BHP has released statistics suggesting that the global uptake of electric vehicles (EVs) could be larger than the company initially anticipated.
BHP has revised its EV penetration estimates to 2035 and 2050 to reflect the greater variety of forecasts available in the markets, building on material first published by the company over two years ago in its inaugural Prospects blog post.
Huw McKay, BHP vice president, market analysis and economics said that the forecasts that were available at the time BHP posted this blog “described a bi-modal range: either dismissive or ebullient. There was little in between. Much has changed since that time. The space is now ‘crowded’ with forecasters.”
BHP has subsequently raised its low case for EV market share to 7 per cent by 2035 (previously 5 per cent) and 27 per cent by 2050 (previously 21 per cent).
The company also stated that its low case outlook for the share of EV sales among light vehicles was now estimated at 16 per cent in the low case and 47 per cent in the high case, up from the previous estimates of 10 per cent and 35 per cent, respectively. This translates to 132 million EVs by 2035 and 561 million EVs by 2050.
The company went on to explain that the milestone of 100 million EVs on the road will contribute to a reduction in global oil demand of 1.3 million barrels a day. In the mid-case, EV demand will result in a cumulative net copper demand of 17.3 million tonnes to 2035, while the worldwide EV fleet will consume 5 per cent of global electricity by 2050.
EV production has been tightly linked to battery metal demand over the last few years due to EV manufacturers’ reliance on materials such as lithium, cobalt, nickel, and rare earth elements (REE) for battery production. BHP’s blog cited the ‘sweet spot’ for mass market battery production costs as $100 per kilowatt-hour, down from its current average of $180.
“We agree with the consensus position that when battery pack costs fall to $100 per kWh, EVs become cost competitive in the mass market – with a ‘people’s EV’ very likely to emerge,” said McKay.