The future of four wheels is all electric......As long as cars have been around, they’ve been defined by two things: a fuel-burning engine and a human driver at the controls.Goldman  Sachs Feb 16, 2024 Both of those things are changing – fast. The Future of Four Wheels, a four-part podcast series from Goldman Sachs Exchanges, chronicles the sweep and pace of this transformation. “Since the car was invented more than a hundred years ago, this is clearly the most transformational shift,” says Axel Hoefer, managing director in the industrial group in Global Banking & Markets at Goldman Sachs, on the first episodE of The Future of Four Wheels. Electric vehicles could make up as much as nearly half of global car sales by 2035, and our analysts forecast that more advanced autonomous or partially autonomous vehicles will make up the same share of sales just five years later. It’s a fundamental shift, upending labor markets, supply chains, and commodity markets. Along the way, the car is being completely rethought and re-engineered, to incorporate cutting-edge battery chemistry, microchips, and software. New carmakers have sprung up around the world – China alone has perhaps more than 100 electric vehicle makers – and traditional auto giants are retooling. They’re navigating technological trends but also the ebbs and flows of the economy. As interest rates rose over the past two years, and the cost of capital increased, investors grew more reluctant to funnel money into EV startups to help them grow in the long term. “Probably nine out of 10 startups are burning cash,” Hoefer says. “And all of a sudden, these companies struggle to raise cash in order to continue the development paths they are on.” But the overall trajectory continues to lean electric. EV startups are eating into the sales of traditional car companies. And those traditional car companies, in turn, continue to plan for an EV future, says Mark Delaney, an analyst in the Autos & Industrial Technology team in Goldman Sachs Research. “People say: ‘Oh, when are EVs at the tipping point?’” Delaney says. “I was like: ‘Well, it really depends, because in some segments, EVs already have crossed over.’”

The material questions of the EV age......The transition to electric vehicles hinges upon the stuff they’re made of. “I think the way to frame it is: We’re moving from a fuel-intensive to metals-intensive car,” says Nicholas Snowdon, head of metals and co-head of the commodities team at Goldman Sachs Research, on the first episode of The Future of Four Wheels.https://podcasts.apple.com/us/podcast/the-future-of-four-wheels-episode-1-the-twin-revolution/id948913991?i=1000643325985 

Manufacturing an EV requires a whole new set of critical materials — including up to six times the quantity of metals and minerals when compared to an ICE car. EV batteries, for instance, need lithium, cobalt, and nickel. Rare earth metals go into the magnets in EV motors. Aluminum and copper help distribute electricity around the car. Not all of these are readily available, or available in vast supply. “I think there can be very serious concerns over: ‘Do you have enough copper? Do you have enough aluminum?’” Snowdon says. For the mining of other metals, such as lithium and cobalt, the markets have seen high levels of investment over the past three or four years, he adds.  The distribution of these metals also differs from that of the materials for traditional ICE cars. Chile is the Saudi Arabia of copper, with about a third of global production. Three-quarters of the world’s supply of cobalt comes from the Democratic Republic of Congo. More than 60% of rare earths come from China. Further, upwards of 60% — and, in some cases, close to 90% — of refining capacity for these metals and minerals lies in China. Automobile firms will have to build new supply chains to source the materials for their vehicles.

EV battery prices will fall — and soon........Batteries power an EV — and also drive up its cost. Today, nearly a third of the price of an EV is its batteries, so if EVs have to match ICE cars on price, the batteries need to be cheaper. But that dip in the cost of batteries is imminent. At present, the average cost per kilowatt-hour of these batteries is $110–120. Goldman Sachs Research now expects battery prices to fall 40 percent by 2025 from 2023 levels, towards $91 per kilowatt hour......read on and check out The Future of Four Wheels, a four-part podcast series from Goldman Sachs Exchanges, https://www.goldmansachs.com/insights/articles/the-future-of-four-wheels-is-all-electric