31 January 2019: Global peak ICE production is likely to happen around the mid 2020s, possibly 2024, CRU principal analyst Neil Hawkes told the AABC conference in Strasbourg on January 28.
While the next decade or so would provide enough room for both lead and lithium technologies to grow, the following two decades would see much more in lithium batteries, he said.
The price of lead would also come under downward pressure over the next decade. One of the major reasons for the slowdown was the decline in China’s lead demand, which had sunk to single-digit growth, he said.
“Last year was very poor, and production has fallen for the first time in micro-HEVs. China’s own lead production is down, partly because of checks and new regulations — it’s more expensive in China and there’s a natural evolution of secondary lead taking over from primary lead,” he said.
“The Chinese demand boom is over. ICE production will peak in the 2020s, and slower lead demand could lead to over supply.”
Also presenting at the conference was Mark Lu, certified senior industrial analyst with the Industrial Technology Research Institute in Taiwan.
He said that as the number of electric vehicles increased, the proportion of ICE vehicles would drop from 95% of all vehicles to 70% by 2025. By 2040, the proportion would fall to 28%.
“Car and bike SLIs are still the biggest applications for lead batteries,” he told delegates.
“But if you just focus on that it will be a problem because the automotive companies are already decreasing their production. Vehicle growth is expected to stagnate and industrial use should continue to see growth, and the E-bike and UPS applications are seeing a positive future, but for automotives, 2019 is not looking very good.”
The change has happened quickly. In 2017, lead had more than half of the rechargeable battery growth worldwide — after 2020, the proportion will fall.
However the picture is mixed, with other applications, like start-stop vehicles, already accounting for 40% of all new ICE vehicles produced, rising to 50% at around the same time as ICE production peaks, Hawkes said. Start-stop batteries use more lead per battery than a standard combustion engine battery.
“And lead can still be used in industrial batteries so there are grounds for optimism in those slowing, if not stopping, the tide turning to lithium.”
The price of lead reached a six-year high in early 2018, but since then has dropped from over $2,500/tonne to just below $2,000, where it has settled, he said.
However in the longer term, it was possible that lower lead prices could change the economic argument back towards lead batteries, especially when recycling capabilities were taken into account. The long tail of replacement automotive lead batteries could also initially offset any detrimental hit on the OEM side.
There could also be positive gains on the industrial side, potentially offsetting the weaker automotive side.
Hawkes said lead’s good points — price, recyclability, performance improvements and replacement demand — meant there were positive factors. “Lead is in a fight for long-term survival but it’s not an imminent death,” he said.