BHP has lifted its forecasts for the adoption of electric vehicles around the world, a phenomenon that will have substantial ramifications for the world's biggest miner.
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It now estimates at least 132 million EVs will be on the world's roads in 2035, and at least 561 million in the middle of the century. These numbers are its "low-case" forecasts, and it also suggested take-up could be higher.
In new numbers released on Tuesday, BHP estimates that EVs will comprise at least 7 per cent of the world's light vehicle fleet in 2035, up from 5 per cent in previous forecasts.
In 2050 it predicts more than one in four light vehicles on the world's roads will be EVs, or 27 per cent, up from its earlier forecast of 21 per cent.
There were 2000 fully electric cars sold in Australia in 2018, which is about 1 in 500 new cars sold.
The miner is watching the developing EV market closely, given its activities around the world. It has significant copper and nickel operations - two commodities that are essential to EV batteries. It also has significant oil operations and has said it sees continued demand for the commodity.
There is about four times more copper used in an average-sized EV than in a traditional petrol engine counterpart.
The company signalled its optimism in the growth of EVs last week, when it confirmed it would retain its Nickel West business, with chief executive Andrew Mackenzie citing the potential growth in the business due to "the expected growth in battery markets".
In a blog post on Tuesday, BHP also released "high-case" forecasts for EVs, saying "the highest plausible penetration rate" for EVs in 2035 could be more than one-third of the light vehicle fleet, or 36 per cent, while in 2050 it could be as high as 75 per cent.
BHP chief economist Huw McKay said the company had raised its low-case prediction for EV market share.
"Our EV cases, consistently applied across the portfolio, are essential to establishing the plausibility of our long run copper, nickel, oil and power demand ranges. That in turn flows into price estimates and our assessments of the relative attractiveness of commodities inside and outside our portfolio," he said.
In the high case, EVs penetrate faster in a larger and more rapidly expanding market for vehicle ownership and transport services.
- Dr Huw McKay, BHP
The report substantially lifts base forecasts of EV sales, predicting that at least 16 per cent of all light vehicle sales in 2035 will be EVs, rising to at least 47 per cent in 2050.
In its "high case" BHP estimates that the EV fleet is expected to surpass 700 million by 2035 and reach 1.6 billion by 2050.
"Put simply, in the high case, EVs penetrate faster in a larger and more rapidly expanding market for vehicle ownership and transport services; in the low, they penetrate more slowly in a smaller and less rapidly expanding market for vehicle ownership and transport services," Dr McKay said.
In an interview with The Age and Sydney Morning Herald Dr McKay said the rise of EVs was "very much a positive in a net sense, for our current set of assets and our current set of options".
Nickel was set to provide a "positive double whammy" benefit, he said. This is because a lot more electric batteries will be needed because of rising demand for EVs, and also because EV batteries are evolving and using a greater amount of nickel.
"Nickel West is our direct exposure to battery manufacturing, but we would like more options in our nickel portfolio. And so we want to go and explore for more nickel, but only of a particular type. As a company we want the very best assets in a commodity," he said.
In a recent report UBS said global sales of EVs grew 67 per cent in 2018. It also said that its latest survey of almost 10,000 consumers in major car markets showed consumers were increasingly willing to buy EVs.
- SMH/The Age
