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The revolution in EV production reviewed


While the market for all types of electric vehicles (EVs), especially battery electric vehicles (BEVs) dependent entirely on electricity for propulsion, is still a small niche market in the US, it is poised to grow in coming years. It will be driven by additional, more diverse vehicles coming to market, their range increasing, more battery charging infrastructure coming online, and as the cost of the vehicles comes more into line with those powered by internal combustion engines. That trend is likely to have a positive impact on demand for such lighter weight materials as aluminium, advanced high strength (AHSS) and ultra-high strength steels (UHSS) and composites, as well as for various battery raw materials.

At present, only 0.3% of the light vehicles on the road in the US – about 1 million vehicles – are battery electric vehicles (BEVs), according to Zo Rahim, manager of economic and industry insights for Cox Automotive. Jeffrey Osborne, managing director of equity research for Cowen & Co., which recently released its Future of Mobility Primer, pointed out that the US ranks third in terms of global EV demand, running behind China (which accounts for 50% of demand) and Western Europe. EV sales currently account for between 1.0 and 1.75% of total US light vehicle sales, compared with 2.0% globally.

“But while the EVs are still a small share, it is a very fast growing part,” Rahim said, noting that EVs only accounted for 0.4% of new US light vehicle sales in 2016. Stephanie Brinley, a principal analyst with IHS Markit, said that US BEVs have been accounting for 1.5% of total light vehicle registrations both in 2019 and year to date 2020. “But we are just in the initial stages of the growth,” she said, given forecasts that the US BEV share will grow to 9% by 2025 and to just under 12% of the US market by 2030.

The US share for other types of electrified vehicles, including hybrids, is making even greater gains, which, according to Matthew Rolfe, focus manager for the Freedonia Group, is why total US light-duty hybrid (HEVs) and electric vehicles reached 4.3% of total domestic light vehicle sales in 2019, with expectations that on average its share will grow by 4.9% each year between 2019 and 2024.
The share for BEVs is even larger when compared with sales just of passenger cars, or sedans, which, according to Christopher Plummer, managing director of Metal Strategies Inc., is a logical comparison given that, at least to date, the lion’s share of light-vehicle BEVs are passenger cars (rather than petrol-driven light trucks including SUVs, CUVs and pickups that account for nearly 75% of the current US automotive market), although that is now starting to change with new EV models starting to come to market. He estimates that the BEV share of just the US passenger car market in 2019 was 9.5%, with the HEV share of that market being 15.5%.
From a production point of view, Abey Abraham, managing director of Ducker’s automotive and materials practice, said the electrified vehicle share of total North American light vehicle production is expected to grow from 11% in 2020 to about 30% in 2025, with the BEV share increasing from 3% to 9% and the hybrid share from 8% to 21% of total light vehicle output.

Policy influences

“The longer term outlook in the US will depend on the rulemaking and policy from the Administration, as well as the cost evolution for EVs versus ICE vehicles,” said Shalaj Gupta, director of marketing and performance improvement for ArcelorMittal North America, who added, “The EVs will grow. It isn’t a question of if, but rather when.”

John Catterall, vice president of the American Iron and Steel Institute (AISI) Automotive Program, agreed, stating that while BEV demand has not been taking off as quickly as many had anticipated, US consumers, especially those that just drive short distances, are becoming more comfortable with them, especially given some of their advantages, including quicker acceleration and a quieter, more comfortable ride.

It is a question of becoming more familiar with EVs, Brett Smith, director of technology for the Center of Automotive Research (CAR), said. “While the consumer comfort level is improving, it is uncertain if we are at the point that people are going to jump to start buying them,” he said, adding, “I’m not sure if it is ready for primetime yet, but I think it is getting a lot closer.” But Catterall said that even in 2030 he believes that more than half of the US fleet will have ICEs, or at least be some kind of a hybrid.

Bertrand Rakoto, Ducker’s senior engagement manager, said one big driver of this increase is the US fuel efficiency regulations, which remain stringent, albeit less so than those under the previous administration. “We also expect to see US demand to grow as the BEVs’ range increases further and as more vehicle models come into the market.”

Cowen’s Osborne said that one reason the US EV market trails China’s and Europe’s is that while the US government does offer a $7,500 tax credit for EVs, other developed nations offer more attractive nationwide subsidies and/or penalties to promote EVs and discourage the purchase of ICE vehicles. This, Plummer pointed out, includes mandated shifts in some regions to only sell EVs. California has taken a step in that direction with its governor signing an executive order to ban the sale of new gasoline- and diesel-powered passenger cars in the state by 2035.

To date there has not been a similar nationwide move in that direction in the US and the recent federal SAFE Vehicle Act has been a roadblock for California to enforce their zero-emissions vehicles regulations, Kevin Riddell, senior manager of Americas powertrain forecasts for LMC Automotive, said. He noted, however, that the fact that incentives favoring EVs that were scheduled to be limited and/or phased out were not removed suggests that the US Administration is not completely against EVs, which is encouraging auto and battery manufacturers to make EVs more affordable.

“They are trying to bring a more appealing product to more people, partly by lowering the price,” Riddell said, noting that Tesla, which is said to have a 75-80% share of the US EV market, has shown that when you make something that is desirable it will sell.
“At first that was with the very expensive Model S and Model X, but now they have started bringing their EVs down to a more affordable level with its Model 3 and Model Y, which the company recently launched.”

Rolfe noted this is very important. “It doesn’t matter how cool an EV is if you can’t afford both the vehicle and to install a charging station at your residence.”

Rakoto predicted that it will be another 15-20 years before BEV affordability and efficiency will fully match ICE vehicles, although he admitted that some inroads are being made with BEVs getting slightly less expensive at the same time as ICE vehicles are getting slightly more expensive.

More models on the way “Also the sheer number of new product offerings coming to market is also likely to bolster US EV sales,” HIS Markit’s Brinley said, noting that there are expected to be about 130 BEV models available by 2026, compared with less than 20 currently. She also observed that the types of offerings have been changing in an effort to switch EVs from being a niche product to one that the mainstream, mass market wants.

“Originally the auto OEMs thought that buyers of such vehicles like the Toyota Prius would eventually transition to EVs, but that really didn’t happen given that the bulk of consumers want an EV that looks and functions like a normal car,” Osborne said, noting that includes vehicles that are similar to those they currently buy.

In the US that is overwhelmingly light trucks such as sport utility vehicles, crossover utility vehicles and pickup trucks, which, according to Plummer, are approaching 75% of the market. Cox’s Rahim said that is why such long-established automotive OEMs like Ford and General Motors, as well as several recent start-up companies, are planning to offer fully electric truck models over the next several years. For example, in mid-September Ford announced that it will start building an all-electric version of its F150 pickup truck in 2022 at an upgraded production facility in Rouge, Michigan. Plummer said that overall traditional automakers will have a much bigger share of the US EV market over the next five to ten years.

Questions of range

A big question that many US consumers raise about EVs is their range, but CAR’s Smith maintained that range anxiety is only experienced by people who are not used to driving EVs. Rakoto said that most BEVs have a range of 200-300 miles, up from 120-150 miles ten years ago, largely because of increases in battery energy density. He said that once solid-state battery technology comes to market in 2026-28, their power density is expected to be 300-600 kilowatt hours, present. That, he said, will allow manufacturers to reduce the size of the battery, which is expected in turn to reduce the kerb weight of the vehicles by 300-400 lbs.

“The reality is that you don’t need a 300 mile range,” Abraham said, noting that most US households do not drive more than 30 miles per day. Riddel agreed, stating drivers only need a lot of range if they are going on a long trip. Abraham noted that the way that automakers are getting the best range out of their vehicles is by using several different material solutions, not just in the battery pack, but throughout the vehicle.

There is, however, a need for more, higher density charging infrastructure even though, according to Osborne, approximately 80% of US EV charging is done at home. ArcelorMittal’s Gupta said that it is estimated that in the US there is just one charger for every 19 EVs on the road. But that ratio is improving.

Some of the push has come from the automotive OEMs themselves, including Tesla, which has a network of proprietary charging infrastructure exclusively for its customers, as well as other automakers, including Volkswagen, which shares its charging stations with non-VW vehicles. “There are also many third-party groups (including ChargePoint and Blink) that are also developing and expanding charging technology in networks around the country to support the growth of EVs, although more work is needed in that direction,” Rahim pointed out. Many of the charging stations are only available on a subscription basis.

There could be political implications as to how fast new charging infrastructure will be installed. For example, as part of his Build Back Better plan, former US Vice President, and 2020 presidential candidate, Joe Biden is promoting expansion of the US network to 500,000 EV charging stations by 2030 from about 28,000 currently. “There are gasoline stations at every expressway exit. Until that happens with EV charging stations there won’t be the same comfort level,” CAR’s Smith said.

Faster-charging batteries

In addition to the need for more charging stations, Rakoto said that there needs to be further advancements in the charging and battery technologies themselves. He said the target is to speed up charging times from being able to achieve 80% charge in 30 minutes to 90% charge in 10 minutes within the next five to ten years. “To do that we need to have higher kilowatt chargers as well as vehicles that could receive that rate of power without burning up the battery,” he said, which he expects to be possible with a new generation of lithium ion batteries.

Rakoto said the two main battery chemistries being used in the US are lithium ion batteries with nickel, manganese and cobalt (NMC) and those with nickel cobalt and aluminium (NCA), with the NCA technology mainly being used by Tesla. Overall, he said, automakers are looking to reduce cobalt content due to cost and sourcing issues, which could lead to the use of high-purity aluminium. “US automakers are also trying to decrease the number of batteries that they source from China as multi-sourcing reduces dependency.”

Lighter vehicles

All this has big implications for the materials mix for EVs, Gupta said, given that, on average, electrification increases vehicle weight by about 20%, which puts higher demand on the body-in-white (BIW) and chassis components for meeting functional and safety requirements. He acknowledged that platform architecture and material strategy for EVs are very dynamic and evolving, but will continue to involve a different multi-material mix – one that will likely be clearer in nature within the next five years.

One certainty, Plummer said, is that, given the weight of the battery, there is more of a need to lightweight EVs, and therefore to use more lightweight metals and other materials than are used in a comparable ICE vehicle. AISI’s Catterall said that he is not expecting the gradual switchover to more EVs to reduce the demand for steel as a lot of the automotive OEMs, particularly traditional automakers, are making EVs with a steel-dominant structure, given that steel is more cost effective than most competitive materials.

Also, the batteries and battery packs cannot tolerate a lot of compression during crash impacts so any structure that surrounds them must be very strong, which he said could drive more demand for AHSS and UHSS. “The reason we are able to lightweight with steel it that it is getting stronger, with steelmakers working on steels with a tensile strength of up to 2 GPa compared with the best offering now at about 1,700 MPa.”

Abraham said that while overall steel use in North American light vehicles is expected to decline from a 52% share in 2020 from 48% in 2026, the share of AHSS will increase from 10% – 407 pounds per vehicle (PPV) – to 17% (600 PPV), replacing some mild steels. Multiple choice of materials The competition that has been going on between steel and aluminium for automotive production will continue, supported by the electrification trends and upgrades of charging infrastructure.

According to a study Ducker recently conducted for the Aluminum Association, while the average aluminium content for the average North American light vehicle is currently 459 PPV in 2020 and is expected to grow to 514 PPV by 2026, the aluminium content for the average BEV is higher – 643 PPV – but will fall slightly by 2026 to 629 PPV. Abraham noted that slight fall is not through lost share to other materials but due to the overall use of smaller, lower cost options. While some aluminium components used in ICE vehicles are not needed for EVs, a substantial gain in the use of aluminum sheet, extrusions and castings is expected for EVs, including in the body-in-white and closures.

Use of carbon fiber composites has also been increasing, including in systems to protect the battery, Freedonia’s Rolfe said, “But high-price materials like carbon fiber look less appealing in the context of already high-cost BEVs.”

Abraham called the move toward electrification of the powertrain a new golden age, stating that there will be more changes in the next five to seven years than the industry has seen over the past few decades. Nevertheless, he pointed out that automakers need to keep a careful eye on the overall carbon footprint of EVs, given that 60% of US electricity generation is currently based on the use of coal and natural gas.

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