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Okay, so…they have a point.

The reality is that building electric cars currently produces more pollution than building gasoline-powered cars. This has been stated by Electric Vehicle (EV) manufacturers themselves, like Tesla. The higher emissions are due to the high energy requirements for battery production and materials. However, EVs are much more efficient to operate as opposed to gasoline powered vehicles, so EV’s can actually reduce emissions in the long run, even in places where most electricity comes from coal.

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Graphics: Mike Hassaballa, Source: IEA analysis based on IEA (2020c); Kelly et al. (2020); Argonne National Laboratory (2020).

The higher EV production emissions actually come from battery manufacturing, and most battery manufacturing is in China. The Chinese energy mix is not necessarily the cleanest, as they rely heavily on fossil fuel, as we discussed before. However, there is a good chance that this will improve over time. China currently dominates battery production, with 93 gigafactories producing lithium-ion battery cells versus only four gigafactories in the U.S. This accounts for more than 80% of global production of battery components and materials to date. This is arguably a disadvantage in supply chain reliability, as the majority of the production is centralized in China. However, battery production factories are expected to be built throughout the globe to satisfy the expected increased demand.

There is more good news on the battery cost front, every time the global supply of batteries doubles, the price of production decreases by 18 percent. Scaling up production may not only reduce costs, but may also trigger more clean and efficient production, resulting in less emissions.

Battery Supply Chain Production Sucks

The supply of materials for electric batteries can also be problematic. Taking cobalt for example, it can make up to 6% of an EV battery. 70% of global cobalt reserves reside in the Democratic Republic of Congo (DRC), which makes the DRC one of the main providers for cobalt for EV batteries. There are many concerns in the DRC related to child labor and unsafe mining conditions related to cobalt extraction. This is an attack vector for EVs as long as cobalt is involved in EV batteries. However, some automakers are exploring cobalt free EV batteries in addition to battery recycling which will be critical to decarbonization in the next few decades.

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The 50,000 Miles trip, Graphic: Bloomberg NEF

Issues with battery supply chains are hard to solve as it takes substantial infrastructure investments as well as social efforts to localize the supply chain. Building mines, roads, refineries and battery manufacturing facilities requires time, as well government and community support. However, once localized, it increases overall production system reliability. Another ad-hoc strategy in the supply chain is vertical integration of EV manufacturing to batteries which may or may not be feasible, given that not all automotive manufacturers have battery manufacturing capabilities.

In the end, lobbying against EVs, because of high production emissions, is not a valid argument, given the relatively short period EVs need to break even and to be net-positive for the environment. Supply chain and technology improvements can also kill the argument against inefficiencies, resource exhaustion, as well as ethical issues in battery production.

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References:

[1] “Tesla 2020 Impact Report.” https://www.tesla.com/ns_videos/2020-tesla-impact-report.pdf.

[2] “What is a Low Carbon Transformation? Part III: It is not only about ….” 7 Apr. 2021, https://medium.datadriveninvestor.com/what-is-a-low-carbon-transformation-part-iii-it-is-not-only-about-technology-192145d0d732.

[3] “The US is behind China and Europe in lithium-ion battery production.” 11 Feb. 2021, https://www.washingtonpost.com/technology/2021/02/11/us-battery-production-china-europe/.

[4] “China Dominates the Lithium-ion Battery Supply Chain, but Europe ….” 16 Sep. 2020, https://about.bnef.com/blog/china-dominates-the-lithium-ion-battery-supply-chain-but-europe-is-on-the-rise/.

[5] “Electric vehicle boom to trigger spending of $560 billion to build Li ….” 3 Jun. 2021, https://www.rystadenergy.com/newsevents/news/press-releases/electric-vehicle-boom-to-trigger-spending-of-$560-billion-to-build-li-ion-battery-factories-this-decade/.

[6] “A Tesla Co-Founder Is Building a U.S. Battery Industry — Bloomberg.” 14 Sep. 2021, https://www.bloomberg.com/news/articles/2021-09-14/a-tesla-co-founder-aims-to-build-an-entire-u-s-battery-industry.

[7] “Effects of battery manufacturing on electric vehicle life-cycle.” 9 Feb. 2018, https://theicct.org/publications/EV-battery-manufacturing-emissions.

[8] “Electric cars and batteries: how will the world produce enough?.” 17 Aug. 2021, https://www.nature.com/articles/d41586-021-02222-1.

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