Charging the clean transition with electric vehicles
The effects of climate change means industries must change the way they think
The impact of climate change is becoming increasingly threatening, demanding that organisations innovate and accelerate towards a more sustainable future. Based on the current global rate of carbon emissions, there’s a 50% chance the world will exceed the 1.5°C warming threshold by the end of 2029 (1).
In the automotive industry, transitioning towards cleantech comes with pressing challenges
As the automotive industry pushes towards electric vehicle (EV) manufacturing, there are multiple challenges to be considerate of such as vehicle purchase costs and the scarcity of charging stations across many countries. Significant infrastructure changes are needed to make owning an electric vehicle convenient (12). There are also comparatively few professional EV technicians compared to traditional mechanics, who may have worked in their trade for decades.
The mining and metals industry produces 12% of global emissions, but these materials are needed for a successful cleantech transition (13). Sustainable mining is essential in manufacturing electric vehicles, with copper, graphite, and lithium just some critical metals needed for a cleantech-based future.
Organisations are focused on building a sustainable future through partnerships and new supply chains
2023 has already seen governments embracing clean energy supply chains, building relationships with foreign investors, and seeking local partners to develop new facilities.
Asian battery manufacturers are partnering with US original equipment manufacturers (OEMs) to expand their production in the States. At the same time, Indonesia plans to establish an onshore electric vehicle supply chain instead of exporting raw battery materials (1).
As organisations continue to focus their attention on the global cleantech sector, we’re seeing increasing renewable-energy installations in emerging markets and the adoption of electronic vehicles unlocking new routes to net zero over the short to medium term (2).
The States are driving the cleantech transition
By taking critical steps, like rejoining the Paris Agreement at the start of 2021 and looking to decarbonise its electricity sector by 2035, the US has shown a willingness to lead the global climate change agenda. These changes signify the growing importance of cleantech, with solar, wind, battery, and electric vehicle sectors presented with new opportunities (3).
However, prices of raw materials, including steel and copper, have risen in recent years, threatening to drive the costs of renewable technologies upwards (4). Electric vehicles and charging stations account for significant global copper consumption. Moving towards a net-zero future means demand will only increase, and prices will rise further. Inflation in new project costs threatens to slow the clean energy transition.
But the EU is a rapidly emerging market
Keeping global warming to 1.5°C as per the 2015 Paris Agreement means reaching net zero carbon dioxide emissions globally by 2050 (5). The increasing presence of net zero targets in the global economy is remarkable, including long-term goals aligned with the latest science.
Many examples of this ambition are emerging in the EU, which outlined its carbon-neutral targets as an economy with net zero greenhouse gas emissions in early 2020 before upgrading its 2030 target later that year (6,7).
Electric vehicle production is continuing to increase in the US, EU, and UK markets
The US, EU and UK are leading the charge regarding the production of electric vehicles, with markets snowballing in recent years and momentum due to continue over the coming decade. Forecasts show electric vehicle sales in the US could reach 40% of total car sales by 2030, with some projections suggesting sales could surpass 50% (8,9).
Meanwhile, in 2022 there has been considerable progress in the sales of electric cars and vans in the EU-27, with 21.6% of new car registrations being electric vehicles (10). Electric van uptake has also increased, with battery-electric vehicles accounting for the majority of electric van registrations in 2022 (10).
The UK government made its 2050 net zero commitment law in 2019, banning the sale of new petrol and diesel cars by 2030 as one measure to stay on track (11). This historic step came as part of plans to accelerate a greener transport future, phasing out non-re0newable fuels in favour of zero-emission vehicles and putting the UK on course to be the fastest G7 country to decarbonise cars and vans. In September 2023, it delayed the decision by five years, stalling the nation’s green policy progress and demonstrating the challenges faced by businesses and consumers (12). The revised deadline will allow UK citizens to buy petrol and diesel cars until 2035, yet it states that battery-powered vehicles will make up 80% of sales by 2030.
How we support clients in cleantech
The transport sector is one of the most significant contributors to greenhouse gas emissions globally, so transitioning to cleaner energy sources is crucial in global cleantech efforts. Decarbonisation strategies and new business models are vital to driving this industry change, with the worldwide consensus that industries must eliminate greenhouse gas emissions unlocking new partnerships, projects, and possibilities.
Standard Chartered wants to be at the heart of the transition, enabling companies to reduce emissions by embracing cleaner power and more sustainable activities. Discover opportunities for your business and explore our perspectives on global cleantech trends in our news and views features.
References
- https://www.sc.com/en/feature/five-cleantech-trends-for-2023/
- https://perspectives.sc.com/story/industriesintransition-ed-3/page/20/1
- https://perspectives.sc.com/story/industriesintransition-ed-3/page/20/2
- https://perspectives.sc.com/story/industriesintransition-ed-3/page/21/7
- https://ca1-eci.edcdn.com/reports/ECIU-Oxford_Taking_Stock.pdf
- https://climate.ec.europa.eu/eu-action/climate-strategies-targets/2050-long-term-strategy_en
- https://www.bbc.co.uk/news/world-europe-55273004
- https://www.spglobal.com/mobility/en/research-analysis/ev-chargers-how-many-do-we-need.html
- https://kpmg.com/xx/en/home/insights/2021/11/global-automotive-executive-survey-2021.html
- https://www.eea.europa.eu/en/analysis/indicators/new-registrations-of-electric-vehicles
- https://www.gov.uk/government/news/government-takes-historic-step-towards-net-zero-with-end-of-sale-of-new-petrol-and-diesel-cars-by-2030
- https://evchargingsummit.com/blog/challenges-facing-the-ev-industry-today/
- https://alphagridinfographics.com/stchartered-delivering-transition/ft.html