Australia has a critical role in the global EV industry
27.2.2024There is enormous growth and opportunity in the global Electric Vehicle (EV) industry and Australia has a critical role to play in the future. According to Clairfield International’s H2 2023 Global Electric Mobility Sector update global EV sales grew 70% in both 2022 and 2023 reaching $US1,573 billion. One of the primary drivers behind this growth in demand? The falling cost of EVs, investment in battery innovation and gains in manufacturing productivity.
Mergers and acquisitions fuel growth
Companies in the sector are looking to secure strong competitive positions in EV manufacturing and in battery technology. This has driven a 3% increase in M&A deal volume in the second half of 2023.
EV manufacturer Stellantis was the most prolific dealmaker, with seven deals ranging from their acquisition of 20% of Chinese EV manufacturer Leap Motor, to a Joint Venture in a battery recycling facility with Orano. Luxor Capital Group LP acquired Volta Trucks Ltd the UK based automotive company specialising in the manufacture of electric trucks. And, Emirate of Abu Dhabi, the UAE based emirate government, is to acquire 15% of NIO Inc, the China-based manufacturer of EVs.
Battery technology and charging infrastructure
The Chinese continue to dominate the EV battery industry. However, strong investment in battery and EV production in Europe and the US is helping companies in these regions become more competitive. This increase in investment is largely driven by aggressive Government incentives and regulatory reform in both regions.
Market analysis indicates continued strong demand for passenger and commercial EV’s globally in the coming years. Cost reduction initiatives include continued R&D in battery technologies, as well investment in production innovation and charging infrastructure. Battery R&D includes a focus on solid state batteries which have many theoretical benefits over existing Lithium-ion. New chemistries such as sodium ion are also a top priority.
Australia’s critical role in the global EV industry
The future of the EV industry is dependent on batteries. Batteries are dependent on the availability of raw materials, something which Australia has in abundance. In fact, more than half of the world’s lithium is already produced in Australia. This presents us with a major opportunity to target global battery manufacturers who require a secure supply of mineral raw materials. To succeed, Australia must focus on proprietary ownership of the methods and capability to locally produce battery-grade raw material.
At the same time, we’ll continue to see a push for greater adoption of EVs in Australia. Like in other countries, the near-term challenge is to supply the infrastructure to support more EVs on the road. This not only includes the charging infrastructure, but clean energy to power it. This need will grow exponentially in the near term. It will require large amounts of capital investment to deploy clean energy generation and distribution infrastructure.
