Global EV Outlook 2022
1 – Maintain and adapt support for electric cars
As the electric car market is maturing, reliance on direct subsidies must decrease and eventually fade out. Budget-neutral feebate programmes – which tax inefficient internal combustion engine vehicles to finance subsidies for low emissions or EVs purchases – can be a useful transition policy tool. EV adoption in most leading EV markets has been promoted by stringent vehicle efficiency and/or CO2 standards. These should be adopted by all countries that seek to speed-up the transition to electromobility.
2 – Kickstart the heavy-duty market
The availability of heavy-duty electric models keeps increasing. Meanwhile electric buses and trucks gain competitiveness on a total-cost-of-ownership basis across more and more applications. To kickstart this sector, more policy-led deployment is needed. For instance, zero emission vehicle sales mandates, purchase incentives and CO2 standards can all contribute to speeding up the transition.
3 – Promote adoption in emerging and developing economies
Two/three-wheelers and urban buses are most cost competitive. Therefore, electrification of road transport in emerging and developing economies should prioritise these types of vehicles. Moreover, price signals and charging infrastructure availability can help the economic case for electrification.
4 – Expand EV infrastructure and smart grids
Until there are enough EVs on the road for an operator to sustain a charging network, governments should continue to support deployment of publicly available charging infrastructure. This can come in the form of regulations requiring the building out of charging stations or through fiscal policies and support.
This way, equitable access to charging for all communities should be ensured, leaving nobody behind in the transition. It is important to incentivise and facilitate the installation of home chargers in existing parking spaces. This can help mandate EV charging readiness for new buildings.
Meanwhile, it is up to local authorities to support the installation of chargers in existing buildings. It is necessary to co-ordinate plans on grid expansion and enhancements. This includes digital technologies to facilitate two-way communication and pricing between EVs and grids, all to ensure that EVs can become a resource for grid stability rather than a challenge.
5- Ensure secure, resilient and sustainable EV supply chains
The electrification of road transport requires a vast amount of raw material inputs. The growing demand for EVs means all stages of the supply chain must scale up. The extraction and processing of minerals needed for the production of batteries is particularly critical due to long lead times.
To help this, governments must leverage private investment in the sustainable mining of key battery metals. Moreover, they needs to ensure clear and rapid permitting procedures to avoid potential supply bottlenecks. Demand pressure and bottlenecks can be avoided by innovation and alternative chemistries that require smaller amounts of critical minerals, as well as extensive battery recycling. Incentivising “right-sizing” of batteries and adopting smaller cars can also decrease the demand for critical metals.
Lastly, in order to facilitate investment, promote environmentally and socially sustainable practices, and encourage knowledge sharing governments, governments should strengthen the cooperation between producer and consumer countries. They should also ensure the traceability of key EV components and monitor the progress of ambitious environmental and social development goals at every stage of battery and EV supply chains.
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