南非新能源汽車路線圖

SOUTHAFRICA’SNEWENERGYVEHICLEROADMAP

THOUGHTLEADERSHIPDISCUSSIONDOCUMENT

THEROUTETOTHEWHITEPAPER

Monday,February20,2023

SOUTHAFRICA’SNEWENERGYVEHICLEROADMAPTHOUGHTLEADERSHIPDISCUSSIONDOCUMENTTHEROUTETOTHEWHITEPAPER

TABLEOFCONTENTS

ExecutiveSummary 2

Whydecarbonisingroadtransportismissioncritical 2

Thegrandchallengeofthetwenty-firstcentury 3

Theautoindustrypolicyproposals 4

ThePathtoNewEnergyVehicles[NEVs] 7

GlobalClimateChangeCommitments 12

SouthAfrica’sJustTransition 19

Environmental,SocialandGovernanceMetrics 26

TheSouthAfricanAutomotiveIndustryinperspective 29

AutomotivePolicyEvolution 29

MIDPandAPDP 30

6.3.SAAM2021-2035

SouthAfricanAutomotiveIndustryKeyPerformanceIndicators 31

SouthAfricanNewVehicleandNEVLandscape 33

AutomotiveExportsandRelevanceoftheEU 37

GlobalAutomotiveEnvironmentandTrends 44

GlobalVehicleProduction 44

GlobalNewVehicleSales 46

GlobalNEVLandscape 48

NEVEcosystem 53

ChargingInfrastructure 55

NEVTransitionalRequirements 58

NEVPurchasingSubsidy 62

AlignmentofSADC-EUEPANEVduties 65

LocalisationofNEVComponents 68

NEVInvestmentProjects 71

Conclusion 74

EXECUTIVESUMMARY

OnNovember12,2021,theCOP26JointDeclaration[orGlasgowClimatePact]establishedthegoalofachievingcarbonneutralityby2050.ThisglobalcommitmentwasreaffirmedagainatCOP27heldfrom06Novemberto20November2022inSharmElSheikh,Egypt.TheSouthAfricanautomotiveindustryanditssocialandbusinesspartnersappreciatetheimportanceofthisgoalandareworkingdiligentlytocontributetothedecarbonisationofroadtransportinsupportofthisbroaderobjective.Wealsorecognisethatnosinglegovernmentpolicyorindustrycommitmentalonewillachievethisambitiousgoal.Wemustworkcollaboratively-atalllevelsofgovernmentandacrossalleconomicsectors-toidentifytherangeofapproachesnecessarytoestablishsustainablepathwaystocarbonneutralityacrosssectorsandtheuniquecircumstancesoftheSouthAfricaneconomiclandscape.

Whydecarbonisingroadtransportismissioncritical

Theautoindustryunderstandstheimportantroleitplaysindecarbonisingroadtransportasawaytohelpachievethisbroadergoal.AccordingtotheInternationalEnergyAgency[IEA],transportasawholecontributedin2020to37%oftheglobalCO2emissionsfromend-usesectors,whileroadtransport[cars,trucksandbuses]accountedfor76%ofthetotaltransportsector.Asaresult,28%oftheglobalCO2emissionis,accordingtotheIEA,attributedtotheroadtransportsector.

Inourcountry,theSouthAfricanNationalGreenhouseGasInventoryconfirmsthatTransporthasbeenidentifiedasthefastestgrowingsourceofgreenhousegasemissions,accountingforaround10,8%ofNationalGHGemissions.Aviationemissionsaccountsfor5%;Maritime2,2%;Rail1,6%;anddirectemissionsfromtheroadsector,accountsfor91,2%,mainlyfromthecombustionofpetrolanddiesel.Ourcountry’sGreenTransportStrategyunderthestewardshipoftheDepartmentofTransportconfirmsthatSouthAfrica’svisionistosubstantiallyreduceGreenHouseGasEmissionsandotherenvironmentalimpactfromtransportationby5%in2050.

Tothisend,theautomotiveindustryisplanningtoinvest$515billiongloballyby2030tohelpfacilitatethetransitiontoaNewEnergyVehicle[NEVs]future[includingbattery,plug-inhybridandfuelcellelectricvehicles],whilesimultaneouslycontinuingtoinnovateonthebroadarrayofpowertraintechnologiesnecessarytomeetthebroadanddiverseneedsofaglobalmarket.Thisincludes,forexample,internalcombustionengines[ICE]withcarbonneutralfuels.

Whilethelong-termtrajectorycertainlyembracesashifttowardelectrification,theindustryrecognises,atpresent,nosingletechnologyiscapableofachievingcarbonneutralityacrosstheglobalautomotiveindustry.SouthAfricaneedstheflexibilitytoadoptmultipletechnologiesandpoliciesbestsuitedtoitsuniquesocio-economicrealities:includingcurrentpressurestothenationalfiscus;ourgeographicallocation;persistentsocio-economicchallenges;sloweconomicgrowthtrajectory;andgeopoliticalconsiderationswithintheregionandacrosstheAfricancontinent.Technologyneutralandmultipleapproachesprovidemorepracticalandsustainablepathwaystocarbonneutrality.

Theautoindustrytherefore,advocatesforandencouragesacollectiveembraceofthefollowingnationallyestablishedprinciples:

thatasweworktowardscarbonneutralityandrapidreductionofcarbonemissions,electrificationwillplayaleadingrole.Thistransitiontoelectrification,however,willrequireacomprehensiveplanthattakesthepresentmarketrealitiesintoconsideration,aswellastheon-goinginvestmentandinnovationinnewerICEtechnologiesandlowcarbonfuels;

SouthAfricaworkingwithallitssocialandbusinesspartnersshouldproceedtowardstheachievementofcarbonneutralitybyimplementingpracticalandsustainabletechnologicalandpolicymeasurestailoredtoourspecificcircumstancesasacountryandnotuseashotgunorcutandpasteapproachtoournationalsolutions;and

againstthebackdropofourcountry’scurrentandpersistentenergychallenges,itisessentialalsoforourindustrytopursueandachieveautomotivecarbonneutralitythroughcomprehensivenationalindustrialandenergypoliciesthateffectivelypromotethecompetitivenessoftheautosector.

Thegrandchallengeofthetwenty-firstcentury

Climatechangeisthemostpressinggrandchallengeofthetwenty-firstcentury.Thescienceisclearthatglobalwarmingmustbekeptbelow1.5°Ctoavoidtheworstofclimateimpacts.Todoso,greenhousegas[GHG]emissionsmustbereduceddramaticallyoverthenextthreedecadestoreachnetzeroemissionsby2050.SincetransportationisamajorcontributortoCO2emissionsglobally,changesintechnologyarethereforeatthecoreofthetransitiontothevehicleofthefuture,whichisprimarilylinkedtoelectricasfaraspassengercarsandlightcommercialvehiclesareconcerned.Governmentsacrosstheworldhavebeenincreasinglyintroducingpoliciesorstrengtheningexistingpoliciestoensureanuptakeinnewenergyvehicle[NEV]purchasesineffortstoreducecarbonemissions.

TheSouthAfricanautomotiveindustrywillhavetoadapttothecurrentrapidtechnologicaltransitiontoNEVstomaintainandfurthergrowitsautomotivemanufacturingambitions.Asvehicleemissionsregulationstightenglobally,withassociatedcosts,theshiftistowardseco-friendlyvehicles,whichwillbethefuturedrivingtechnologyadoptedbytheglobalautomotiveindustry.ThedemandforNEVsisdrivenlargelybygovernmentincentivesandtheimperativetocombatclimatechangeinregionssuchastheEuropeanUnion-thedomesticautomotiveindustry’stopexportregion,whichaimstobecomeazero-carboneconomyby2035.

Since2020,developmentsinthedomesticautomotiveindustry’skeyexportmarketscontributedtoenhancethepaceoftheNEVlandscapeinSouthAfricathroughgovernment’seffortstogreentheeconomyandtopositionSouthAfricaasacentreforadvancedgreenmanufacturing.In2021,SouthAfricanpassengercarandlightcommercialvehicleexportsaccountedforasignificant63,1%oftotallightvehicleproduction.

Europedominatedasaregion,accountingfor77,1%ofthetotal,ornearlyfouroutofeveryfivevehiclesexported.Asanexport-orientedindustryandinordernottoloseexportstoitskeymarkets,thetechnologicaltransitionshifttoNEVsisthereforeinevitable.However,vehicleexportstothedomesticautomotiveindustry’stopexportdestinations,theUK,andtheEU,aresubjecttostrictRulesofOriginrequiring60%localcontentinavehicletoensureduty-freeaccess.WithoutbatterymanufacturinginSouthAfricaortheUKandtheEU,flexibilityinthestrictRulesofOriginrequirementswouldbeimperativeforongoingduty-freemarketaccess.

FortheSouthAfricanautomotiveindustry,supportwouldberequiredforthetransitiontoNEVsinlinewiththeobjectivesoftheSouthAfricanAutomotiveMasterplan[SAAM]2021-2035.Aspartoftherecommendationsofthejointlyfundednaamsa-DTICNEVResearchStudy,NEVsalestargetsof20%ofthetotalby2025,40%by2030and60%by2035havebeensetlinkedtoappropriatesupporttostimulatedemandforNEVsaswellasthemanufactureNEVsandNEVcomponentsinthecountry.Globally,NEVsaleshavebeenparticularlyimpressiveoverthelastthreeyears,evenasCOVID-19shrankthemarketforconventionalcarsandasmanufacturersstartedgrapplingwithsupply-chainbottlenecks.

Thenetgrowthinglobalcarsalesin2021camefromNEVs.In2021,NEVsalesmorethandoubledto6,6million,representing11,7%oftheglobalpassengercarmarket,andmorethantriplingtheirmarketsharefromtwoyearsearlier.Chinaaccountedformorethanhalfofallelectriccarssold,butthere’salsostronggrowthinEuropeandtheUS.Globally,OEMsareacceleratingtheirNEVlaunchplans,partlytocomplywithincreasinglystringentregulationsinEuropeandChina,alongwitharaftofnewmodellaunchesandgovernment-sponsoredincentives.BEVsuselithium-ionbatteriestopowertheiroperationandreleasenogreenhousegasemissionsandarelessharmfultotheenvironmentwhentheyarechargedusingelectricitygeneratedfromrenewablesources.

Theautoindustrypolicyproposals

On18May2021,theDTICpublishedaGreenPaperontheadvancementofnewenergyvehiclesinSouthAfrica.TheaimoftheGreenPaperwastoestablishaclearpolicyfoundationtocoordinatealong-termstrategytopositionSouthAfricaattheforefrontofadvancedvehicleandvehiclecomponentmanufacturing,complementedbyaconsumptionleg.TheGreenPaperhighlightedthattheNEVchallengeinSouthAfricawastwodimensional,encompassingbothdemandandsupplysideconsiderations,andthatitisaninevitabletransitionfortheSouthAfricanautomotiveindustryintheglobalracetotransitionfromtheinternalcombustionengine[ICE]era,intoelectro-mobilitysolutionsandtechnologies.

DrivingameaningfulNEVtransitioninSouthAfricawillrequireacarefulbalancebetweenincentivisingasustainedshiftindomesticmarketdemandtoNEVs;establishinganappropriatelyaligned,renewableenergy-basedcharginginfrastructure;andsupportingashiftinSouthAfricanvehicleproduction,awayfromICEvehiclestoamixofhybridelectricvehicles[HEVs],plug-inhybridelectricvehicles[PHEVs],andbatteryelectricvehicles[BEVs].

BalancingthesefactorsiskeytosuccessfullytransitioningtheSouthAfricanvehicleindustrytoanultra-lowcarbonfuture,whilesimultaneouslyensuringitremainsamajorcontributortotheindustrialdevelopmentofthedomesticeconomy,aspertheobjectivesoftheSAAM,whichrunsuntil2035.WhileexistingpoliciesaroundtheworldsuggesthealthygrowthofNEVs,inSouthAfrica,numerouschallengeshamperthecountryfromprogressingintheNEVmarket.Theseincludesupportiveregulatoryframeworks,additionalincentivestomanufactureNEVsandNEVcomponentsaswellastoaddressthecostsofNEVs,andinsufficientpublicchargingstationsacrossthecountry.

Whatisimperativeforthedomesticautomotiveindustry’stransitiontoNEVsisurgencyandclaritywithregardstoasupportiveregulatoryframeworkintheformofincentivestoaddressthepricedifferentialbetweenNEVsandICEvehicles,additionalincentivestomanufactureNEVsandNEVcomponents,aswellastherolloutofpublicchargingstationsacrossthecountry.HowtheSouthAfricangovernmentsupportstheindustryanditscomplexvaluechaintomakethistransitionisrepletewithchallenges,themostnotableofwhichisthemajorcostassociatedwithtransitioningtotheconsumptionandproductionofmoreexpensivevehicles-atleastforaperiod,anduntilbatterytechnologiesadvancetolevelsthatsecuretheirpriceparitywithequivalentICEproducts.

TosupportthetransitionoftheSouthAfricanautomotiveindustrytoanNEVdominatedmarket,whilecontinuingtodevelopthelocalindustryinalignmentwiththeobjectivesoftheSAAM,theautomotiveindustryrecommendsthefollowinginterventionsforGovernment’sconsideration:

commitmenttoreduceCO2emissionsacrosstheentireautovaluechainsassoonasitispracticallypossible.AlthoughNEVsdonotemitCO2whileinuse,CO2isemittedduringthemanufacture,distribution,recyclinganddisposalprocess.CarbonneutralityformotorvehiclescannotbeachievedwithoutCO2emissionsreductionsthroughouttheirlifecycle,basedonoveralllife-cycleassessment;

ensurethatthemanufacturingbaseinSAisprotected,strengthenedandretained,giventhatthecountryisatriskoflosingmorethan50%ofits’productionvolumefromJuly2025[instructionofEuro7emissionregulationsinEurope]to2035[banningofICEdrivetrainsinalmostalltheEuropeancountries];

introductionofNEVpurchasingsubsidiesbasedonGovernment’sabilitytosupportthesuiteofpolicyoptionsforthepurchaseofHEV,PHEV,andBEVs;

alignmentonNEVimporttariffsfromtheEUandtheUKfrom25%to18%undertheSADCEUEPAandSACUMEUEPAalongwithmoreflexibleRulesofOriginforexportstotheEUandtheUK;

provisionofa50%CKDrebateontheimportofspecifiedNEVcomponentsforalimitedperiod;and

anincreaseintheAISforNEVinvestmentfrom30%forOEMsand35%forcomponentsuppliersto50%andexpandtheAISofferingforNEVinvestmenttolowertiersuppliers,includingsuppliersthatconductrawmaterialbeneficiation.

IncreasedlevelsofPIandVALAforatransitionaryperiodtogetNEVinvestmentintoSAandsupportexportcompetitivenesswhiletheeconomiesofscalearelow.

Inadditiontotheabove,theindustryispreparedtomatchthepurchasingsubsidyfromgovernmentforthedifferentNEVcategoriesinordertonarrowthepricedifferentialbetweenNEVsandICEvehiclesfurthertostimulateanacceleratedoff-takeofNEVsinthecountry.

ItisalsoimperativethattheRulesofOriginforCBUexportstotheUK/EU,whichcurrentlystandat60%,bereducedviatheSADC-EUEPAreviewtoaccommodatethelackofareallocalisationopportunityforthebatteryintheforeseeablefutureinSouthAfricaandtheEU/UK.FailingtodosowoulddefeatoftheNEVtransitioninSouthAfricaaswithouttheNEVbatterysourcinginSouthAfricaortheEU/UK,thedomesticautomotiveindustrywillnotbeabletoexportpassengercarsandlightcommercialvehiclesduty-freetotheEU/UK.ThelongtermNEVpolicyinthecountryshouldbelinkedtothetimeframeoftheSAAM2035andthetargetof60%ofthenewvehiclemarkettocompriseNEVsalesby2035shouldbesubjecttoappropriategovernmentsupportlevels.

TheaimoftheWhitePaperistoprovideacomprehensiveandlong-termautomotiveindustrytransformationplanonNEVsforSouthAfricainlinewiththeSAAM2035timeline.ThefocusoftheWhitePaperisonpassengercarsandlightcommercialvehicleseligibleundertheAutomotiveProductionDevelopmentProgrammePhase2[APDP2].Inviewofthesignificantdifferencesbetweenthetransitionalrequirementsforlightvehiclesandheavycommercialvehicles,aNEVRoadMapfortrucks,buseswillbedevelopedseparately.

Nosinglegovernmentpolicyorindustrycommitmentwillachievetheambitiousgoalofcarbonneutralityby2050.Wemustworkcollaboratively,atalllevelsofgovernmentandacrossallindustries,toidentifythesuiteofapproachesnecessarytoestablishsustainablepathwaystocarbonneutralityacrosssectorsthatrecogniseandtakeintoaccounttheeconomic,geographicandculturalrealitiesofSouthAfrica.

Theautomotiveindustryremainscommittedtosupportingcarbonneutralityasarguedinthispaper.Webelieveelectrificationwillplayaleadingroleinthistransitionbutitisnottheonlyand/orthemostappropriatetechnologyforourcountryforimmediateimplementation.OthertechnologiesorfuelsarealsosuitableandSouthAfricashouldproceedtowardstheachievementofcarbonneutralitybyimplementingpracticalandsustainabletechnologicalandpolicymeasurestailoredtoourspecificcircumstances.Finally,essentialtoachievingautomotivecarbonneutralityarecomprehensivenationalindustrialandenergypoliciesthateffectivelypromotethecompetitivenessoftheautomobileindustry.

THEPATHTONEWENERGYVEHICLES[NEVs]

Inmanyofthelargestautomotivemarkets,widespreadconsumerandcommercialadoptionofNEVsisimportantforachievinggoalsoflong-termcarbonneutralityfromthetransportationsector.Tothatend,motorvehiclemanufacturersareworkingtowardgreenhousegasreductionsbyincreasingthenumberofNEVsandalternativefuelvehiclesontheroad,andwithongoingefficiencyimprovementsforICEvehicles.Asaresult,theworldisonthecuspofachievingaremarkablemilestoneof20millionNEVsontheroad,upfromjustonemillionin2016.Tofurtherillustratethepaceofthistransition,salesofNEVs[includingfullyelectricandplug-inhybrids]doubledin2021toanewrecordof6.6million.

Despiteglobalsupplychainchallenges,saleskeptrisinginto2022,with2millionNEVssoldworldwideinthefirstquarter,upbythree-quartersfromthesameperiodayearearlier.ThenumberofNEVsontheworld’sroadsbytheendof2021wasabout16.5million,tripletheamountin2018.Notwithstandingthistremendousprogressandbuildingmomentum,NEVsstillrepresentonlyafractionofthemorethan

billionvehiclesontheroadworldwide.Likewise,theincreasingpaceofNEVsalesarenotthesameineverycountryaroundtheworld.

326,990

322,043

153,699

141,615

138,771

119,402

97,282

469,930

313,129

695,657

631,152

3,519,054

ChinaGermany

U.S.UK

France

Norway

ItalySweden

SouthKorea

NetherlandsRestofEurope

RestoftheWorld

EVSALESBYCOUNTRY,2021

EVMARKETSHAREBYCOUNTRY,2021

MarketShare WorldAverage

100

90

80

70

60

50

40

30

20

10

0

MarketShare(percent)

NorwayIcelandSwedenDenmarkFinlandNetherlandsGermanySwitzerlandPortugal

United…FranceBelgium

ChinaItalySpainGreeceCanadaKorea

OtherEurope

USA

NewZealand

AustraliaPolandJapanMexicoBrazilIndiaChile

SouthAfrica

Source:GovindBHUTADA,“Visualizing10YearsofGlobalEVSalesbyCountry,”2022-08-08

InordertomaximiseNEVacceptanceandadoption,policymakersandindustryinvestmentsmustfocusonimprovingvehicleaffordability,increasingconsumerawarenessandconfidence,developing

vitalchargingandrefuellinginfrastructure,andbuildingreliableandresilientsupplychainstosupportthemanufactureofNEVs.

Electricalchargingandhydrogenfuellinginfrastructure:Allstakeholdersmustworktogetheronpublicpolicyefforts,suchasincentives,grants,rebatesandothermechanisms,alongwithprivateinvestment,tospursignificantelectricchargingandhydrogenrefuellinginfrastructuredevelopmenttosupportthreekeyareas:homes[especiallymulti-unitdwellingsandareaswithhigherresidentialdensities],workplacesandhighwayandotherpubliclocations,withanemphasisonthoselackingpublictransport.

Existingresearchshowschargingneedswillvarysubstantiallybycountryandregion,housingstock,averagedistancetravelled,populationdensityandNEVmix.Forexample,homechargingiscurrentlythemostimportantchargingoptioninmostcountriesandwillremainacriticaloptionwheredemographicssupporthomecharging.Othercountriesandregions,however,mayhavelowerpotentialforhomecharging,increasingtheimportanceofpublicandworkplacecharging.

NUMBEROFPUBLICLYAVAILABLEELECTRICVEHICLECHARGERS(EVSE)IN2021,BYMAJORCOUNTRYANDTYPE

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

SlowCharging(<22KilowattsofPower)

FastCharging(>22KilowattsofPower)

SouthAfricawillhavedifferentdemandsforDCfastchargingmainlyduetoitsenergychallenges,socio-economicdemographicsandotherlocal-specificfactors.WeknowthatthereisnosetplaybookforoptimisingcharginginfrastructureandSouthAfricawillmakeitschoicesbasedonthecountry’snationalinterestsandneeds.Regardless,achievingtherightcharginginfrastructuremixwillrequireamassiveandcoordinatedinvestmentbetweenthepublicandprivatesectors.

ConsumerAcceptanceandAdoption:WhileSouthAfricamayelectagradualphasedinapproachafterprioritisingamanufacturingledstrategytoNEVevolution,governmentincentiveswillundoubtedlybeessentialtostimulatedemandandencourageconsumerstoreplacetheirICEvehicleswithNEVmodels.Duetohigherlevelsofinequalityinoursociety,highunemploymentrateandpoverty,thecompletereplacementoftheexistingfleetsofvehiclesinSouthAfricawilltakedecades,ifnotlonger[aminimumof15to20yearsifnotmore].Inordertoacceleratethisprocess-especiallyasnew,moreexpensivetechnologiesscaleandmature-incentiveswillbenecessaryinordertoatleastpartlyoffsettheadditionalcosttotheconsumer.Otherwise,ifconsumersareforcedtokeeptheiroldervehicleslongerthantheyshould,theneteffectofNEVintroductionwillbenegative.

Whiletheautosectorhasmadesignificantprogressdrivingdownbatteryandfuelcellcosts,furtherresearchanddevelopment[R&D]investmentswillbeneededtorealisecost,utility,andconvenienceparitybetweenNEVsandtheirinternalcombustioncounterparts.NEVscurrentlycostsignificantlymoretoproducethanequivalentgasolinecarsortrucks.Thisdividegrowswhenconsideringconvenienceandutilityparity,whichrequireslargerbatteriestosupportlongerNEVrangescommensuratewithconsumerexpectationsandneeds.

EVnicheOEMs

Chinesesuppliers

Globallyoperatingsuppliers

ChineseOEMs

GloballyoperatingOEMs

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

ELECTRICVEHICLES:AUTOINDUSTRYR&DFUNDINGBYINVESTORTYPE2023(BILLIONS)

Billions(US$)

R&D:ToincreaseNEVmarketshare,thefocusshouldnotbesimplyonstrengtheningfuel-efficiencyandotherregulations.ThesemustbecomplementedbyadditionalgovernmentpoliciesthatfacilitatethetransitiontoaNEVfuture,includingsupportforcriticalR&D.Globally,automakershavealreadycommitted$255billiontoNEVR&Dactivitiesin2023.

InordertoincreaseNEVpenetrationandprovideNEVownersthesamecostbenefitsasthoseprovidedbyICE,governmentsmustcontinuetoworkproactivelywithindustrytoidentifyandsupportcriticalR&Dopportunitiestoenhanceourlocalisationambitionsandsecurestableaccesstocriticalcomponentsandsupplychainsforlocalcomponentmanufacturing.

MineralExtractionandSupplyChain:Sub-SaharanAfricaandSouthernAfricainparticularisendowedwithenormousandrichmineralresourcesweneedintheproductionofLithiumBatteryTechnology.IfwewanttoMakeSouthAfricaAttractivetoglobalandlocalbatteryassemblers,weneedtoincludeabeneficiationstrategyinourmixsothatwedonotjustextractbutwedevelopourownmegafactoriesthatwouldsupplyproductstotheworld.Ourregionisreadyandwehavethefollowingmineralresourcesaroundus:

Nickel|SA[the9thlargestglobalproducer]andsomeinZimbabwe;

Manganese|SA[70%oftheworld’smanganesereserves],someinDRCandGabon;

Cobalt|DRC[>60%ofworldsupply,85%isexportedtoChina],andsomefromZambia;

Lithium|Zimbabwe[5thlargestproducingcountry],someinSA,andinNamibia;

Graphite|Mozambique[20-40%:globalreserves],someinTanzania,Zimbabwe,Madagascar;

Copper|SA,theDRC,Namibia,Zambia,andZimbabwe.

Realisingwide-scaleadoptionofelectricvehicleswillrequireasubstantialincreaseintheidentificationandresponsibleextractionofresourcescriticaltothebatterysupplychain,aswellasbatteryend-of-lifepoliciesthatminimiseenvironmentalharmandsupportrobustandresilientsupplychainsforbatterymaterials.

DemandforNEVbatterieswillincreasefromwhatwehavetodaytoover9,300GWhby2030.Thiswillapplytremendouspressureonexistingsupplychainsforcriticalminerals,componentsandmaterials.Forexample,someestimatessuggestthatglobaldemandforlithiumfrombatteryfactoriescouldhit3milliontonnesby2030,requiringamassiveincreaseoverthe82,000tonnesproducedin2020.BenchmarkMineralsIntelligenceestimatesthatover300newminesforgraphite,lithium,nickelandcobaltwillneedtobebuiltoverthenextdecadetomeetNEVandenergystoragebatterydemands.Asaresultofsurgingdemandandtightsupplychains,pricesofrawmaterialssuchascobalt,lithiumandnickelwillcontinuetosurge.InMay2022,lithiumpriceswereoverseventimeshigherthanatthestartof2021.

GeographicalDistributionoftheGlobalNEVBatterySupplyChain

FuelCell:Inadditiontobatteryandplug-inelectricvehicles,hydrogenfuelcellelectricvehiclesrepresentanimportanttechnologyonthepathtodecarbonisingroadtransportation.Thisisparticularlyimportantforheavydutyvehicles,wherebatterytechnologymaypresentchallengesrelatedtoweight,cost,chargingandrange.

Forfuelcellelectricvehicles[FCEVs]hydrogenshouldbepricedataffordablelevels,andhydrogenfuelsmademoreconvenientlyav