Growing interest in electric vehicles is set to shake up the automotive industry and cause ripple effects across commodity markets. Lithium is set to skyrocket, oil is to crash and platinum group metals (PGMs) are said to be safe… for now.
Although the electric vehicle market is still in its infancy, tighter emissions regulations coupled with a research and development-driven decrease in production and sales costs are expected to support demand.
Data from EV-Volumes shows electric vehicle sales made up just 0.6% of global vehicle sales in 2015 – despite rising 70% year-on-year to nearly 540 000 vehicles. The total electric vehicle population grew to one million in September 2015. The International Energy Agency (IEA) expects 20 million electric vehicle to be on the road by 2020.
So, what does this actually mean for lithium and platinum demand? Well, that depends on how the passenger electric vehicle market is segmented.
Canaccord Genuity analysts Reg Spencer and Larry Hill have divided the market into three segments: Hybrid Electric Vehicles (HEVs) which use internal combustion engines and battery cells to drive motors, Plug in Hybrid Electric Vehicles (PHEVs) which need to be connected to a power supply in order for their on-board batteries to be charged, and Battery Electric Vehicles (BEVs) which make use of lithium ion batteries to power their electric motors.
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