“To get the environmental dividend that governments are looking for, users are going to have to keep them longer, drive them farther than they could with a conventional internal combustion vehicle,” said Powell, research manager. global theme within the company, “Street Signs Asia” told CNBC on Wednesday.
He explained that a “huge amount” of carbon is emitted when materials such as steel, aluminum and glass are created and assembled to make vehicles. He said the problem is compounded for electric vehicles, which currently tend to be heavier on average than their gasoline-powered counterparts.
“When they leave the factory, these (electric vehicles) are at a disadvantage,” he said. “They contain more steel. The brakes are bigger. The batteries are certainly heavier. “
The relatively heavier weight of electric vehicles today is a result of manufacturers’ emphasis on the range of these cars, Powell said. Unlike cars that run on internal combustion engines that have been around for decades, the infrastructure for charging electric vehicles is considerably less developed globally.
Importance of “green steel”
“The way this whole problem is solved is greener steel,” he said. “The use of hydrogen in the steelmaking process is also something to consider. “
“I don’t think a lot of people are talking about greening the steel industry,” the analyst said, admitting that it will be “very difficult” to decarbonise the sector on a global scale.
“I think it’s going to take time. We’re talking big investments with… long returns, long-term horizons, ”said Powell.
Meanwhile, investors should also watch the development of battery technology, as more energy-dense cells will help reduce the weight and potentially the embedded carbon of electric vehicles, Powell said.