Kickin’ the But(t)s Volume 1: Electric Mobility

When it comes to ecological transformation, the same objections – the famous “buts” – often recur. In this new column series, we want to give experts a platform to address and dispel these doubts. A “Yes” instead of a “But”, facts instead of fake news. With episode one, we turn to electric mobility as Tilmann Vahle, Director of Sustainable Mobility and Batteries at Systemiq, dispels a few common misconceptions

Tilmann Vahle | Apr 11, 2024

Prejudice: EV was just a hype, sales numbers are declining

Electric mobility is not just an alternative drive technology; it is the future of the automotive industry – even if it has recently been claimed that this is just a short-lived trend and the market is declining in the long term. The stagnation of e-vehicle registrations recently observed in Germany can be attributed to the abrupt discontinuation of subsidies previously provided in the country. Customers are waiting to see if the situation changes. Globally, electrified vehicles already account for a third of sales, and in China, nearly half! The rapid increase in the stock market value of EV companies speaks volumes – Tesla still has a higher market capitalization than all other car manufacturers combined, and BYD was valued more than Volkswagen in 2023. They have proven that electric drives are not a niche product for enthusiasts but can conquer mass markets. Both companies are already producing about as many vehicles as, for example, BMW or Mercedes, with a strong upward trend. Tesla’s Model Y was the world’s best-selling car for the first time in 2023.

Prejudice: Electric cars remain a niche segment

Skeptics who dismiss electric cars as a phenomenon of a “Green Bubble” overlook the economic benefits. Let’s look at China: There, electric cars are about to achieve cost parity with combustion engines, meaning they will reach the so-called price parity by 2024; in the USA, this is expected by 2025, and in Europe by 2026. At the same time, the vehicles are significantly cheaper to maintain. Keyword: energy efficiency. Electric vehicles utilize about 75% of the energy, while combustion engines only about 25%. European manufacturers, such as Volkswagen and Renault, have announced affordable models starting at approximately €20,000 – €25,000 by latest 2027. This will finally make electric mobility suitable for the masses.

Prejudice: The high purchase costs are not worth it

Electric cars are much cheaper to operate. The small number of moving parts in electric cars – we’re talking about a handful compared to 400 in a combustion engine – means lower maintenance costs and higher reliability. Consider the following calculation: Over the lifespan of a car, an owner of a combustion engine vehicle would be forced to spend the equivalent of another car just for fuel – often more than €50,000. This does not help the German automotive industry or German engineers because this money goes into the coffers of the oil industry. Therefore, I do not understand these defensive reflexes and the recurring – factually incorrect – argument about the “ban on combustion engines”. The truth is: From 2035, it will only be prohibited to sell new vehicles that are powered by fossil fuels. The widespread switch to alternative fuels, on the other hand, does not seem plausible because the scarce supply is urgently needed for other segments, such as aviation.

Over the lifespan of a car, an owner of a combustion engine vehicle would be forced to spend the equivalent of another car just for fuel – often more than €50,000.

Prejudice: We do not have enough raw materials for batteries

Wrong. The International Energy Agency and the Energy Transitions Commission clearly state that there is no geological scarcity of any of the materials needed for the energy transition. Although many analysts expect a tight supply of lithium and especially copper by the mid-2030s, battery and automobile manufacturers are already innovating to avoid this. The proportions of materials in batteries have already changed drastically, requiring significantly less so-called active material – cobalt, nickel, manganese, lithium, graphite – for increasingly better performance. Previously often in a 1:1:1 ratio for nickel, manganese, and cobalt, we are now at a ratio of 8:1:1. Iron phosphate batteries – already more than half of all batteries installed in passenger vehicles in China and the USA – contain no nickel and cobalt and only about half as much lithium. Sodium-ion batteries go a step further: they are based on sodium instead of lithium, which is available everywhere in the form of salt. This is a revolution in battery chemistry and an important development for more resilience in supply chains. It means that in the future, we will be less dependent on (short-term) scarce resources like lithium, while performance continues to increase. The fact is: The material requirements of an electrified world are vastly smaller than our current fossil system: by approximately a factor of 300. To put it in perspective: All the materials we will need for the entire energy transition worldwide by 2050 are less than the amount of coal mined in just one year. An unimaginably large improvement in humanity’s impact on nature.

Prejudice: Electric mobility is associated with child labor

Social aspects often cited as arguments against mainstream battery production cannot, of course, be ignored. The cobalt extraction in the Democratic Republic of Congo, often rightfully associated with child labor and catastrophic working conditions, poses a complex problem. However, artisanal mining, which is linked to these issues, accounts for only a small portion of total production. This share is now decreasing as the expansion of mining capacities is increasingly covered by industrial mining. This problem existed long before lithium batteries: cobalt is used in many steel alloys, although, until now, has not concerned anyone. The fact that batteries have brought global attention to this issue is fantastic because it leads to more efforts to improve local conditions. However, this should not be misused as a pseudo-argument to slow down electrification: The current fossil system, besides its immense achievements, also brings many alarming problems. For instance, around five years ago, UNICEF discovered that nearly a billion children worldwide suffer from toxic lead exposure. One of the main culprits: improperly disposed of car lead batteries. Thus, moving away from combustion engines, on the whole, can bring many benefits to the most vulnerable in society, such as children.

Prejudice: Other countries have long overtaken us

We have every reason to be more confident. German automakers are building some of the best electric cars. For example, Volkswagen’s ID.3, initially plagued by software problems and their “bread-and-butter model,” performs as well as Tesla’s Model 3 in various studies concerning hardware. In the premium segment, BMW and Mercedes rank among the top places worldwide in innovation rankings for hardware control and battery technology of electric vehicles. What is crucial now is to fully exploit this potential to regain the former market position. Clinging to technologies of the last century will rapidly lead to downfall – hopes for fig leaves such as biofuels and e-fuels are of no help.

And now?

We stand on the threshold of an era in which electric mobility becomes the new normal – a crucial step towards a sustainable, livable future. This is unstoppable for the majority of the global market. Therefore, we should face the challenge and work towards achieving a leading role in the new technology, just as we have done with combustion engines until now. This way, economic success will largely become synonymous with climate protection.

One unresolved issue remains that cars, whether electric or traditionally powered, occupy a lot of space in cities – but that is a different debate.

Tilmann Vahle

Director of Sustainable Mobility and Batteries at Systemiq

About Systemiq

Systemiq is the world-leading Systems Change Company: With 400 employees in seven locations on three continents, they work to align the global economy with the Paris climate goals and planetary boundaries. They advise companies and develop groundbreaking analyses. In the sectors of mobility, automotive, and batteries, Systemiq has been working with leading companies and multi-stakeholder organizations for many years: With the consortium, co-financed by BMWK, they support the implementation of the battery passport according to the EU Battery Regulation.