UBS recently stripped down a Chevy Bolt, the 'first real mass-segment EV', to answer key questions about the EV segment’s future, and resulting implications across the supply chain, including some notably bullish calls on key raw commodities.
In this extensive report, they ask the following six key questions:
- How are global commodities markets influenced by the shift to EVs?
- When will EVs reach consumer cost parity, and what will be the impact on EV sales?
- What is the impact on the auto industry?
- What is different in an EV like the Chevy Bolt, compared to an equivalent ICE car?
- How profitable are EVs like the Bolt and the upcoming Tesla Model 3?
- How much more electronics and semiconductor content is in an EV, and who is set to benefit?
UBS writes: “We are more convinced than ever that electric cars are about to reach the tipping point in the penetration curve in the next few years. This new generation of electric cars has far-reaching implications for the global autos industry, but also for many other sectors, such as capital goods, chemicals, mining, technology, and energy.
“The only way to better understand these implications was to tear down the first vehicle of its kind, piece by piece. So, that is what we did. We tore down the Chevrolet Bolt, which we consider the world's first real mass-segment electric vehicle (EV). The Bolt combines a $37k price tag ($30k including US government subsidies) with an EPA-estimated range of 238 miles on a single charge, which surpasses competitors by at least 30% in this price segment. Moreover, the Bolt has a price tag and range similar to the upcoming Tesla Model 3, which is Tesla's long-awaited entry into the mass market.
On 'battery active materials' they point out that a wholesale move into EV's would result in an order-of-magnitude step-change in demand for cobalt and lithium.
"Commodity markets in the lithium battery supply chain would be most disrupted by a rapid increase in EV penetration, in particular lithium, cobalt and graphite. But only cobalt faces the issue of limited reserves, whereas for the other materials, current production capacity is the only bottleneck. New cell generations, however, will use less cobalt.
You can freely access this 95-page report here: (VIEW LINK)