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Will the war in Europe accelerate the transition to e-mobility?

Goals have been set to separate European customers of Russian energy products from their dependence on an increasingly isolated state. The duration and consequences of the conflict are unknown, but it is certain that much of Europe has been shocked to change its trade relations with Russia, perhaps for a long time.

A faster transition from internal combustion engines (ICEs) to battery-powered electric vehicles (BEVs) will reduce reliance on oil, but replacing medium-term imported Russian oil with alternative oils will be difficult but unsuccessful. Not possible. Reducing Russia’s dependence on gas is much more difficult, and in 2020 gas was used to generate 20% of Europe’s electricity. Switching to BEVs means increased power demand, exacerbating the problem. Of course, the answer is renewable energy, but it’s a long-term solution. The current situation has the potential to accelerate the deployment of nuclear, wind, solar and hydropower, but not fast enough to make up for Russia’s gas taps being off. Inputs from wind and solar (a relatively fast deployment solution) need to be doubled to mitigate gas losses in Russia. This assumes that people can persuade them to lower their heating thermostats and wear extra clothing.

And, as widely reported, the cost of BEVs can rise significantly as the cost of raw materials for batteries (especially nickel) soars. It may be naive to display the additional cost of nickel-based batteries at US $ 100,000 per ton (LME’s recent peak price). Battery cell makers don’t pay that price. However, we can assume that there is market volatility in which prices are on the rise. At the very least, this can weaken or even stop and even reverse OEM plans to lower BEV prices. The chemistry of non-nickel and non-cobalt batteries can solve the problem and accelerate the adoption of LFP batteries. However, while the capabilities of that type of battery were developed beyond what was expected years ago, they are ideal for entry-level and low-range BEVs, and continue to be dependent on nickel chemistry with gigawatt equipment. Expected.

It is argued that the sharply rising road fuel prices will convince people to reject burning vehicles and switch to BEVs more quickly. If the rise in fuel prices had happened alone, we would now revise our BEV forecasts upwards. But we wait for how the situation evolves. Yes, the cost of owning a burning vehicle will increase, but it can be offset to some extent by reducing trips if possible. At the same time, widening the acquisition cost gap between ICE and BEV could weaken the enthusiasm for the utility business. One thing you have to find tens of euros more to fill a tank is another, but you have to find thousands more euros more than you expected to fund a BEV.

The oil crisis may be temporary, as alternative supplies are seen, but the problem of rising BEV prices can be difficult to solve. Governments can increase incentives to offset higher prices, but they are already generous in many European countries, and underfunded governments want to reduce them rather than strengthen them. I’m out.

So far, European forecasts have not significantly changed the ICE-BEV combination. Also, just as many Europeans face the hardest blow to the standard of living of their generation, the actual impact on top-line sales is likely to increase the total cost of ownership of both. Become.

https://lmc-auto.com/news-and-insights/will-war-in-europe-accelerate-the-shift-to-e-mobility/ Will the war in Europe accelerate the transition to e-mobility?

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