Supporting the electrification of transportation by offering an end of life re-use solution for Electric Vehicle (EV) batteries is one of our key motivators at Cactos, and as such we watch the rapidly evolving and growing EV market with interest as we plot our path for the future.
The electrification of transport has many benefits and these are becoming ever more tangible in daily life given the current global backdrop. Russia’s invasion of Ukraine has brought the role of EVs in reducing our demand for oil and associated products, such as petrol and diesel, to the fore.
According to the International Energy Agency (IEA), sales of EVs doubled in 2021 from the previous year to a new record of 6.6 million. In order to consider that in context, it is worth noting that in 2012, only 120 000 electric cars were sold worldwide, with more than that being sold on a weekly basis in 2021. In 2022, the strong growth continues with 2 million EV’s sold in the first quarter, up 75% from the same period in 2021 though supply chain disruption and increased material costs may impact this in the later parts of the year1.
Naturally, the electrification of transport will increase electricity demand, with the IEA estimating that EVs are projected to account for approximately 4% of total final electricity demand by 2030. As such the build out of renewable energy generation, grid infrastructure and storage solutions is key to supporting this growth1. The changes in the electricity demand profile as a result of the rise in EV market penetration mean that grid stability and management of peak loading is extremely important with McKinsey noting that the changing load curve will lead to challenges at a local level because the regional spread of EVs will most likely vary2.
We believe that the use of localised infrastructure in the form of co-location of EV charging stations with battery storage units like Cactos 1 offers an excellent solution to managing peak loading on the grid network, ensuring resilience and stability whilst offering uninterrupted charging capabilities and capacity.
With the fast pace of EV growth and market penetration, a forward looking view and plan on the most efficient, effective and environmentally friendly uses of key components such as the batteries is critical. With large increases in commodity prices and supply constraints due to mining capacity and other factors, recycling of batteries presents an interesting opportunity with significant investment being seen in this sector in Europe and the USA. In practice, recycling hasn't yet reached a critical mass and currently, globally, it's very hard to get detailed figures for what percentage of lithium-ion batteries are actually recycled, but the value everyone quotes is in the region of only 5%3.
At Cactos, we believe that re-use is a superior alternative to recycling for EV batteries after their first life use, extending their useful life far beyond that of their EV function and ultimately still allowing for recycling at a later stage ensuring maximum lifecycle benefit, re-use of critical raw materials and minimising environmental impact.
We are excited to be developing technology and energy solutions for a cleaner greener future and we thank you for reading this newsletter.