Mastering mobility: LEV batteries

Light electric vehicles (LEVs) are rapidly becoming a key component of modern urban mobility, with significant growth expected in the industry over the coming years. In Europe, LEVs are already outselling electric vehicles (EVs), with the market projected to triple by 2030 and double again by 2040 . In 2022 alone, 10 million LEVs were sold in Europe, nearly three times the number of EVs sold that year.?

The growing popularity of LEVs can be attributed in small part to the rise of shared micromobility options. Since 2018, over 800,000 shared micromobility vehicles have been deployed across 515 European cities. However, this growth extends beyond shared options to include personally owned LEVs; a surprising one in every five European households now owns an e-bike and in 2023 sales of e-bikes surpassed those of conventional bikes in Germany.?

LEVs as tools for the sustainable transition?

LEVs offer a unique solution in the efforts to accelerate the shift toward more sustainable transport modes. They provide various options that make shared and active mobility more attractive and feasible due to the wide variety of modalities that they cover. While some commuters may traditionally be deterred from cycling due to hills or longer distances on their routes, LEVs help bridge this gap and mitigate these concerns. This is significant, as the McKinsey Center for Future Mobility reports that roughly 60% of car trips within Europe are under eight kilometers – trips that are prime candidates for replacement by LEVs.?

As we approach the 2030 climate target of reducing greenhouse gas emissions by 55% compared to 1990 levels, it becomes increasingly clear that achieving this goal will require a comprehensive approach that considers all modes of transport. In this context, light electric vehicles (LEVs) have the potential to play a crucial role in Europe's decarbonisation efforts. A report from EIT InnoEnergy reveals that replacing just 13% of daily short-distance trips made by cars and vans in cities with LEVs could save 30 million tonnes of carbon dioxide equivalent (MtCO2eq) annually. However, to enable such a shift, policies supporting LEV uptake – such as the implementation of low emission zones – would be necessary. Additionally, to meet the rising demand for LEVs, and fully capitalise on this opportunity, Europe's battery value chain must expand accordingly.??

A recent study titled Leveraging the EU battery production to achieve net-zero with light electric vehicles conducted by EIT Urban Mobility and EIT InnoEnergy explains:??

“Existing policies are falling short of meeting the EU's 2030 targets, leaving a significant emissions gap of at least 165 MtCO2eq [165 million tonnes of carbon dioxide equivalent]. Furthermore, they are not generating enough electric vehicle demand to match the planned battery production in the mid-term, potentially leading to up to 3 times overcapacity until 2030. Nearly halfway through this decade, the EU must explore additional levers to accelerate the transition to sustainable mobility and bridge its emissions gap.”??

Claiming a share of the EU battery industry??

While there have been significant investments in the European battery value chain in recent years, with €126 billion in investments across 111 major projects , the focus has been on the production of EV batteries to boost EV uptake. However, according to the McKinsey Center for Future Mobility , 95% of LEV batteries are currently sourced from Asia, showing untapped potential for the European market.??

Expanding LEV battery production within the EU offers numerous benefits. Firstly, LEV batteries have versatile applications in other sectors , including use in power tools, residential storage and buffering for EV charging. This versatility contributes to the diversification of the EU battery market.??

Secondly, producing LEV batteries in Europe helps to mitigate supply chain risks that came to the fore during the COVID-19 pandemic. Given that material costs account for 60-80% of total cell costs , local production allows the majority of the value to be retained within Europe. Additionally, LEV batteries are integral to the e-bike market, which plays a vital role in the EU job market and workforce upskilling. By producing locally and encouraging micromobility uptake, Europe has the potential to create one million green jobs from this industry.??

Lastly, bringing production to Europe would allow for greater innovation capacity in the industry. To compete with Asian batteries in terms of price, safety and performance, Europe could focus on developing innovations with more performant chemistries. Investing in innovations such as sodium-ion batteries , which do not require lithium or cobalt and are more affordable and sustainable to produce, the EU battery industry could carve out a niche in the existing market.??

Even a minor adjustment in the allocation of the EU’s battery production is expected to have a significant impact. The EIT Urban Mobility and EIT InnoEnergy study found that dedicating less than 10% of the EU's planned battery production to LEVs by 2030 could drive a substantial modal shift in transportation, with a demand for critical resources projected to be 10-30 times lower than the demand for electric vehicles by 2040.?

Encouraging the LEV market?

While some cities have imposed restrictions on LEVs, particularly targeting shared micromobility e-scooters, this represents only a small segment of the LEV market. Overall, support for LEVs continues to grow steadily, as can be seen in major cities throughout Europe. From Barcelona’s Superblocks to Paris’ Plan vélo , more interventions are encouraging modal shifts by slowing down traffic and creating more space for cycling and walking, thereby supporting the adoption of e-scooters and e-bikes. As LEVs continue to be more widely embraced and purchased, it is crucial to invest in the EU LEV battery value chain to fully harness the potential of this mode to achieve our short and long-term decarbonisation goals.?

Want to learn more???

Read EIT Urban Mobility and EIT InnoEnergy’s full report Leveraging the EU battery production to achieve net-zero with light electric vehicles ?