New Policies Scenario

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PLDVs - BEV PLDVs - PHEV LCVs - BEV LCVs - PHEV Buses - BEV Buses - PHEV Trucks - BEV Trucks - PHEV

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Page 17: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Battery capacity

Demand for battery capacity for electric vehicles, primarily PLDVs, is projected to increase to 0.78 TWh

per year in the New Policies Scenario and 2.2 TWh per year in the EV30@30 Scenario and to 2030

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Material demand

Lithium and cobalt demand from electro mobility in 2030 will be much higher than current demand

Developments in battery chemistry can greatly affect future demand

Cobalt Lithium

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Page 19: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Managing changes in material demand from EV batteries

• Challenges (material procurement):o Fluctuating prices, stockpilingo Uncertainty for EV developments and battery technologieso Concentrated extraction (DRC for cobalt)

• Solutions:o Long-term contractso Need clarity and certainty over future market key area with national/local governments

influence (ZEV mandates, targets, bans)

• Challenges (social and environmental sustainability):o Environmental impact of miningo Black market/child labouro Extremely untransparent supply chains

• Solutions: o Multi-stakeholder actions and signals (governments, civil society, NGOs, industry)o Sustainability standards to be developed, labelling

Page 20: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Electric car sales are on the rise in all major car markets

China is the largest electric car market globally, followed by Europe and the US

Norway is the global leader in terms of market share, with 40% in 2017

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Page 21: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Charger deployment accompanies EV uptake

EV owners charge mostly at home or at work: private chargers far exceed publicly accessible ones

Publicly accessible chargers important to ensure EV market expansion, fast chargers essential for buses

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Page 22: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

…but they enable reductions in oil use, GHG & pollutant emissions

• EVs consume (in final energy terms) half to one third of the energy used by ICE powertrains

o This is due both to the higher efficiency of the powertrain and the EVs’ ability to regenerate kinetic energy when braking

• EVs displaced 0.4 mb/d of diesel and gasoline demand in 2017

o The majority of the displacement is attributed to two- and three-wheelers (73%), the rest to buses (15%) and LDVs (12%)

• EVs also allowed to reduce global well-to-wheel CO2 emission savings of 29.4 Mt CO2 in 2017, and abated pollutant emission savings in high exposure areas (urban environments), thanks to zero tailpipe emissions

Page 23: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

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Implications for the cost competitiveness of EVs

BEVs are most competitive in markets with high fuel taxes and at high mileageAt a USD 120/kWh battery price and with EU gasoline prices, BEV are competitive even at low mileage

LDVs - BEV

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The economic case for electric two-wheelers is strong: in countries with high fuel taxes electric two-wheelers are already cost competitive with gasoline models

High incomeDiesel price of USD 1.4 /L, electricity price of USD 0.13 /kWh Diesel price of USD 0.9 /L, electricity price of USD 0.13 /kWh

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Electric buses travelling 40 000-50 000 km/year are cost competitive in regions with high diesel taxation regimes if battery prices are below USD 260/kWh

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Small car - Gasoline price: USD 1.5 /L

- 20

- 15

- 10

- 5

0

5

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Annual mileage (thousand km)

Large car - Gasoline price: USD 1.5 /L

- 20

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5

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Co

st d

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tho

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Annual mileage (thouand km)

Small car - Gasoline price: USD 0.8 /L

400 USD/kWh: Large battery 260 USD/kWh: Large battery 120 USD/kWh: Large battery

400 USD/kWh: Current battery 260 USD/kWh: Current battery 120 USD/kWh: Current battery

- 20

- 15

- 10

- 5

0

5

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10 20 30 40 50

Annual mileage (thousand km)

Large car - Gasoline price: USD 0.8 /L

Battery price:

- 20

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0

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10 20 30 40 50

Co

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Annual mileage (thousand km)

Small car - Gasoline price: USD 1.5 /L

- 20

- 15

- 10

- 5

0

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Annual mileage (thousand km)

Large car - Gasoline price: USD 1.5 /L

- 20

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10 20 30 40 50

Co

st d

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ren

ce (

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nd

USD

)

Annual mileage (thouand km)

Small car - Gasoline price: USD 0.8 /L

400 USD/kWh: Large battery 260 USD/kWh: Large battery 120 USD/kWh: Large battery

400 USD/kWh: Current battery 260 USD/kWh: Current battery 120 USD/kWh: Current battery

- 20

- 15

- 10

- 5

0

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Annual mileage (thousand km)

Large car - Gasoline price: USD 0.8 /L

Battery price:

Page 24: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Benchmarking scenario results against OEM targets for PLDVs

Estimates based on manufacturers’ projections suggest an uptake of electric LDVs

ranging in-between the New Policies and the EV30@30 scenarios by 2025

0

50

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2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Mill

ion

ele

ctri

c LD

Vs

OEMs announcements (estimate) New Policies Scenario EV30@30

Page 25: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

EV uptake is still largely driven by the policy environment

• All 10 leading countries in electric vehicle adoption have a range of policies in place to promote the uptake of electric cars

• Policies have been instrumental to make electric vehicles more appealing to customers, reduce risks for investors and encourage manufacturers to scale up production

• Key instruments deployed by local and national governments for supporting EV deployment:

o public procurement

o financial incentives facilitating the acquisition of EVs and reducing their usage cost (e.g. by offering free parking)

o financial incentives and direct investment for the deployment of chargers

o regulatory instruments, such as fuel economy standards and restrictions on the circulation of vehicles based on their tailpipe emissions performance

Page 26: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Regional insights on the GEVO 2018 scenarios

China and Europe are the global regions with the fastest development of EVs

in both scenarios and in virtually all modes

EV market share by mode in a selection of regions, NPS and EV30@30 scenario, 2030

0%

20%

40%

60%

80%

100%

Ma

rket

sh

are

(%)

China

BEV PHEV

0%

20%

40%

60%

80%

100%Europe

BEV PHEV

0%

20%

40%

60%

80%

100%Japan

BEV PHEV

0%

20%

40%

60%

80%

100%

Ma

rket

sh

are

(%)

United States

BEV PHEV

0%

20%

40%

60%

80%

100%India

BEV PHEV

0%

20%

40%

60%

80%

100%Rest of the World

BEV PHEV

NPS EV30@30 NPS EV30@30 NPS EV30@30

NPS EV30@30 NPS EV30@30 NPS EV30@30

Page 27: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Power demand projections

Two-wheeler and bus electricity demand make China the highest consumer of electricity for EVs in both

scenarios. In the EV30@30 Scenario, electricity demand for EVs is more geographically widespread

0

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NPS EV30@30

TWh

Japan

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NPS EV30@30

TWh

United States

PLDV LCV Bus and Minibus HDV 2/3 wheelers

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NPS EV30@30

Europe

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China

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India

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Rest of the World

Page 28: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

GHG emissions

In 2030, CO2 emissions associated with the use of EVs are lower than those of equivalent ICE vehicles

at a global scale, even if electricity generation does not decarbonise from current levels

EV30@30 NPS

0

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2017 2020 2025 2030

Mt

CO

Avoided emissions, without grid decarbonisation, compared to equivalent ICE fleetAvoided emissions due to grid decarbonisationEmissions from EVs

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Page 29: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Managing the battery end-of-life treatment

• Rules over legal responsibility for battery end-of-life (1st/2nd/3rd life)

o Risk of disengagement and no battery management chains / recycling

o Risk of landfilling in-country or abroad (consumer electronics battery problem)

• Certifications and traceability schemes along the lifecycle of batteries (material extraction, assembly, use, 2nd/3rd life, recycling/disposal)

• Encourage manufacturing design enabling recycling processes that allow the recovery of high-value materials minimizing costs and energy use

o Regulatory framework mandating that batteries are suitable for physical separation?

o Need for multi-stakeholder coordination to understand scope for feasibility without hindering technological advances in battery chemistries/manufacturing

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PRIVATE & PUBLIC

EVSE ROLLOUT

DEMAND-DRIVEN & BUSINESS-DRIVEN EVSE

SUCCESSFUL GRID

INTEGRATION

MATERIAL DEMAND

MANAGEMENT

SECOND LIFE, END-OF-LIFE AND RECYCLING

Policies favouring the transition to electric mobility

CARBON PRICING

OF FUELS

PUBLIC

PROCUREMENT

BRIDGING THE

PRICE GAP

FUEL ECONOMY

STANDARDS

LOCAL ACCESS

REGULATIONS

ROAD PRICING

Page 31: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Stimulating the adoption of electric vehicles

• Carbon pricing on transport fuels

• Targets to phase in zero emission vehicles

• Public procurement programmes for zero-emission vehicles, providing a pivotal stimulus to market creation and expansion

• Bridging the price gap (adjusting to the EV uptake)

o Differentiated taxes on vehicle purchase, best if based on environmental performances (bonus/malus, feebates)

o Circulation advantages (free or discounted parking, free charging and access to priority traffic lanes and reduced charges on the use of transport infrastructure)

• Fuel economy standards

• Zero emission incentives (more flexible to technology development) or mandates (higher certitude)

• Local initiatives to regulate access

Page 32: The Global EV Outlook 2018 - centrodeenergia.itam.mxcentrodeenergia.itam.mx/sites/default/files/centrodeenergiaitammx/... · China BYD 8 2016 TL Ogan (2016) US LG Chem 2.6 2013 BNEF

Focus on fuel economy standards and ZEV incentives/mandates

• Fuel-economy and tailpipe CO2 emissions standards have demonstrated their efficacy to lead to improved ICE vehicle efficiency

• Standards must be sufficiently stringent to secure timely investment and help ramp-up production and supporting infrastructure

• Once legislated standards shall not be compromised by changes

• Standards can be coupled with differentiated purchase taxes

• Standards can also be coupled with ZEV incentives (more room for flexibility to manage technology uncertainties) or mandates (higher certitude on volumes)

• Life cycle approach desirable, but there is a risk of overlaps with other regulatory frameworks (such as those regulating emissions for the fuel supply chain) and implementation challenges

• Need to ensure that power generation and other fuels will also decarbonize (need for complementary measures in the power and fuel production sectors)