Europe reacts to EV threat from China & US, switch out of REEs
Quite a few interesting points that came out of Advanced Propulsion Centre UK 's automotive industry demand forecast last week.
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1.???? Demand for EVs (electric vehicles) is switching from Europe to North America, including Mexico and Canada, influenced by the US Inflation Reduction Act, or IRA. The report forecasts demand out to 2030, and demand forecast for Europe is lowered by 100 GWh, UK by 7 GWh in 2030.
?The US has replaced Germany as the second highest EV market.
Manufacturers globally are looking to reduce electric vehicle costs triggered by a perceived threat from Chinese manufacturers.
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European countries are looking to implement policies to alleviate the risk of a falling EV market under pressure from the IRA.
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France has introduced cash incentives to buy EVs, which can be up to Eu7,000 per vehicle depending on income. Now a new French policy launched c. 20 September is designed to favour French and German carmakers over Chinese rivals. Cars will receive a “green score”, where scoring is based on CO2 in the vehicle’s supply chain, the assembly and transport.
In most cases this will rule Chinese vehicles out from the EU5,000 or more per vehicle incentive, and it hopes to push people to buy locally-made cars. UK made vehicles would potentially qualify for that, too.
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2.???? The report also shows the influence of magnet materials inc rare earth elements (REE), and their supply chains on motor types
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Motors use magnets which are made from specific materials, typically REEs like neodymium. There are global attempts to move away from relying on REEs, mainly because 85% of the world’s supply is in China, hitting supply security.
Also there is a strong social and governance aspect to materials from China and other countries such as in north Africa where mining conditions are not regulated.
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Tesla is believed to be considering switching to ferrite magnets, following a Tesla press release in March 2023. APC suspects they’ll move from rare earth magnets to ferrite magnets. Ferrite materials cost 80-90% less than materials used in neodymium-based magnets. These magnets can deliver similar performance to REE-based magnets but need to be bigger.
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The UK is fairly strong as a magnet materials industry, in REEs sourced outside China and in non-REE materials. We have government-backed Pensana building a new refiner in East Yorkshire, and Less Common Metals, Advanced Electric Machines that build magnet-free motors, and
Ionic Technologies in Northern Ireland for recycling metal for magnets.
?Materials effect the choice of motor and APC’s forecast says the share of Permanent-Magnet Synchronous Motors (PMSM) is expected to reduce while Induction Motors (IM) and Electrically Excited Synchronous Motors (EESM) increases.
?For materials used in lithium ion batteries, globally, the growth of LFxP (lithium iron phosphate) will push the share of NMC (nickel manganese cobalt) to below 50% by 2030.
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3.???? Growth of BEVs.
The future pattern is thee dominanc of battery electric vehicles (BEVs) over all other types.
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In 2022, for passenger cars and vans, c. 22 million EVs were produced, of which 8 million or 40% were BEVs. The report forecasts 76 million EVs globally by 2030, growth of 345% in eight years, of which 44 million or 58% will be BEVs. PHEVs, plug-in hybrids, remain a similar percentage over time. The proportion is greater in Europe and the UK, where (the UK) 78% of all EVs will be BEVs by 2030, and in Europe the total BEVs forecast for 2030 is 11 million, up nearly 800% on today.
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Is this important? BEVs are the fully electric vehicles, and summer 2023 is the first quarter that APC has seen the global battery electric forecast tip in favour of BEVs. ?That has been pushed up with a of investment in the US. China continues to grow and now, newcomer India has plans to electrify fast as well – countries with huge populations are putting serious money in their manufacturing and charging networks, driving up BEVs.
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In the UK EV and battery demand will be 930,000 BEVs and 90GWh demand by 2030 – the latter up 18 times the demand today. In the UK, there will be a lot less PHEV compared to other markets, as Brits favour BEVs.
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So, two big takeaways is the switch to ferrite magnets from REE-based magnets over time, easing supply chain risk with China, but also for battery materials generally, including cathode active materials and battery foils: all forecasts show a huge jump in material demand from 2027 to 2030
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The report also says that meeting the current timeline for EU rules of origin continues to be a key challenge for UK-based BEV manufacturers
LINKS: Info on the new magnet material mine in East Yorkshire, Pensana:
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More on EV purchase incentives in France:
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R&D Project Management and Funding specialist.
1 年Good to see Advanced Electric Machines magnet free (and therefore rare earth free) motor technology mentioned!
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1 年You write, "Globally, the growth of LFxP (ferrite magnets) will push the share of NMC (neodymium) magnets to below 50% by 2030." This is misleading and incorrect I am sorry to say. Your sentence refers to the market share of battery technologies, not magnets. Both LFP (lithium iron phosphate) and NMC (nickel manganese cobalt) are types of lithium ion batteries but with differing cathode compositions. Essentially there is a shift in global demand from one lithium ion battery type to another which has nothing whatsoever to do with magnets.
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1 年REE in e-motors ia a minor problem as weight and value of them is not so high. On the contrary, Li, Co ame other elements in batteries are a major problem. Chinese companies control up to 85% Li refining. It means that all brands use Chinese Li - European, Chinese, Japanese, US, Saudi, Turkish, you name what. Governments may pay people to buy EVs but they will be able to do this all the time - the number of EVs grow and only few EU governmemts are rich enough. As huge money are spent on hydrogen, wind, pv, bio technologies the budgets are under higher and higher stress. Take into consideration that the needs to rebuild the defence what will take billions. Subsidizing EVs does not look promising! But customers even in rich countries get used to be paid to buy EVs and seem to be price sensitive - even Norway had to renew the subsidies recently as very significant decrease was observed in EVs sales when program was finished. Will (and when!) the governments be able to build these fields as self-supporting without subsidies?
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1 年Great write up, thanks Will. I find the conversations around EV and future supply challenges a little baffling sometimes, your write up is definitely insightful. Thank you! I hope you are well.