19.10.2011
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Electric cars

Deutsche Bank study on e-mobility

Germany's largest bank believes that electric cars have a chance – and also that it makes no difference overall how the electricity they run on is generated.

 - Deutsche Bank finds that we will need a lot more electric cars if we want to store excess wind power. Source: Deutsche Bank
Deutsche Bank finds that we will need a lot more electric cars if we want to store excess wind power. Source: Deutsche Bank

The 28-page study (PDF) contains a number of interesting findings. For instance, because there are so many diesel cars in the EU and a barrel of oil produces only a certain amount of diesel and a certain amount of gasoline, the EU currently has to import diesel – and can actually export gasoline, such as to the United States, which was the main buyer in 2008. And because electric vehicles will more likely replace small gasoline-powered cars than large diesel-powered trucks, this situation will only worsen.

The long-term supply of lithium is not much of a problem – the bank estimates reserves at more than 500 years – but lithium reserves are not equally distributed across the globe, with the big three countries being Chile, Bolivia, and China. Lithium also brings us to the main issue – cost. Deutsche Bank believes that the geographic concentration of the resource could lead to market concentration, and hence to higher than necessary prices.

Copper is another crucial raw material for electric cars, and here Chile is once again a major player with a global market share of 34 percent. But copper can be recycled, and indeed Germany already recycles half of its copper, a figure that is expected to increase to 70 percent by the end of this decade. On the other hand, the price of copper has skyrocketed over the past 10 years and will probably not drop.

Deutsche Bank believes that batteries overall have to be made not only cheaper, but also more reliable, lasting "for 15 calendar years or 300,000 kilometers before falling below" the benchmark. Current batteries have only around a third of that range.

Overall, the bank seems cautiously optimistic that electric vehicles will become popular and replace some of our transportation needs, especially over short ranges, but the bankers also list a number of technical and financial obstacles. (Craig Morris).

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