BHP upgrades outlook for electric vehicle penetration

The first 100mn electric vehicles (EVs) on the roads are likely to displace around 1.3mn b/d of oil demand and consume about 600,000 t/yr of copper by around 2030, UK-Australian resources firm BHP said. It now sees 275mn EVs operational by 2035, up by 40mn from its previous outlook.

The predictions are equivalent to about 1.25pc of current global oil demand and 2.5pc of copper demand. EVs are expected to consume around 7pc of the world's electricity by 2050, when they will make up about half the fleet and three quarters of annual sales, according to the central case in BHP's latest economic and commodities review.

BHP's central case still sees EVs making up around 14pc of the light duty fleet and almost 30pc of annual sales by 2035. "However, our low case fleet share for this time horizon is now 7pc, up from 5pc a year ago. Revised projections for the broader fleet mean that a 14pc share in 2035 now means 275mn electric vehicles will be on the road — representing around 40mn additional units than previously expected," it said.

The central case assumes that most vehicle segments will achieve cost competitiveness without subsidies by around 2030, with an inflection point on mainstream adoption around 2025. This is based on a battery chemistry view that assumes current stability and cost issues are resolved, and a nickel-rich lithium-ion 8-1-1 nickel manganese cobalt battery pack ultimately provides the energy density and range characteristics needed to power mass market EV models.

Sales of light duty battery EVs and plug-in hybrids increased by 67pc in 2018 to over 2mn units. EVs' share of total sales increased to 2.3pc from 1.4pc in 2017. Just over half of all EV sales were in China, where consumers rushed to beat a reduction in subsidies.

EV charging availability continues to improve but remains insufficient for mainstream EV adoption, BHP said.

"The first "ultra-fast" chargers have started to come online, but they remain very small in number. To reach a 20-minute, 80pc charging time, they must be matched with a battery with double the normal voltage. Today, vehicles containing such batteries come at a price point that is far removed from "people's car" territory," it said.

The company is accelerating plans to produce 100,000 t/yr of nickel sulphate at its Nickel West unit in Western Australia and is considering a second-stage expansion to around 200,000 t/yr to meet demand from the EV market. This would make the plant the world's largest nickel sulphate producer. Nickel West is already the world's biggest producer of nickel powder and briquettes.