More than half of US car sales will be electric by 2030
Just over half of passenger cars sold in the US will be electric vehicles by 2030, according to a report from BloombergNEF, thanks in part to consumer incentives included in the $374 billion in new climate spending enacted by President Joe Biden.
Those incentives, among them a point-of-sale tax credit of up to $7,500 for a new EV purchase, are likely to boost the pace of adoption, BloombergNEF analysts found in the report. Prior to passage of the Inflation Reduction Act (IRA) in August, projections for EV sales by 2030 2030 came in at 43% of the US market.
With the climate-spending measure in place, that estimate was revised upwards to 52%.
The latest projection from BloombergNEF puts the US on track to hit a key target set by Biden last year, for half of all cars sold in the US to be battery-electric, plug-in hybrid or fuel cell-powered by the end of the decade.
In 2021, electric vehicles accounted for less than 5% of sales in the US, below the global rate of nearly 9% and well below the adoption rate in countries like China, where plug-ins currently account for roughly 24% of new car sales.
Norway became the first country to see electric overtake combustion engine vehicle sales last year.
Under the revised forecast from BloombergNEF, the US will surpass the global average in 2026 instead of 2028.
The three automakers with the most domestic battery production coming online in the near termâTesla, GM, and Fordâare set to benefit most from the new law, according to the report.
At the insistence of West Virginia Senator Joe Manchin, the IRA restricts the full $7,500 credit to vehicles assembled in North America, with additional phased-in thresholds for manufacturing batteries in North America.
In the new report, analysts noted that these requirements âwill take time to adjust to,â particularly as automakers contend with critical minerals and battery rules. But those challenges are expected to lessen over time, a shift that could also bring more electric cars into an affordable price range.
âIn the next year or so, there shouldnât be too much of a difference [in sales],â said BloombergNEF electric car analyst Corey Cantor. âLater in the decade, we expect not only the EV tax credit but the battery production tax credit to drive a steeper decline in EV costs.â
California regulator sees 2035 EV mandate as âsweet spotâ
Californiaâs choice of 2035 as the deadline to end gasoline-only new car sales was the âsweet spotâ that will sharply cut emissions but was also realistic for the industry, the head of the stateâs clean air regulator said on Tuesday.
âWe had to be cognizant of where the automakers are, where the supply chains are, where the production facilities are,â California Air Resources Board (CARB) chair Liane Randolph told
Reuters in an interview during Climate Week, a summit that takes place alongside the UN General Assembly.
âI feel like we landed at the sweet spot.â
In August, CARB said it would require all new vehicles sold in California by 2035 to be electric or plug-in hybrid electrics (PHEVs) after Governor Gavin Newsom issued a 2020 executive order directing the move.
CARB said the rules will reduce smog-causing pollution from light-duty vehicles by 25% by 2037 and result in 9.5 million fewer conventional vehicles sold by 2035. Automakers in 2035 can sell no more than 20% of models as PHEVs.
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Investing abroad could be the solution to Americaâs clean energy future
California was not as aggressive as some environmental groups wanted, or Tesla, which urged ending new gas-powered vehicles by 2030.
âOf course an EV-only automaker is going to want as high a standard as possible because that is going to create a market for their credits,â Randolph said.
California needs a waiver from the US Environmental Protection Agency to adopt the 2035 rules, which will open the request for public comment.
âObviously itâs their decision to make but I mean thatâs why the waiver exists. So California can move forward and protect its residents,â she said.
President Joe Biden has called for 50% of all new vehicle sales by 2030 to be EVs or plug-in hybrids but not endorsed a phase-out date.
Some states that previously adopted Californiaâs zero emission vehicle rules have not yet signed on for the tougher 2035 phase-out date.
A spokesman for Coloradoâs environmental agency told Reuters, âColorado is certainly not California and Colorado has our own plan.â
Randolph said âsome states are ready right nowâ to adopt 2035 while others will âget more comfortable as the models continue to roll out.â
She said the regulator has other transportation emissions reductions in the works on medium- and heavy-duty trucks and for in-state locomotives.
Randolph added the state is âworking really hard on looking at the Imperial Valley as a potential source of lithiumâ for EVs.
Investing abroad could be the solution to Americaâs clean energy future
Asked about how many cars Tesla will have made by August 2032â10 years from nowâthe company founder Elon Musk
said: âIâd say 100 million is pretty doable.â
Reaching the 100 million mark by the end of the decade is also considered essential to reduce carbon emissions and achieve the
Paris Agreement.
In total,
22 US states have set the goal to have 100% carbon-free electricity before 2050.
A massive and rapid deployment of renewable energy is also central to Europeâs drive to end its
dependency on Russian fossil fuels.
However, even as president Biden declared this week
âDetroit is backâ and announced $900 million to build EV charging stations across America, the question remains how quickly the transition to renewable energy can be made.
In his latest
book âVolt Rush: The Winners and Losers in the Race to Go Green,â Benchmark Mineral Intelligence Executive Editor Henry Sanderson discusses the global supply chain of materials and mining needed for the electric push.
MINING.COM: Is it feasible for us to transition to clean energy over the next decades?
We have to.
You look at the extreme weather, this year was the hottest in Europe.
China is dealing with record heat waves. So we have to move to clean energy.
Countries like China are victims of climate change that also produce many of the solutions.
So I think thereâs a huge incentive to scale up clean energy and the costs.
The Russian invasion of Ukraine highlights how our reliance on fossil fuels is so problematic.
It may be difficult if we donât want to rely on China at all. Does the US and Europe want to do it on their own without China?
Thatâs going to be more difficult in the time frame, by 2030, but with China, I think itâs possible.
MINING.COM: Is there enough metal to replace oil?
I think few people are aware that to solve climate change, we need speed and scale.
Scale is critical.
So when youâre talking about the scale of batteries for EVs, for energy storage, there are enough raw materials on the earth.
The problem we have is that this energy transition is quite a policy-driven one.
It has to be fast to meet the climate goals. Weâve left it so late.
So when you have this exponential demand increase this decade and the next, itâs gonna be hard for mines to keep up. And also what sort of social environmental cost are we willing to bear to get all these mines into production?
Where are we willing to mine?
MINING.COM: Mining in America is not a really popular topic. How do you see Bidenâs Administrationâs push to clean energy so far?
The
Inflation Reduction Act is important because itâs a signal and action.
The critical mineral requirements are very strict and difficult to meet. If mines can get approved in the US, then I think thereâll be policy support for it but it is difficult.
So what I see happening is probably more Canada.
Thereâll be more mine development in Australia, in these free trade agreement countries.
What you need to do is build up the processing in the US or North America and Canada.
So you know that you can divert the raw materials from Australia to North America, not to China.
Itâs just an industrial facility, itâs not rocket science.
If the US and Europe want to completely develop their own supply chains by scratch, thatâs going to be very challenging
I think probably the best thing is to help these mineral-rich countries with mining backgrounds to develop their mines.
Thatâs probably easier than building in the US.
Why arenât we helping the DRC?
Thereâs graphite in Mozambique, for example, and these are all places that will suffer from climate change but can benefit from these minerals.
MINING.COM: What are the biggest challenges right now for the energy transition?
The biggest challenge is geopolitical.
If the US and Europe want to completely develop their own supply chains by scratch, thatâs going to be very challenging.
Given the urgency of this energy transition, we probably all need to work together a bit more.
The second challenge is the poorer countries.
What are we going to do to help them?
What we can do to help them mine sustainably and responsibly?
There are a couple of risks.
First is that tensions escalate to a point where China considers using its leverage.
Weâve seen China boycott foreign companies and foreign goods.
The second risk is that a lot of these Chinese companies are very innovative, especially battery companies.
If there is a shortage of batteries or raw materials, how much will they get priority over Western companies?
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