Ed Miliband’s electric-car targets are a fantasy

For several years now, politicians and business leaders have been telling us that electric vehicles (EVs) are the future. On this basis, the former Tory government pledged to phase out the sale of petrol and diesel cars by 2030, before then prime minister Rishi Sunak postponed the ban until 2035 last year. Now Labour with Ed Miliband, the secretary of state for energy security and Net Zero, leading the way, is set to reinstate the 2030 deadline. This will be a terrible mistake.

In Britain, new EVs may be selling at the moment. In September it was reported that they account for 17.8 per cent of all car sales so far this year. Yet this is only a 1.4 per cent increase on last year’s market share – despite ‘unprecedented discounting’.

The UK car industry is becoming increasingly nervous about the prospects for EVs. Ford is now urging Miliband and Labour to delay the plan to phase out new sales of internal combustion engines. Stellantis, the owner of Vauxhall, is warning that it might have to shut its UK factories unless the 2030 deadline is relaxed.

The problem for manufacturers and consumers alike is that EVs need to get a lot better and a lot cheaper. And here, batteries, which can account for as much as 40 per cent of the price of a new EV, are a key factor.

At one level, batteries are cheaper than ever. Take nickel-free and cobalt-free batteries based on negatively charged cathodes made of new-generation lithium ferrophosphate (LFP). Since 2023, average prices for a single battery LFP cell have dropped, from $95 per kilowatt-hour (kWh) on the world market to $53 per kWh in China. And for a complete LFP battery pack, prices are down from $100 to $75 per kWh.

The problem is that, in the UK, the cheapest EVs, using LFP batteries, perform poorly. Citroen’s £7,700 Ami, an LFP two-seater, has a range of just 46 miles and can only crank up to 28mph. Cheap EVs using the current-generation lithium nickel manganese cobalt oxides (Li-NMC) batteries perform better, but they are slow to charge.

As it stands, EVs using an Li-NMC still compare well with those using LFPs. Take Tesla’s Model 3. The standard version has a smallish LFP, costs no less than $39,000 in the US, has a range of 272 miles and hits 60mph in under six seconds. Meanwhile, the Model 3’s ‘most affordable’ Li-NMC version is cheaper at $35,000 (after a $7,500 rebate given by the Biden administration), runs to 363 miles and reaches 60mph in under five seconds.

Of course, technologies beyond Li-NMC and LFP are coming. Though expensive, solid-state cells without electrolytes have promise. And the US Air Force hopes to equip its special forces with graphene aluminium batteries that may be able to charge a vehicle in less time than it would take to fill up a petrol tank. But these technologies won’t be available on a mass scale any time soon.

As it stands, it will be very difficult for the mainstream EV sector to meet its charging-time target of less than five minutes. Challenges include heightened safety risks, shorter battery lifespans, the availability of grid connections and the cost of installing superfast chargers.

Labour’s hopes of meeting the 2030 deadline have been given a faint boost by developments in China. It is now the world centre for LFP batteries (about three-quarters of its EVs use them), and cathodes now run at less than 30 per cent of an LFP’s cost. Meanwhile, overcapacity in China’s EV factories will be roughly 60 per cent this year, forcing manufacturers into tight profit margins and low prices. China’s manufacture of EVs and batteries is only likely to become more efficient.

With further research and development in batteries, EVs might be a more attractive proposition by 2030. Labour certainly hopes that EVs will represent about a fifth of Britain’s stock of registered cars – seven million vehicles – by then. But Miliband faces real headwinds reaching that total. Again, batteries show why.

On 2 October, we went to a packed London conference of Benchmark Minerals Intelligence, specialists in minerals necessary for battery manufacture. Benchmark claims that the current wobble over EVs is just a hiccup, and that the energy transition is inevitable. As a result, the company anticipates that prices for batteries and their ingredients, currently at rock bottom, will start to rise again – in the case of lithium and cobalt, perhaps even before 2030.

The conclusion may be correct, but the reasoning behind it is not. Just looking at the supply and demand for battery materials – which has just prompted the mining giant Rio Tinto Zinc to purchase a lithium producer – misses deeper economic and political considerations.

EVs in China, which account for nearly 60 per cent of global EV sales, are expected to reach a full 40 per cent of total new car sales in 2024. Yet China’s slowing economic growth may restrain demand.

Furthermore, some 600 new mines for battery materials will be needed by 2035 if demand grows to the extent envisioned by speakers at the Benchmark conference. To build that many mines will require a colossal $570 billion of investment by 2030, and $1.6 trillion by 2040. That’s a lot given the era of low interest rates looks unlikely to return for a while and that, apart from massive US spending on Artificial Intelligence (AI) and defence, Western investment is weak.

Rising labour costs will also affect battery prices. Chinese firms had sometimes extracted battery materials using nakedly exploitative means. In the Democratic Republic of Congo (DRC), these firms used children to gather cobalt by hand. Governments such as Chile’s or Indonesia’s will not accept such rapacious labour regimes. Furthermore, worldwide battery-supply chains now face EU regulations around economic, social and governance (ESG) issues, human rights and corruption, carbon emissions, water management and recycling. This all means that batteries will become more expensive, not less.

EV manufacturer Tesla and its owner Elon Musk might get a lot of publicity. But the world’s EVs and their batteries, like its renewables, come mostly from China. Indeed, 92 and 80 per cent of LFP and Li-NMC cathodes include minerals that go through the hands of the Chinese Communist Party (CCP). This presents Labour and Ed Miliband with a dilemma. Given that prime minister Keir Starmer has said that he wants Britain to move ‘in lockstep’ with the EU, he may find himself having to impose tariffs on Chinese EVs. If he does that, he’ll inflate their prices, rendering Labour’s phase-out of petrol and diesel cars even harder to achieve

Miliband’s hopes of meeting that 2030 deadline look slim. It is unlikely cheaper, heavy-hitting batteries will be around to make EVs affordable for most British car buyers in the near future. If Miliband is still in post by then, he will meet revolt not just from car makers, but also from new car buyers who refuse to pay through the nose for EVs.

His career prospects are not great.

James Woudhuysen is visiting professor of forecasting and innovation at London South Bank University.

Ruari McCallion is a freelance journalist specialising in manufacturing, as well as an author. He tweets at @RuariJM