Car Sales: – Strong Increase in Electricity

(Bil24): There are cries and chants in some circles that the electric car is about to die, and that fossil fuels will once again become the only source of salvation. Well, the facts show otherwise.

Bloomberg NEF recently filed its annual report, and it is unequivocal in its conclusion.

Electric cars are taking increasingly larger shares around the world, while the internal combustion engine is becoming less interesting. The numbers are broken down by market, but the trends are the same when the global picture is taken as a basis. It seems that the electric car is here to stay, just like the internet.

Growth of electric vehicles in the market by market:

But while the Internet is here to stay, there is no end to newspapers and magazines for that reason. They sell a little less. That’s also the case with the internal combustion engine. It can’t be phased out overnight, and some manufacturers were a bit optimistic when they set a timetable. So some have also had to adjust that timetable according to circumstances.

Bloomberg's annual report covers the entire year, so 2023 is the latest update. The report also examines the distribution between hybrid cars, hybrid cars, and fully electric cars. There's no doubt that electric cars are a reality, but it's very exciting to see the entire race, from cars with only combustion engines to cars with only electric propulsion – and the alternatives in between.

Here we see that both hybrid cars and electric cars are growing strongly globally, but the ratio between them is almost constant.

Growth of hybrid and electric cars:

On the one hand, there is a sharp increase in cars that get a fully or partially electric powertrain, because not everyone can jump straight to a fully electric system right away, depending on the market they are in. On the other hand, there is a longer period and a longer gap between cars running on pure petrol or diesel, because although some car manufacturers are now saying that the internal combustion engine will stay with us for a longer period, it is clear that in the absolute majority of cases this will be accompanied by an electric powertrain.

This also means that the need for batteries is growing, and growing sharply. Norway was one of the first countries to adopt pure electric cars, and has been pushing electric cars onto the market since 2011. But overall, Norway only accounts for 0.2% of global car sales annually, and it is only when major markets start to demand their share of batteries that the need for battery materials becomes clear.

From 2021 to 2023 alone, we have seen the number of gigawatt-hours (GWh) of storage capacity being produced double.

The new battery claims it can provide a range of up to 160 miles

In practical terms, the need for batteries has doubled from 2021 to 2023. This growth rate is enormous, but it is by no means expected to slow down in speed. This means that the rise of the curve in the illustration below will continue to accelerate in the coming years.

But that doesn't mean there are access challenges, because the same Bloomberg NEF report says there is significant excess capacity in the production sector, and access to batteries is currently good.

Prices are dropping sharply.

So what does this do to prices? Well, BNEF has included 2023 prices for LFP batteries in the report, and compared them to today’s prices, just half a year after the end of 2023. This shows that the price drop is massive in such a short time. Prices are then measured in US dollars per kilowatt-hour. So prices are reduced from US$95 per kilowatt-hour to US$53 per kilowatt-hour in the period from January to April of this year.

This is not only good news for electric and hybrid cars, but also for other applications that use batteries. It is also good news for energy from the sun and wind, for example, which also need storage in the form of batteries. Could this be the beginning of a new era in solar energy capture for Norwegian homes and businesses?

From fossil to renewable

As of today, Bloomberg NEF reports that only three percent of oil has been replaced by renewables, which is as good as nothing. This is despite the fact that we have already replaced daily consumption of 1.7 million barrels of oil – every day – and that is only going to increase. If we look at what the market will look like in a few years, we are only in the beginning hole, so far. That is according to Bloomberg’s projections.

When we round the annual production figure to approx. 100 million cars per year, we see from the above graph that in 2040 it is expected that more than 70 percent of global production will be electrified. In other words, the growth is exponential, and is creating a bleak picture for fossil cars, as we know them today. This is also in line with what car manufacturers are working on, because they all agree that the future is electric, even if there are different views on how quickly it will develop.