APC Report: 2035 BEV Production Target Achieved

Greetings, Net Zero News Community,

Exciting developments are unfolding in the UK’s journey towards a greener future as recent analysis from the Advanced Propulsion Centre UK (APC) reveals promising insights regarding the nation’s trajectory towards achieving the 2035 zero-emission vehicle (ZEV) production target. The latest quarterly demand report from the APC maintains that the UK is on course to meet its ambitious goals, although it does indicate a slower-than-expected growth in demand over the coming years.

While the forecast for 2035 remains largely unchanged, the report highlights a contraction in global demand projections for 2027 and 2030, with reductions of 14% and 12% respectively. This shift poses challenges but also opens up discussions about the evolving landscape of electric mobility and the strategies needed to maintain momentum.

In the short term, the spotlight shines on electric hybrids, which are anticipated to experience significant growth, particularly within Europe. However, this trend is expected to transition over time as consumer preferences shift towards battery electric vehicles (BEVs). This evolution underscores the critical need for investment in new technologies and the advancement of battery-cell chemistries.

The demand report projects that global battery requirements for passenger cars and light-duty vehicles, including small vans, will soar to approximately 4 terawatt-hours (TWh) by 2035. This represents a compound annual growth rate (CAGR) of 14%, with the UK and Europe exhibiting a slightly higher CAGR of 17%. Such figures illuminate the pressing need for robust infrastructures to support this burgeoning demand.

One of the key takeaways from the report is the emphasis on developing a comprehensive supply chain across Europe for cathode active materials (CAM) and anode active materials (AAM). These components are vital for the production of batteries that power the next generation of electric vehicles, making their availability a top priority for manufacturers and policymakers alike.

Julian Hetherington, Automotive Transformation Director at the APC, expressed optimism regarding the report’s findings. He stated, “It is reassuring to see our predicted figures for 2035 largely on track towards our prior forecast position in the Q1 demand report 2024, acknowledging some near-term reductions reflecting market conditions.” His insights highlight the balance between ambition and realism in the face of shifting market dynamics.

As the demand for BEVs continues to rise, Hetherington noted significant advancements and innovations in battery chemistries, particularly the growing adoption of lithium-iron-phosphate (LFP) batteries. These batteries are gaining traction due to their cost-effectiveness and the superior safety performance they offer. The forecasts suggest that LFP chemistry could account for as much as 30% of the market share across Europe and up to 25% in the UK by 2035. Globally, LFP could represent nearly half of all BEVs, with a projected share of around 45%.

“Because of this increased appetite for LFP chemistries, there is a focus within the report on the UK’s competitiveness for LFP and lithium-manganese-iron-phosphate (LFMP) cells,” Hetherington highlighted. Understanding this demand and the potential for these chemistries is crucial for attracting investment into the battery value chain, ensuring that the UK remains a key player in the global electric vehicle market both now and in the years to come.

Dr Hadi Moztarzadeh, Head of Technology Trends at the APC, provided further perspective on the anticipated growth trajectory. He stated, “Any expedited growth ahead of our predictions would lie in the introduction of more models than we are currently expecting. We can say with confidence that the outlook for the UK’s production volumes looks positive, despite a shaky past 12 months and continuing near-term numbers stalling compared to what we had previously anticipated.”

Moztarzadeh emphasised the importance of looking further ahead, noting that by the end of the decade, steady growth in production volumes is anticipated. Globally, the APC forecasts that approximately 105 million cars and vans will be produced annually by 2035, with nearly 50% of this total being BEVs. Within this global figure, the UK is projected to produce around 1.2 million cars and vans each year, with a remarkable 1.1 million of these expected to be BEVs.

However, the path to achieving these production goals is not without its challenges. Moztarzadeh pointed out that a critical focus must now be placed on supply chains and the capacity within Europe and the UK to provide both battery cells and sub-components necessary for localised vehicle production. At present, there is a mismatch between production capabilities and demand requirements, creating a gap that needs to be addressed through strategic investment.

As we move towards a sustainable future, it is imperative that stakeholders—including manufacturers, policymakers, and investors—collaborate to build a resilient supply chain that can meet the burgeoning demand for electric vehicles. The APC’s report serves as a clarion call for action, urging all parties to recognise the importance of investment in the battery value chain, particularly for LFP and LFMP technologies.

In conclusion, the UK stands at a pivotal juncture in its transition to electric mobility. The path ahead may be fraught with challenges, but the potential for growth and innovation remains vast. By harnessing the insights gleaned from the APC’s latest demand report, the UK can position itself as a leader in the global electric vehicle market, driving forward towards a net-zero future.

Image of report courtesy of APC

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