Lithium: global demand forecasts?

This data-file estimates global demand for lithium under our roadmap to net zero, and integrating with our oil market models. The data are disaggregated across electric vehicles, new vehicle types, consumer electronics, grid-scale batteries and conventional material uses.

Demand for lithium has already trebled from 23kTpa in 2010 to 65kTpa in 2020, while we see the ascent continuing to 500kTpa in 2030 and almost 2MTpa in 2050.

90% of demand in the 2040s is driven by transportation, especially electric vehicles. Categories such as ceramics, glasses and lubricants, which historically comprised one half of the market are crowded out.

There are sufficient lithium resources globally to meet this ascent, with 14MT of reserves and a 10-year reserve replacement ratio of 1000%. A 50% reserve replacement ratio should suffice to deliver our forecasts out to 2050.

Short notes on the market follow in the final tab of the data-file.

Oil demand: the rise of autonomous vehicles?

We are raising our medium-term oil demand forecasts by 2.5-3.0 Mbpd to reflect the growing reality of autonomous vehicles. AVs eventually improve fuel economy in cars and trucks by 15-35%, and displace 1.2 Mbpd of air travel. But their convenience also increases total travel demand. This 20-page note outlines the opportunity and leading companies.

CO2 from electric vehicles versus ICEs and hydrogen?

This data-file tabulates the CO2 intensity of producing and charging lithium ion batteries for automotive use, split across 10 different components, informed by the technical literature. Producing the average EV battery emits 9T of CO2 (chart below).

Electric Vehicles should nevertheless have c50% lower emissions than gasoline vehicles over their entire useful lives, assuming equivalent mileages. Although we see gasoline vehicles’ fuel  economies improving.

Manufacturing EVs has an energy deficit, which means the ascent of EVs could increase net fossil fuel demand all the way out to 2037 (note here).

This data-file can be used to calculate the crossover point, which comes after around 3.5 years and c50,000 miles (chart above). The numbers will vary as a function of grid composition, technical improvements and vehicle specifications.

US Air Passenger Miles and Fuel Economy?

This data-file tabulates statistics on the US aviation sector, from the Bureau of Transport Statistics, to compute the fuel economy of US air travel, per plane-mile and per passenger-mile.

In 2019, 10M US flights carried 930M passengers 1.1 trn passenger-miles. The latest data in the file run to February-2020. The latest date in the file run through the end of 2020, and show flights down 40%, passengers per flight down 40% and total passenger miles down -65% for 2020.

Fuel economy per passenger mile has risen at a 2.8% CAGR since 2003. Flight numbers have fallen by -0.4% pa and flights have become 0.8% longer.  But load factors have improved by 0.7pp each year, spreading 0.5 plane miles per gallon across more passengers. Low load factors worsened fuel economy by c40% in 2020.

Electric trucks: what battery sizes?

This data-file models the possible battery sizes in a fully electric semi-truck. Lithium ion batteries up to 15 tons are considered, which could deliver 2,500 miles of range, comparable to a diesel truck.

However, large batteries above c8-tons in size detracts around 10% from the fuel economy of electric trucks, and may cause trucks to exceed regulatory weight limits, lowering their payload capacities.

4-6 ton batteries with 700-1000km ranges and 5-8% energy penalties may be best, and would likely add $110-170k of cost at 2020 battery costs. 

Our roadmap to decarbonize trucking most prefers carbon-offset diesel, then hybridization with super-capacitors, then electric semi-trucks, and least prefers hydrogen trucks.

Electric vehicle charging: the economics?

This data-file models the economics of electric vehicle chargers. First, we disaggregate costs of different charger types across materials capex, labor capex, permitting, fees, opex and maintenance. Next we model what fees need to be charged by the charging stations (in c/kWh) in order to earn 10% IRRs.

Economics are most favorable where they can lead to incremental retail purchases and for larger, faster chargers.

Economics are least favorable around multi-family apartments, charging at work and for slower charging speeds.

Nickel, manganese, cobalt: sufficient reserves for the rise of EVs?

This data-file models whether there will be enough nickel, manganese and cobalt, to build the batteries behind the vast rise of electric vehicles embedded in our oil demand forecasts.

Our conclusion is that the outlooks for nickel and manganese are unconcerning, due to strong recent reserve replacement ratios. But the need to ramp up, reduce and recycle cobalt will be a challenge.

You can stress-test the input assumptions in the model, varying the ultimate sales of electric vehicles, other demand growth, recycling rates and reserve replacement ratios.

Proton exchange membrane fuel cells: what challenges?

This data-file reviews fifty patents into proton exchange membrane fuel cells (PEMFCs), filed by leading companies in the space in 2020, in order to understand the key challenges the industry is striving to overcome.

The key focus areas are controlling the temperature, humidity and longevity of hydrogen fuel cells. But unfortunately, we find over half of the proposed solutions are likely to increase end costs.

We remain cautious on the practicalities and the economics of hydrogen fuel cell vehicles (2x most costly than conventional vehicles per km, note here) and hydrogen fuel cells for power generation (10x more costly, note here).

Electric vehicle charging: what challenges?

This data-file tabulates the greatest challenges for charging electric vehicles, based on the recent patent literature, looking across fifty patents filed by leading companies.

Our top three conclusions are that EV charging will require complex algorithms to ensure grid stability, creating an opportunity for big data companies; vehicle-manufacturers are concerned about balancing the convenience of EV charging with the investment costs of charging networks; while interestingly, increasing speed of charging is not a primary focus.

Our conclusions are typed up in the data-file, plus the full back-up of patents from large OEMs, EV-charging specialists, capital goods companies that make components and tech giants, working on optimization algorithms.

Lithium ion batteries for electric vehicles: what costs?

This data-file disaggregates the costs of electric vehicle batteries, which have been reported at $156/kWh in 2019. But how much deflation lies ahead, and is it possible to reach competitiveness with ICEs?

Our breakdown covers c25 categories, including materials (cobalt, lithium, manganese, nickel et al), manufacturing and cell finishing. Detailed estimates are also provided for 10 different cell chemistries, covering NCA, NMC, LFP and others.

Further deflation is expected in manufacturing costs, to help the industry reach cost-competitiveness with ICEs. But it will be counteracted by potential re-inflation for materials, and another more crucial consideration: The industry must eventually strive to earn acceptable profits and returns above mere cash costs.