EIT Urban Mobility and EIT InnoEnergy have published a join report that looks at batteries for light electric vehicles. Based on both quantitative research and qualitative input from the LEV and battery industry, it aims to assess the potential for EU-made batteries to power a modal shift from cars to LEVs. The report highlights the role LEV batteries can play in the European battery value chain, stressing their positive impact on mitigating raw material demands. The report casts light on the requirements of LEV batteries around costs, safety, and performance, and provides recommendations to improve the circularity and sustainability of these batteries.

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Full report: https://www.eiturbanmobility.eu/wp-content/uploads/2024/07/LEV-Report-Final-Digital-1.pdf
Infographic: https://www.eiturbanmobility.eu/wp-content/uploads/2024/07/EIT_LEVs_0907-1.pdf

Batteries have been at the heart of Europe’s efforts to effectively decarbonise road transport and meet its climate goals. Significant progress has been made in establishing a domestic battery value chain, with €126 billion in investments across 111 major projects, while stimulating enough initial demand for electric vehicles to cross the 5% inflexion point to trigger mass adoption.

Despite this progress, existing policies are falling short of meeting the EU’s 2030 targets, leaving a significant emissions gap of at least 165 MtCO2 eq. Furthermore, they are not generating enough electric vehicle demand to match the planned battery production in the midterm, potentially leading to up to 3 times overcapacity until 2030. Nearly halfway through this decade, the EU must explore additional levers to accelerate the transition to sustainable mobility and bridge its emissions gap.

However, batteries are just a means to an end. For road transport, the end is to ensure the safe, sustainable, and affordable movement of people and goods. This requires a comprehensive view of the EU’s mobility transition to equally support the uptake of alternative, fast-growing e-mobility solutions while strengthening their industrial and battery value chains. This approach will allow for strategically allocating valuable and limited resources and a more coordinated effort to achieve net-zero road transport.

Light Electric Vehicles (LEVs), such as e-bikes, e-kickscooters, e-mopeds, and e-motorcycles, are one such fast-growing solutions. With an estimated more than 10 million units sold in 2022 in Europe, LEVs are rapidly integrating in today’s urban mobility. LEVs have the potential to significantly reduce road transport emissions and help bridge the EU’s 2030 emissions gap by
addressing a substantial portion of urban mobility needs with less energy and CO2 footprint – saving at least 30 MtCO2 eq just by replacing 13% of the daily short-distance trips made by cars and vans in cities. Beyond environmental goals, this shift could also contribute to industrial and economic goals, creating 1 million green jobs in an industry that is expanding its European
footprint. In light of the EU’s Net Zero Industry Act, which aims to bolster domestic production of clean technologies, the next critical question is how to sustain and accelerate LEV adoption by leveraging Europe’s strategic industrial resources, particularly its battery value chain.

This paper examines the implications of securing a European battery supply chain for the LEV industry, highlighting key challenges and opportunities for both LEV and battery players. It analyses the demand for LEV batteries in Europe and their impact on the supply of critical materials. It also explores essential factors for LEV adoption, such as battery costs, safety, performance, and carbon footprint, focusing on future battery chemistries and considerations for battery circularity.
This paper was a collaborative effort between EIT Urban Mobility and EIT InnoEnergy and draws on expert insights from the LEV and battery industries.

Key takeaways:

There is potential room for EU battery production to power the modal shift to LEVs, with minimal demand for critical resources:

• By 2030, Europe’s planned battery production capacity of 1,144-1,800 GWh will far exceed the projected battery demand of 317-696 GWh from electric cars under current policies.
• Some of this capacity could be allocated to support the modal shift to LEVs, which have an estimated annual battery demand of 36 GWh by 2030 and 71 GWh by 2040 – requiring 10-30 times fewer critical metals than electric cars.
• However, LEV players may face challenges securing an EU battery supply due to the low demand compared to electric cars, exacerbating existing supply chain risks, as 95% of LEV batteries are currently sourced from Asia.

In turn, LEVs could bolster the EU battery value chain by serving as ideal off-takers of standard cross-application cylindrical cell production:

• Europe’s cylindrical cell production capacity is expected to increase from 7.6 GWh in 2021 (10% share) to 100 GWh by 2030.
• As the preferred format for most LEV applications, EU battery players could secure up to 85 GWh cumulative battery demand until 2030 from domestically produced LEVs, stimulating the ramp-up of cylindrical cell production.
• Leveraging cylindrical cells as a strategic, cross-application standard enables EU battery players to meet diverse industry demands beyond LEVs and e-mobility, strengthening and diversifying the European battery value chain.

Current and future battery technologies will play a critical role in making LEVs a more attractive and viable alternative mode of transport:

• While ongoing advancements in battery technologies for passenger cars will continue to trickle down to LEVs, dedicated research and funding are still needed to meet LEV’s specific requirements and overcome adoption barriers.
• Key battery factors –safety, costs, and performance– directly impact the affordability and consumer acceptance of LEVs and, thus, their adoption. These advancements and their implications for LEVs are explored later in the paper.

Strengthening the current regulatory framework and upskilling the workforce are critical
to a more sustainable and circular value chain:

• To facilitate the repair, reuse, and recycling of LEV batteries, the battery passport needs to become more operational and aligned with the needs of the various value chain actors.
• There needs to be clearer and stronger safety and liability warranties in place to enable battery repairs.
• Upskilling the labour force and investing in appropriate training is critical to facilitate repair and recycling, as will battery pack design for disassembly and circularity.