It is very difficult to write about alternative motor fuel at present. The thing is not only that now the most enthusiastic response in the hearts of audience is got by the news about a rise in price of energy resources and not that the problems of automotive industry in general and alternative segment in particular faded against the background of energy crisis.

The main difficulties are connected with that we are in a bifurcation point. The numerous concepts connected with renewable power and electric cars are now checked for durability. The major conclusions from the today’s events can be drawn only in the first half of the next year.

What you definitely should not expect from the chaos that is happening now in a number of energy markets is a radical breakdown of the existing concept of energy transfer. It is almost impossible to imagine that respected European officials would go out to the general public and say, they say, we have been deeply mistaken about internal combustion engines all this time, and our infusion of billions of euros into the electric car segment is just a meaningless accident.
The present situation is ideal in a way: difficulties are experienced at once by all means of transport. Gas rises in price, the electric power grows in the price and there are interruptions in traditional motor fuel in places. And everything is not quiet in the automobile industry. Therefore current situation can show what of segments of motor fuels is steadier and that the most important as the consumer behavior under blows of economic elements will exchange.

Sinusoid of sales

Let’s start considering an energy crisis from an unexpected side — from automobile industry. In not the most successful for it 2019, according to OICA, 91,8 million vehicles were made in the world and realized  90,42 million. And 2020 became a real crash: 77,62 million were made and 77,97 million were realized.
The current year looks ambiguously. For the first half of the year all companies made about 40,34 million vehicles. In comparison with the indicators for the similar period of 2020 (31,22 million) it is a lot of. And in comparison with 2019 (46 million) — it is not enough.
Of course, to make a car is half the work. The main thing is to sell it. Here the situation looks more optimistic: 38,99 million vehicles were realized for the first six months of 2019, 27,78 million — in 2020 and 35,6 million in 2021. That is the market completely was not restored up to the pre-crisis volumes, but, apparently, there is a positive tendency.
However ambiguous data come from the world’s largest car market — from China. The first six months of sale grew. And in July, according to Xinhua agency and the Chinese association of cars, retails of cars, including multi-purpose vehicles, were reduced on 6,2% — to 1,5 million units. If to look at data for the first seven months, even taking into account July correction of sale increased on 22,9% (to 11,45 million). For comparison: in January-July of 2020 this indicator was reduced on 19%.
The peak of sales reached a car market of the People’s Republic of China in 2017 (28,88 million). Since then the volume of annual realization of vehicles constantly decreased, having reached the bottom last year — 25,31 million. Dynamics of restoration of the market in 2021 gave a hope that following the results of the year realization of cars can exceed last year’s indicators. But the data for August were unfavorable too — decrease on 11% (to 1,545 million) in comparison with the similar period of last year.
Thus in annual expression growth is still observed. In a passenger segment — on 16% (13,11 million), and general sales of vehicles grew on 13,7% (to 16,56 million). If the situation does not change sharply in the fourth quarter, data of the Chinese car market in the current year will be on 1-1,5 million more depressing than last year.
The saddest thing is that the same situation is observed not only on the Chinese car market. So, in Russia for the first three quarters of 2021 realization of new cars increased on 15,1% (to 1,26 million). It seems that it is great success, let against the background of catastrophic 2020. But in September of sale fell off at once on 22,6% of rather similar period of last year.
But maybe, everything is good in Europe? According to the European association of car makers (ACEA), for the first eight months of the current year sales of cars grew on 11,2% (to 6,8 million). But! In July there was a recession: a number of new registration decreased at once on 23,2% (to 0,824 million). In August sale was reduced on 19,1% (to 0,623 million). The most disturbing that two-digit decrease was shown not with the periphery but with the largest automobile markets of the European Union (Germany, Spain, Italy and France).
Great Britain which fell out of the European holder very strongly would spoil already weak indicators of the EU in the third quarter. So, Foggy Albion in September of this year could establish an anti-record: car sales not simply failed on 34,4%, it reached the minimum value (0,215 million) for September since 1998.
And the car market of the USA repeated the same «sinusoid of sales». It grew the first two quarters and then went down in July, having reduced on 7,4%.
There is one explanation which justifies a little the situation developing now on the world car market. A considerable role in the observed falling was played by reduction in production of vehicles which is in turn connected with deficiency of semiconductor production. Deficiency of semiconductors has complex character.
Problems with deliveries of new cars lead to growth of activity in a segment of second-hand transport. But, of course, difficulties with production of accessories do not cancel influence of economic consequences which are involved by the energy crisis which inflamed thanks to combination of circumstances in a number of regions of the world. And the problem of the rising in price energy resources has a direct bearing on the question of cars and motor fuel discussed by us most. But for full understanding of the situation we need to set a context. Also we will begin with electric cars.

Threshold in 10 million

Last year became record for electric transport. If in 2019, according to the International power agency, sale in electric segment reached 2,1 million units, in 2020 this indicator exceeded 3 million. The remarkable moment is that a number of electric buses (to 600 thousand) and trucks increased (to 31 thousand). The total of electric vehicles exceeded 10 million.
Here we, of course, completely ignore the dominating segment — two — and three-wheeled electric transport. As far as it can be judged, collecting statistics on it is especially complicated. However we can refer to data of BNEF which testify that this type of electric transport occupied 44% of sales in the segment, and the total of electric mopeds, scooters, motorcycles, etc. makes 260 million units. It is impressive, but the fight for the future of energy carriers takes place not among scooters.
The unexpected push to the market of electric transport in 2020 was provided by Europe. In the European Union over 1046 thousand all types of electric cars (in 2019 — 387,8 thousand) were sold and taking into account Great Britain and the countries of the European association of free trade the gain made 137%. The indicator of sales reached 1364,8 thousand (in 2019 — 559,871 thousand).
Usually Europe was behind of China on sales volumes, and now was beaten out in leaders. Considering that about 90% of all sales of electric cars in the world are a share of the EU, the People’s Republic of China and the USA, any motion at each of these players makes essential impact on the market in general.
China, by the way, increased sales of electric cars too, but dynamics of growth was significantly more modest than in Europe: from 1,06 million in 2019 to 1,33 million in 2020 (a gain of 12%). In the United States the volume of realization of electric transport made 328 thousand. And Japan, on which supporters of prompt electromobilization pin some hopes, showed falling of sales for 28% at all — to 31 thousand (according to BP). Even South Korea acted better — 52 thousand electric cars were sold in this country during 2020.

Carrots and sticks

Growth of interest of Europeans in electric cars during the most severe crisis is covered in toughening of the environmental standards regulating carbon dioxide emissions. Many forecasts of the future domination of electric cars refer to two postulates: the price of accumulators falls, the cost of possession of electric transport comes nearer to indicators of possession of a traditional car. Both postulates hardly undergo testing for durability during the current crisis in the energy markets. How many do not convince car owners that the cost of possession of an electric car and regular vehicle was almost the same but he, most likely, will not go for persuasion without additional incentives.
Therefore sales were stimulated not only with a stick but also with a carrot. Earlier we already wrote about to what consequences led reduction of the state grants and other measures of support of an electric segment. Sales steadily fell.
Exaggerating a little, it is possible to tell that the state has to bribe a person who agreed to purchase of an electric car. By the way, this idea is introduced on pages of Financial Times by the automobile analyst from Jefferies who declared at discussion of dependence of electric vehicle industry on subsidies literally the following: «We still considerably bribe clients that they got electric cars in Europe, in China. The amount of bribery is more moderate». Then the European Union leaders decided to undertake a stick that carrots were better metabolized.
But citizens of the EU behaved exactly as we predicted many years: they started buying up actively chargeable hybrids (PHEV) which allow to observe strict ecological formalities and to keep consumer habits.
There were chargeable hybrids combining electric part and internal combustion engine, which provided the main gain in an electric segment of the European Union in 2020. Their sales increased on 331% while realization of «pure» electric cars (BEV) grew on 216,9%. The gap in quantity between BEV and PHEV under pressure of new environmental standards started being reduced promptly. It is worth making a reservation that so far all «green alternative» is won by usual hybrids which total of sales in Europe in 2020 reached 1,45 million units.
In the first half of 2021 this tendency remained. Sales of «pure» electric cars increased in the first quarter on 59,1% and reached 146,19 cars. The plug-in hybrids jumped up for 175% — to 208,39 thousand. The second quarter showed even more impressive results: BEV grew for 231,6% (to 210,3 thousand), and PHEV — for 255,8% (to 235,73 thousand). It is convenient when you, it seems, in an electric car but if you do not want to stand in a queue on a charging station — go at a gas station.

In turn! In turn!

The turn is mentioned not for effect here. In very electromobilized Norway a chain of waiting an opportunity to be recharged electric cars is an everyday occurrence. According to the research EVBox, the main obstacle in a way of transition from internal combustion engine to electric traction is fear not to find a point for electric car charging. Fast charging is capable to fill the battery from 0% to 80% in 20-40 minutes. That is even the small turn from two electric cars is capable to lose notable amount of time at «recharging». But it is worth noticing that a number of charging stations continues to grow, though not everything is unambiguous here.
So, the British antimonopoly department noticed that electric car chargers in the territory of Great Britain prefer to build in the rich London where electric cars are situated, but not where they are unavailable! In its limits there were 4700 street chargers and beyond its limits — 1000. In total there are about 25 thousand electric car charges in Foggy Albion, and according to the forecasts, their quantity has to increase much by 2030.
Great Britain, by the way, declared plans to stop completely sale of petrol and diesel cars by 2035. On surprising combination of circumstances it was told in anticipation of climatic conference in Glasgow. British are not lonely in their desire to forbid internal combustion engines. Besides, Norway plans to refuse cars with internal combustion engine by 2025 too. The European Union suggests to impose an own ban till 2035.
In parallel with it the European commission revises standards of emissions of CO2 for new vehicles towards toughening. It is very much afraid that the active electrification of the European vehicle fleet which began in 2020 will stop if the governments of the European Union countries do not start carrying out the corresponding investments into infrastructure and to introduce significant and steady incentives for transition from internal combustion engine to electricity.
Meanwhile a share of petrol and diesel cars is reduced, but their quantity does not decrease. In this sense it is interesting to remember the forecast of OPEC according to which a share of electric cars will grow to 17% by 2040, but the total of vehicles will increase to 2,5 billion (that is approximately on 1 billion from the current quantity). Of course, there are also more radical forecasts. For example, Bloomberg considers that world sales of electric cars by 2040 will increase to 66 million, that is will occupy two thirds of the market.
But here we besides come back to the question of possession cost, price of accumulators and the readiness of people resulting from them to refuse cars with an internal combustion engine.

120 billion dollars in a year

As reports Financial Times with reference to McKinsey, since beginning of 2020 the industry of electric cars and the connected hybrids attracted more than 100 billion dollars of investments. And according to calculations of the consulting company AlixPartners to which Financial Times besides refers, car makers declared 330 billion dollars of investments into electric and accumulator technologies for the next five years.
In general, according to International Energy Agency, consumer expenses in the electric car market considerably grew for the last decade. In 2019 they made 90 billion dollars (13% more than in 2018). And in 2020 120 billion dollars were spent on purchase of electric cars. Knowing these data, it is possible to count average costs of one electric car — 38,7 thousand dollars. It is a modest sum.
Now the most popular electric car on the planet is Tesla Model 3 which price in the most senseless and ruthless complete set (in the USA) starts from 36 thousand dollars. And the second for popularity is SAIC-Wuling Hongguang Mini EV (128 thousand in 2020). It is a minibus, on dimensions similar to «Oka». It costs respectively 4162-5607 dollars. And there are still such popular models as Nissan Leaf, Mini Cooper SE Hardtop, Chevrolet Bolt EUV, Hyundai Kona EV, BMW i3, etc. The prices of these electric cars vary from 28,4 thousand to 45,5 thousand dollars. And a noticeable tendency to reduction of prices is not traced.
And why should prices go down? That explains high cost of electric cars in comparison with schoolmates on internal combustion engine with the price of the batteries amounting 50-60% of prime cost. Besides, reputable international agencies note considerable reduction in cost of accumulators (approximately on 90% over the last ten years). And electric transport does not become cheaper after them. Falling of possession cost in such conditions is an excellent question. And 2021 tried to answer it.
The prices of primary lithium materials started growing in China (the largest producer of batteries and electric cars). The price of lithium hexafluorophosphate jumped up from 4 thousand to 51,2 thousand dollars per ton. It is even interesting, what will be with the forecasts about further depreciation of batteries?
If to understand the situation which led to a rise in price of lithium materials, it will be found out that reduction of prices in previous years was caused by something like a self-fulfilling prophecy. At the end of the 2000s there were forecasts about fast triumph of electric cars. It provoked a splash in investments into lithium productions. There was an oversaturation of the market. The prices fell. There is no surplus any more now. New investments are also required.

How much metal does it take?

The metal mining industry in general treats with interest the forecasts about domination of electric cars. According to the Nature magazine, 207,9 thousand tons of cobalt, 264,6 thousand tons of carbonate of lithium, 7,2 thousand tons of neodymium and dysprosium and also 2362,5 thousand tons of copper will be required to transfer vehicle fleet of Great Britain (31,5 million cars) from internal combustion engine on «pure» electric cars. It is twice more than the current annual world production of cobalt. It is more than world production of neodymium in a year and three quarters of world production of lithium. For replacement about 1,4 billion cars worldwide from internal combustion engine will be required in forty times more than these volumes.
Has someone already invested in productions of these materials that prophecies on domination of electric cars in the next twenty years come true or prophets still hope for technological breaks in the field of storage of electricity? Perhaps, they hope for hydrogen power, which part are hydrogen electric cars? But it is not noticeable considerable breaks and investments yet even in hydrogen power.
Here it is worth referring to a Board member of Volkswagen Claus Zellmer who said that VW is not against refusal of internal combustion engine and wants to promote consistently electrification, but thus the concern «will be guided by needs of customers». Many car makers are afraid of electric false start therefore their investments into electromobilization have in general careful character.
And so far these efforts are supported by the governments worldwide. Only in 2020 they, according to International Energy Agency, spent 14 billion dollars for support of purchase of electric cars. It is on 25% more than in 2019 generally due to the efforts of Europe.
This year, as we showed above, the EU goes very fast. In any case, it was in the first half of the year. And the European Union was not lonely. In the first quarter of 2021 world sales of electric cars increased approximately on 140% in comparison with the similar period of 2020. China is in leaders again where about 500 thousand electric cars were realized. According to International Energy Agency sales for the same period more than doubled in the USA. But there a low base effect played.
If to take the first half of the year, the People’s Republic of China, according to «Xinhua», will show increase in sales of electric transport more than in three times — to 1,2 million. Even in July when the car market felt ill at ease, sales grew on 169,4% — to 222 thousand.
In total in the first half of the year about 2,6 million electric cars (growth on 160% of rather similar indicator of last year) were sold. Therefore meanwhile the majority of forecasts agree on a record gain of electric cars in 2021 — 5 million. And this size looked quite realistic until start of acute shortage of semiconductors and electricity begins to rise in price.
British were the first who openly raise a question of price on electric cars charging against the current prices. In 2019 and 2020 an average price for kilowatt/hour in Great Britain made about 18 pence. In September this indicator grew to 24 pence (23,9 rubles). In 2020 an electric car charging with the battery 50 kilowatt/hours cost taking into account energy losses approximately 9,5 pounds sterling (945 rubles). In September 2021 — 13 pounds sterling (1,29 thousand rubles). But 24 pence is a lower limit of tariffs on public charging stations. The upper bound is 69 pence per kilowatt/hour (68,6 rubles). At 69 pence for kilowatt full charging will cost 34,5 pounds sterling (3,43 thousand rubles). At such prices, there can be no question of any advantages in operating costs. However, there are countries where everything is stable with electricity prices. But these countries want too much to increase a number of electric cars. Russia is one of them.

The second London

In total there were 1 thousand charging stations in Russia in the middle of 2021. About a third of them are located in Moscow. At the same time, the authorities of the capital plan to install 200 electric gas stations annually.  The number of electric vehicles in Russia is about 11 thousand, of which 2 thousand are in Moscow, and their number is growing on 10-15% per year. The best-selling electric cars in our country at the moment are Porsches Taycan, Audi e-tron and Tesla Model 3.
Since 2021, the state leadership has taken up the electric theme with unprecedented speed. The Government has approved a Concept for the development of the production of electric vehicles. Its implementation assumes two stages: till 2024 and after.
At the first stage it is planned to prepare a base for mass production of electric cars and to release not less than 25 thousand electric cars. Also till 2024 not less than 9,4 thousand charging stations have to be put into operation, thereof 2,9 thousand with fast charging.
After 2024 and till 2030 electric cars have to reach 10% of total production of vehicles in Russia. At this stage it is planned to start production of cells for traction batteries, cathode and anode materials. In addition, there will be, more precisely, it is planned that at least 72 thousand charging stations will be put into operation (28 thousand of them are fast). And it goes without saying: 1 thousand gas stations should be hydrogen. Before adoption of this concept the representatives of the Ministry of Economic Development expressed opinion that a share of electric cars in Russia by 2030 will make 15% and 750 thousand domestic electric vehicles will be realized. The turn of the market will reach 1,9 trillion rubles, at least 39 thousand workplaces will be created, Vasyuki is renamed into New Moscow, and Moscow — into Old Vasyuki. Leningrad residents and Kharkov citizens gnash their teeth but can do nothing with it. All these take modest 590 billion rubles.
On this fertile background announcements of «the first Russian electric car» started sounding, and presentations on electric car subject were also held. So, «Sber» which successfully developed the sphere of laptops, media players and virtual «clever» assistants, to be exact, its division SberAutoTech, presented a prototype of autonomous electric transport under the name «FLIP» (an obvious reference to «The guest from the future»).
Powerful flow of top-level electric car initiatives involuntarily forced a part of professional community to be anxious about the fate of gas engine direction, whether it will become a victim of electric ambitions.

Steady gas

Last year was a difficult period for global gas engine branch. So far, no relevant international organization prepared any detailed statistics on changes in the methane fleet in 2020. But by existing estimates, a number of the cars working at natural gas exceeded 30 million. It, of course, is not as interesting, as 10 million electric cars.
It was not observed special progress of natural gas as motor fuel on the European direction. Moreover, sales of methane cars in the EU for 2020 were reduced according to ACEA on 35,3%, but the sale of cars running on liquefied petroleum gases in the European Union increased by 69.5%. Europe is quite a propane-butane region. According to WLPGA, the peak of consumption of liquefied hydrocarbon gases as motor fuel on a global scale fell on 2019 — 27,1 million tons. In 2020 consumption decreased. There is no wonder, as it depends on the volumes of oil production and business activity. The total number propane-butane cars has exceeded 28 million and continues to grow. In Russia consumption of methane on transport for the last 6-7 years increased almost on 2,5 times, having exceeded following the results of last year 1 billion cubic meters. But this mark is still far from a target indicator in 11 billion cubic meters by 2030. The number of gas cylinder methane cars today in Russia is about 230-240 thousand. About a half is automobile transport. But the main consumers, on which the emphasis is placed– are heavy-duty cars and buses. The attention which was paid to electric cars the last months, nevertheless did not cancel strategic importance of gas motor fuel (GMF). In October, at the St. Petersburg International Gas Forum, the Ministry of Energy announced the creation of the Uniform coordination center for the development of gas motor fuel infrastructure. The Minister of Energy Nikolay Shulginov noted that exactly the gas engine market is the most fast-growing among fuel markets in our country. He predicted growth of consumption of methane as motor fuel by the end of 2021 on 20-25% (over 1,3 billion cubic meters). The program of development of filling infrastructure will be soon reformatted under the Federal project. It is planned to increase a number of the regions specified in it. Also during the St. Petersburg International Gas Forum a number of important documents in the field of GMF was signed. So, the road map on implementation of the pilot project on the gas motor fuel market development was signed with the Government of the Leningrad region. «Gazprom gas motor fuel» concluded agreements with Tatarstan, Mordovia and Kaliningrad region. Also the company signed the plan of measures with «Avtodor». In their framework highways in the territory of Moscow region will be provided with filling infrastructure. They are a part of international transport route «Europe-China».Earlier we have already written that it is difficult to overestimate the value of the transit corridor «Europe-China» for development of gas motor direction. But now there many risks connected with an unhealthy situation in power industry of Europe. For example, the risks for the European economy are created by the growth of spot quotations for gas, to which, at the insistent request of the European Commission, prices for long-term contracts in Europe were tied. And the risks to the economy entail risks of reducing demand for imported goods. And that, in turn, is the risk of reducing export flows. Unfortunately, now it is early to draw conclusions. The space for forecasts was too wide. It is quite probable that electric transport will appear an affected party because of increase in prices for electricity in Europe. An indicative point is the persistence with which some respected organizations are trying to deflect the blame for what is happening in the EU energy markets from the «greens», to which electric cars are involuntarily adjacent. But no matter how events unfold in the coming months in the field of gas, coal and electricity, one thing can be said with full confidence: we are present at an unwittingly arisen experiment that will provide invaluable information about the real prospects for the development of both traditional motor fuels and the electric segment.