RI 2025 H2 Preliminary Examination - Paper 1 (Final)

9570/01/Prelims/Y6/25 © RI 2025 [Turn over RAFFLES INSTITUTION 2025 YEAR 6 TERM 3 PRELIMINARY EXAMINATION Higher 2 ECONOMICS 9570/01 Paper 1 Case Study Questions 2 September 2025 2 hours 30 minutes Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and civics class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. Start each Case Study on a fresh sheet of paper. At the end of the examination, fasten your answers to Case Study 1 and Case Study 2 separately. Detach this cover page and secure it in front of answers to Case Study 1. Question Marks Name: __________________________ Civics Class: _____________________ _____________________ 1 /30 Economics Tutor: ________________ 2 /30 This document consists of 10 printed pages and 1 blank page. H

2 9570/01/Prelims/Y6/25 © RI 2025 [Turn over BLANK PAGE

3 9570/01/Prelims/Y6/25 © RI 2025 [Turn over Question 1 Electric Vehicles Table 1: EV Battery Price and EV Sales Source: Various Table 2: EV Firms – Profits (2023) Source: Various Table 3: Lifestyle carbon emissions per km driven Source: ICCT 2025 Average EV Battery Prices (US$/kWh) Global Electric Vehicle Sales (million units) 2019 $120 2.08 2020 $110 2.97 2021 $99 6.60 2022 $129 10.20 2023 $139 13.7 Firm Country Profits (US$ billions) BYD China $4.23 NIO China - $2.92 Rivian USA - $5.43 Tesla USA $15 XPeng China - $1.46 Vehicle Type C02 emissions /km Battery EV 63g Petrol car 235g Diesel car 220g

4 9570/01/Prelims/Y6/25 © RI 2025 [Turn over Extract 1: How China’s Electric Vehicle Boom Powers Its Tech Rise NIO is just one of an alphabet soup of Chinese brands —from AION, BYD, and Clever, to Maxus, Neta, and Onvo, to Xpeng, Yangwang, and Zeekr —dominating the global electric vehicle (EV) market today. When it comes to EVs, China already accounts for nearly two -thirds of global sales (62%). NIOs are currently sold in six European nations as well as Israel and the UAE. BYD, meanwhile, is now undisputedly the world’s top EV firm, present in over 70 countri es and outselling Tesla globally for a second straight quarter. While Tesla delivered 336,681 vehicles worldwide for the January–March period, down 13% year-on-year, BYD delivered 416,388, up 38%. China's success in vehicle electrification is attributable to supportive government policies that subsidise EV manufacturing. Experts say sales of EVs in China will help its government achieve its climate change goal to hit peak CO2 emissions before 2030 a nd to reach carbon neutrality by 2060. The U.S. and allies accuse China’s industrial policies of massive subsidies that cause overcapacity and crowd out competitors. Chinese government support to its EV industry cumulatively totaled $230.9 billion from 2009 to 2023, according to the Center for Strategic and International Studies (CSIS), a bipartisan D.C. think tank. However, to simply blame state subsidies for China’s mastery of EVs is reductive. Time and again, whether it’s smartphones, solar panels, or 5G, China has been relying on a fiercely competitive and huge domestic market to command transformative technology. Moreover, China’s dominance in the EV battery supply chain is substantial. The country produces over 70 percent of the world’s lithium-ion batteries, holding a similar share in refining, processing, and manufacturing stages. And China’s control over crucia l minerals such as cobalt and graphite further strengthens its position. Source: Adapted from Time Magazine, 29 May 2025 Extract 2: BYD faces growing backlash over EV price war BYD shares continued their plunge despite monthly sales climbing to the highest in 2025 as the steep discounts the industry uses to entice buyers draw scrutiny from Beijing. BYD stock dropped almost 5 per cent in Hong Kong on June 2, which follows a more than 15 per cent slump last week, after a series of reports over the weekend indicated the industry’s lengthy price war has caught the attention of the government. In a commentary on June 1, the People’s Daily warned that price wars can lead to low-quality products that would seriously damage the international reputation of “Made-in-China”, it said, without naming any specific companies. Over the weekend, China’s automobile industry association warned against “vicious competition” that would hurt profit margins and hinder the healthy development of the industry. Source: The Straits Times, 2 June 2025

5 9570/01/Prelims/Y6/25 © RI 2025 [Turn over Extract 3: BYD’s annual sales top $100bn BYD’s annual sales have topped $100bn for the first time, as China’s EV champion dominates its domestic market and presses ahead with an overseas expansion. Unlike its US rival Tesla, which only sells fully electric vehicles and reported revenue of $98bn last year, BYD has benefited from resurgent demand in China for hybrid vehicles. BYD also pushed ahead with an aggressive expansion outside China, betting that it can undercut legacy carmakers such as Volkswagen and Toyota in markets from Europe to south-east Asia. Following a years-long price war in China, the world’s largest EV market, BYD has also started to shift from an aggressive pricing strategy that was designed to win market share to one focused on trying to boost its profitability. “Leading players in the market, including BYD, have moved away from a ‘price -for-volume’ approach”, said Serena Shen, an auto analyst at S&P Global Mobility. “Instead, they attempt to raise retail prices by innovating and updating their models.” Founder Wang Chuanfu last week unveiled a battery charging system that the company said would allow customers to charge EVs in five minutes, helping send its shares to a record high. Source: Financial Times, 24 March 2025 Extract 4: How problematic is mineral mining for electric cars? In the deserts of Chile, the Australian outback and the plains of the Democratic Republic of the Congo, the earth is being peeled back and the water sucked up and dried out to find the minerals needed to feed the world’s need for electric cars. The extraction of battery materials is due to expand on a grand scale. That will leave a trail of mining – often with local environmental degradation – in its wake. Mineral demand for heavy batteries will grow rapidly. The International Energy Agency estim ated that EVs use 173kg more minerals such as lithium, nickel and copper than petrol cars . The data company Benchmark Mineral Intelligence forecasts global demand for lithium, the key battery metal, will quadruple to 3m tonnes in 2030, outstripping supply. Yet overall, the mineral use for EVs is much, much lower than petrol and diesel as soon as oil enters the equation. Transport & Environment (T&E), a Brussels -based thinktank, found that a petrol car will burn an average of 17,000 litres of oil in its lifetime – about 12.5 tonnes. And most criticisms of EVs’ mineral use miss a hugely important point: the majority of battery materials used in cars are likely to be recycled. That will drastically cut down the amount of wasted material compared with fossil fuels which disappear invisibly but harmfully to heat the planet. Julia Poliscanova, T&E’s senior director for vehicles and e-mobility, said: “By 2030 we will need around 30m tonnes of critical minerals [for batteries]. It’s very, very substantial, but if we put this in comparison, we used in one year 15bn tonnes of fossi