The global electric-car market saw growth of 41% last year, according to an International Energy Agency report. The strong momentum for electric cars has continued into 2021, and the market is "on track for a decade of strong expansion."

"Newly announced plans from China…and the U.S. to boost their domestic manufacturing capacity in this critical sector will lend further support" in coming years to prices for metals used in EV manufacturing, Birch says.

Fuel cells used to power some EVs reportedly employ small, but expensive, amounts of platinum and palladium. Battery EVs, meanwhile, contain 183 pounds of copper, according to the Copper Development Association.

This year, futures prices for copper HGN21, +0.03% HG00, +0.03% have climbed 29%, platinum PLN21, -0.28% PL00, -0.28% is up 14%, and palladium PAM21, -0.07% PA00, +0.41% has added 21%.

The Biden administration has proposed a $174 billion investment in the EV market. It is also pushing for an EV tax credit renewal. If that happens, it "could drive higher-than-expected demand," says Pedro Palandrani, analyst at exchange-traded fund provider Global X. For key materials like lithium, which is used in batteries, "that's one more tailwind."

Average lithium prices have climbed by 41.6% so far this year through April 2021, according to Benchmark Mineral Intelligence. That follows a drop over the past three years that saw average prices fall from $18,729 per metric ton to $7,725 as of October 2020.

Lithium demand is expected to increase more than 300% over the next five years, to one million metric tons by 2025, "driven largely by the growth in EVs," Palandrani says. By 2030, demand may reach two million metric tons, with EVs accounting for over 95% of that.

But as some metals look to benefit from EV growth, talk of a potential hit to demand for oil CL.1, +0.31% BRN00, +0.46% has climbed.

A report from IHS Markit shows that last year, light plug-in and fuel-cell vehicles, as well as electric city buses and two-wheelers, collectively displaced about 370,000 barrels per day of global oil consumption. By 2025, that may grow to 1.5 million barrels per day, equal to about 1.4% of the projected level of total world oil demand.

For now, analysts aren't very concerned. As car manufacturers roll out a large number of new EVs by 2025 and beyond, "invariably, some of those can make market penetration and continue to eat into traditional market share for liquid fuels," but that's largely a "developed economy, or rich country issue at this point," says Dean Foreman, chief economist at the American Petroleum Institute.

Through the first quarter of this year, U.S. petroleum demand was back within 1% to 3% of where it was during pre-Covid times roughly a year ago, he says. A lot more oil has been going into petrochemicals, which are derived from oil or natural gas and can be used to make disposable syringes and personal protective equipment like those in high need during the pandemic.

Even by the most aggressive estimates of EV growth in the transportation sector, "it is clear that the primary sources of transportation energy will continue to be natural gas and oil," Foreman says, adding that worries about a drop in oil and gasoline demand are premature.

Regional Insights

Asia Pacific dominated the global electric vehicle market in 2019 and expected to be the most lucrative region during the forecast period. China is the major electric vehicle market globally as it accounted nearly half i.e. 45% of the global electric vehicle sale. Other countries such as Japan, Korea, and India are also opportunistic markets as the governments of these countries are significantly investing in the EV startup to promote the manufacturing and sale of EVs across the globe. In July 2019, a Japanese firm Mitsui & Co. invested USD 13.3 million in an Indian e-Vehicle startup company, SmartE. The investment would help SmartE to bring multiple synergies in global EV market for its long term growth. Similarly, in June 2019, Toyota Motor Corp. invested USD 2 Bn for the development of electric vehicle in Indonesia.

Europe and North America witness substantial growth in the global electric vehicle market. This is attributed to the increasing demand of electric vehicles in U.S., Norway, France, and Germany. Germany and Norway are the leading markets in European region that witnesses a CAGR nearly 40%. Moreover, for the promotion of electric vehicles in North America policy makers, automotive manufacturers, and charging network companies have launched a non-profit organization called ‘Veloz'. The organization aimed at attracting innovation, investment, marketing, and growth of the electric vehicles market. Electrify America, a U.S. based electric vehicle manufacturer, announced to invest USD 2 Bn in Zero Emission Vehicle (ZEV) infrastructure across U.S. over 10 years from 2017 to 2027 out of which USD 800 Mn were invested in California, one of the largest ZEV market across the world.

Key Players & Strategies

The global electric vehicle market is consolidated and highly competitive owing to the presence of large number of players. Market players are significantly involved in merger, acquisition, partnership, regional expansion and other marketing strategies to retain their position in the global market. For instance, in March 2020, Nikola Corporation, a zero-emission truck startup announced its merger with VectoIQ, dedicated for the development of mobility as a service and autonomous fleet.

Some of the key players of the market are BYD Company Ltd., Ford Motor Company, Daimler AG, General Motors Company, Mitsubishi Motor Corporation, Groupe Renault, Nissan Motor Company, Toyota Motor Corporation, Tesla Inc., and Volkswagen Group, among others.

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