Electric vehicles (EVs) will be a major driver for the battery industry, with major car companies seeking to phase out petrol and diesel models in leading markets by 2035, reflecting government regulation and order.

The following are the main regulatory trends affecting the topic of batteries, as identified by GlobalData.

Exemplary Norway

Norway (followed by Finland and Sweden) is the greenest country in the world, thanks to the fact that hydropower generates over 95% of electricity. In 2020, it became the first country where over 50% of new cars sold were electric. This was supported by the abolition of sales taxes and value added taxes (VAT) on electric vehicles (EVs), the reduction of road tax, the offer of free passes on toll roads and free, preferential parking in city centers.

The country has aggressive plans: after 2025, new passenger cars, city buses and light minibuses should have zero emissions, and by 2030 the same should apply to heavy vehicles and long-distance buses. Norway is investing heavily in the creation of a circular battery industry and aims to be the center of the European Union’s (EU) batteries.

Lithium Triangle Race

According to the US Geological Survey, the lithium triangle, consisting of Chile, Bolivia and Argentina, accounts for 58% of the world’s known lithium reserves. Due to favorable conditions for foreign funding, better geology, access to ports and a less destructive political landscape, Argentina and Chile are far ahead in production. Lithium (Li) mining is a politically charged issue in the lithium triangle. The challenges lie as each nation struggles to reach a politically feasible solution to secure foreign investment, ensuring that local groups benefit while developing more profitable downstream industries, such as battery recycling or production.

The production of lithium-ion batteries in the region will require public-private partnerships. The United States is likely to consider funding such ventures to bring cell production closer to home, reducing China’s dominance. Argentina can offer the largest possible market for Li production in the next half decade.

Bolivia’s Salar De Uyuni saltworks contain one of the world’s largest reserves of Li. However, Bolivia faces technological, political and infrastructural barriers. Lee in Bolivia is stored in brine from a salt lake, which makes it difficult to extract.

Foreign investment in technology and logistics would significantly accelerate production. However, there is a consistent public and political opposition to foreign investment and deals with her Li.

COP26 wastes, part one

At the UN Climate Change Conference in 2021, commonly called COP26, about 24 countries (plus city and state governments) signed a declaration to accelerate the transition to zero emissions from cars and vans by phasing out gas and diesel by 2035. in the leading markets and by 2040 in the rest of the world. Battery-powered EVs will be the main alternative to internal combustion engine (ICE) vehicles and are crucial for reducing emissions from transport.

The Article 6 rules agreed at the conference, which now allow carbon offsets between countries in transnational projects that have led to emission reductions, must help foster progress. Meanwhile, the United States, China and Germany have not signed the declaration, although 12 US states, led by California, have signed it.

Consequences of COP26, part two

Some 42 countries, including the United States, China, South Korea, the United Arab Emirates (UAE) and the United Kingdom, along with the EU, have agreed on a COP26 breakthrough program, pledging to make clean technology the most affordable, affordable and attractive option. in each sector with global emissions by 2030. The target industries are electricity, roads, transport, steel, hydrogen and agriculture.

Like other agreements and COP26’s agenda, the hope is that shame, international reporting and coordinated international efforts, plus the growing power of Generation Z, will move the world towards a kind of transparent global approach to climate policy. and performance.

Graphite tariffs

China dominates the supply of graphite, a key material in the anodes of lithium-ion batteries, holding between 75% and 80% of global supplies. China has had a surplus of graphite for some time, which keeps the price of the material from rising sharply. This surplus is declining as China increases its production of electric vehicles and the price of raw materials is expected to increase. Almost 100% of the processed natural graphite anode material comes from China, and carmakers such as Tesla have begun to note how this will affect their profits.

Tesla wrote to the US government to demand the abolition of tariffs on graphite, saying it could not get enough from US sources. She recently signed a contract with the Australian company Syrah Resources, which shows that she is taking steps to diversify supplies. There will be more pressure on the US government to abandon this tariff, without which EV prices will continue to rise. The Biden administration must choose between stepping up the adoption of electric vehicles and thus climate ambitions or limiting China’s dominance in the raw material supply chain.

This is an edited excerpt from Batteries – Case study report prepared by GlobalData Thematic Research.

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