YIJC 2024 JC2 H2 Prelim CSQ1 Suggested Answers

1 | P a g e Answer all questions. Question 1: The Not-So-Certain Economics of Electric Vehicles Extract 1: Electric Vehicle Market Electric vehicles (EVs) are essential to decarboni sing transportation, with their numbers increasing due to rising global demand. While electric cars are significantly cheaper to run — potentially costing up to half as much per mile as similar -sized petrol or diesel vehicles — they are generally more expensive to purchase. To mitigate this cost barrier, many governments offer tax credits and other incentives, making EVs more accessible to a broader range of consumers. Goldman Sachs Research now expects battery prices to fall to $99 per kilowatt hour (kWh) of storage capacity by 2025 — a 40% decrease from 2022 . Analysts estimate that nearly half of this reduction will be driven by falling prices of EV raw materials, including lithium, nickel, and cobalt. Expanding charging infrastructure and advancing battery technology are crucial to accelerating the adoption of EVs. In response to growing demand, cities are increasingly installing more charging stations in public spaces like grocery stores and airports, making EVs a more practical option for everyday use. Furthermore, advancements in battery technology are extending the range of EVs, making them more viable for longer commutes. The combination of improved battery performance and faster charging technology is also minimizing downtime for EV drivers, further enhancing the appeal of electric vehicles. Adapted from: World Economic Forum, 26 Oct 2022 & Goldman Sachs, 1 Nov 2023 Extract 2: The True Cost of Electrifying Transportation The transportation sector accounts for 29 percent of U.S. carbon emissions (and 24 percent worldwide), it’s only natural that electrification of the vehicle fleet, paired with the rapid greening of electricity production, is widely viewed as key to containing climate risk. Emissions from internal combustion engine 1 (ICE) vehicles are easy to understand. Combustion of fossil fuels creates global greenhouse gas es (GHGs) and local pollution. In contrast, the emissions associated with electric vehicles (EVs) are more complex to measure. The electricity used to charge EVs is generated through a mix of technologies, including wind, solar, hydro, nuclear, and various fossil fuels. Therefore, the p ollution associated with EVs depends on the marginal source of electricity - the power plant that adjusts its output in response to increased demand. Local pollution from traditional vehicles primarily affects respiratory health but is also linked to reduced labour productivity and cognitive performance. EVs can reduce GHGs compared to ICEs in areas where natural gas is the dominant energy source for the electricity grid. However, in regions dependent on coal, particularly in colder climates, EVs can sometimes be more greenhouse gas-intensive. While ICE vehicles emit pollutants direct