Although electric vehicle (EV) sales are slowing, they have surpassed expectations in the past few years. While an average EV still remains more expensive than an internal combustion engine (ICE) vehicle today, prices have fallen significantly in recent years. As shown in exhibit 1, the decline in lithium-ion battery pack prices since 2015 is particularly noteworthy.
Exhibit 1. Lithium-ion battery pack price trend, 2015 – 2023. Source: BNEF, C&EN, ADI CMR
In addition to falling lithium and raw material prices, development of new cost-effective battery chemistries are driving down the price of lithium-ion battery packs. Moreover, cheaper raw materials such as lithium iron phosphate (LFP) or sodium-ion batteries are expected to further make electric cars more affordable. These price reductions are anticipated to fuel EV demand in the foreseeable future.
Battery-electric vehicle (BEV) production is expected to constitute 43% of total light-duty vehicle production in 2030, a substantial increase from just 11% in 2022. Other alternative fuel vehicles such as plug-in hybrids (PHEVs) and full hybrid electric vehicles (FHEVs) will command much smaller shares. Exhibit 2 shows light-duty vehicle production outlook by type through 2030.
Exhibit 2. Light-duty vehicle production by type. Source: BASF, ADI CMR
ADI Analytics continually revises its forecasts for the light-duty vehicle market to gauge the trajectory of global fuel and electricity demand. Additionally, ADI Chemical Market Resources (CMR) closely monitors the chemical industry, which is significantly influenced by the rise of EVs. The chemical sector supplies various crucial chemicals essential for EV components such as powertrains, coolants, fabrics, and coatings. Interestingly, the quantity of chemicals utilized in an EV can be up to three times higher than that in a traditional ICE vehicle. To explore how EVs are driving demand for chemicals such as adhesives and sealants and their potential impact on your business, contact us!
By Panuswee Dwivedi
ADI CMR is a prestigious, boutique consulting firm specializing in chemicals, petrochemicals, polymers, and plastics since 1990. We bring deep, first-rate expertise in a broad range of markets where we support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
Our former industry-leading conference, FlexPO+ is now a part of the ADI Forum, one of Houston’s distinguished industry conferences, bringing c-suite executives from across the value chains in oil & gas, energy transition, and chemicals together for meaningful, strategic dialogue.
