Electric Vehicles - a disruptive force underpinning our commodities - forum targeting 30% - Glencore

Page created by Nancy Lloyd
 
CONTINUE READING
Electric Vehicles - a disruptive force underpinning our commodities - forum targeting 30% - Glencore
Metals and
 minerals

Electric Vehicles – a disruptive
force underpinning our
commodities

             The Electric Vehicle Initiative
             is a multi-government policy

             30%
             forum targeting

             market share for electric
             vehicle sales by 2030

12             Glencore Annual Report 2017
Electric Vehicles - a disruptive force underpinning our commodities - forum targeting 30% - Glencore
Strategic Report     Governance                Financial                  Additional
                                                                          Statements                  Information

The energy and mobility
transformation currently
underway is unlocking
material new sources
of demand for enabling
commodities such as
copper, nickel and cobalt

             The emergence of                           Technological progress
                                                        Rapid advances in technology are
             electric vehicles (EVs)                    emerging across the EV supply chain,
             is set to transform the                    from power generation and storage
             mobility space due to a                    to charging and vehicles.
             combination of factors:                    With technological progress
                                                        comes cost efficiencies, enhanced
             Environmental considerations               performance and ultimately
             Momentum to decarbonise the                products that can compete with
             economy is gathering pace as nations       traditional internal combustion
             increasingly coordinate efforts on this    engine (ICE) alternatives.
             transition. Bloomberg New Energy
             Finance forecasts investment in zero       Industry commentators now expect
             carbon energy at c.$8.7 trillion by        the total cost of ownership (TCO) for
             2040, with an estimated 530 million        EVs to reach parity with ICE vehicles
             electric vehicles on the road.             in the early part of the next decade1.
                                                        1	CRU “Mobility and Energy Futures –
                                                           Perspectives towards 2035”, prepared
             Political mandate                             for Glencore by CRU Consulting.
             A growing consensus, highlighted
             by the Paris Accord and the Electric       Consumer experience
             Vehicle Initiative (EVI), is seeking to    While the EV story is clearly in
             coordinate national and regional           its early days, existing EV models
             policies towards a low carbon future.      and those under development are
             Specifically on transportation, the        already demonstrating performance
             EVI is a multi-government policy           comparable to, or exceeding,
             forum comprising 16 major global           equivalent ICEs.
             economies. The initiative seeks to         Average EV range, acceleration and
             facilitate the global deployment           speed are increasing while targeted
             of 20 million EVs by 2020. A further       charging times and TCO are rapidly
             campaign announced in 2017,                decreasing; all enhancing the
             led by China, targets at least 30%         consumer experience.
             new electric vehicle sales by 2030,
             collectively across all EVI countries.

                                                                      Glencore Annual Report 2017
                                                                                                                    13
Electric Vehicles – a disruptive force
underpinning our commodities
continued

  Driving demand
  Rapid technology advances in battery chemistry, along with strong
  government support, is accelerating the economic breakeven point
  of electric vehicles and building demand for our key commodities

                                                                                            Total cost of ownership – closing the
  Predicted growth in EV sales                                                              economic gap with conventional vehicles

  30%
                                                                                            45,000

                                                                                            42,000
  EV by 2030                                                                                39,000

                                                                                            36,000

                         2020                     2025                  2030                33,000
                         ● ICE 94%                ● ICE 85%             ● ICE 64%
                         ● Hybrid EV 4%           ● Hybrid EV 5%        ● Hybrid EV 6%      30,000
                         ● Battery EV 2%          ● Battery EV 10%      ● Battery EV 30%

                                                                                                        17

                                                                                                        18

                                                                                                        19

                                                                                                        20

                                                                                                        21

                                                                                                       22

                                                                                                       23

                                                                                                        24

                                                                                                       25

                                                                                                        26

                                                                                                        27

                                                                                                        28

                                                                                                       29

                                                                                                       30
                                                                                                     20

                                                                                                     20

                                                                                                     20

                                                                                                     20

                                                                                                     20

                                                                                                     20

                                                                                                     20
                                                                                                     20

                                                                                                     20

                                                                                                     20

                                                                                                     20
                                                                                                     20

                                                                                                     20
                                                                                                     20
                                                                        ● Fuel cell EV 1%

                                                                                                ICE – petrol       BEV without subsidy     BEV with subsidy

  Source: CRU ‘Green Scenario’                                                              Source: CRU

                                                                                            Estimated average metal use per vehicle:
                                                                                             Copper            Nickel        Cobalt
                                 >30% CAGR in battery electric                               84kg              30kg          8kg
                                 vehicle sales to 2030 leads to an
                                 increase in demand for metals                               Cu                Ni            Co
                                                                                            Based on estimated 53kWh
                                                                                            global average battery pack size.
                                                                                            Source: CRU ‘Green Scenario’.

 The impact of this growth in demand for metals has implications across the value chain

  Generation and grid                        Grid storage                              Charging infrastructure                   Non-ICE vehicles
  infrastructure (kt)                        (kt)                                      (kt)                                      (kt)
         2020     2025    2030                       2020    2025    2030                   2020     2025      2030                      2020   2025    2030
  Cu        40     170      536              Cu        24      86     180              Cu     23      115       392              Cu      304    1,068   2,972
                                             Ni        20      71     150                                                        Ni       66     299     985
                                             Co          7     26     55                                                         Co        17     80     259

 Leading to additional metal demand by 2030

  Copper                                              Nickel                                              Cobalt
  4.1Mtpa                                             c.1.1Mtpa                                           314ktpa
  18% of 2017 global supply                           55% of 2017 global supply                           332% of 2017 global supply

14                     Glencore Annual Report 2017
Strategic Report      Governance     Financial                   Additional
                                                                                 Statements                   Information

                                         Potential supply
                                         Glencore is well-positioned to supply
                                         into the energy and mobility evolution

On the cusp of                           Our commodities are crucial
mainstream EV roll-out                   to the electric vehicle (EV) story
The rate at which automotive and         The energy and mobility              We are uniquely positioned with
battery companies have scaled up         transformation currently underway    our commodity mix, having strong
electric vehicle investment plans        is forecast to unlock material new   production growth across these
speaks to our opportunity as a           sources of demand for enabling       three core EV metals over the
supplier of key metals.                  underlying commodities including     next three years.
                                         copper, nickel and cobalt.
Global automaker investment now
totals over $90 billion, with at least
$19 billion attributed to the U.S.,
$21 billion to China and $52 billion
to Germany.                              Glencore own source copper           Glencore own source nickel
Volkswagen alone plans to
spend $40 billion by 2030 to
build electrified versions of over
                                         25% growth                           30% growth
300 models. Chinese automakers           in production to 2020                in production to 2020
are ramping up focus on the
EV story, while a number                                      1.6Mt                                         142kt
have announced investment                     1.3Mt                                109kt
partnerships with the likes
of Ford, VW and General Motors.
Global planned and existing
battery cell production capacity
amounts to over 300GWh, which
compares to Tesla’s Gigafactory                2017              2020               2017                    2020

target capacity of 35GWh. China
accounts for approximately
two-thirds of the total.
                                         Glencore own source cobalt
How much metal is required?
To illustrate the demand
potential for a number of our key        133% growth
commodities, we commissioned             in production to 2020
CRU to model the metal
requirements across the supply                                63kt
chain to achieve the EVI target
of 30% EV market share by 2030.
Unsurprisingly the forecast metal             27kt
requirements are significant,
as early as 2020.
An additional c.4.1Mt of copper
                                               2017              2020
(18% of 2017 supply), c.1.1Mt of
nickel (55% of 2017 supply) and
314kt of cobalt (332% of 2017
supply) will be required to
enable 30M EV sales by 2030.
.

                                                                              Glencore Annual Report 2017
                                                                                                                            15
You can also read