Review of 2024 EV Market: Problematic Carbon Credits & Environmental Progress

The electric vehicle (EV) market has become a booming symbol of hope in the fight against climate change, and 2024 is no exception. With an estimated 15 million EVs sold this year, the industry continues to break records for adoption. But beneath the surface, disillusioning flaws in the industry persist, from the ethics of carbon credits to the environmental costs of materials used for EVs. So, how far have we really come, and is the EV market solving more problems than it creates?

Carbon Credits: A Forceful Proponent

A key driver behind the EV industry’s growth is carbon credits. Carbon credits are a currency automotive manufacturers earn by selling EVs and are used to allow the company to produce pollutive gas vehicles. These credits are enforced by most governments and cause companies to have a percentage of their produced vehicles be EVs. By having too little carbon credits, a company will have to buy the rest to hit their quota, by having too many a company can sell the excess. Tesla alone has reportedly earned over $1.7 billion from selling carbon credits in 2024, which has helped finance its expansion and price cuts on its models. However, critics argue that this system is chasing a temporary solution that fails to address root issues. Carbon credits may be intended to lead towards a greener future, but beyond forcing EV production they do little to incentivize systemic shifts toward sustainable manufacturing and infrastructure.

Benefit: Lifelong Pollution

EVs remain significantly better for the environment than internal combustion engine (ICE) vehicles over their lifecycle. Studies show that a typical EV emits 50-60% less CO₂ over its lifetime compared to a gas-powered car. Additionally, EV adoption has contributed to reduced urban air pollution and decreased dependency on fossil fuels, a win for public health and energy security.

Yet, not all is as green as it seems. The surge in demand for EVs has created its own set of environmental and ethical concerns.

Major Flaws: Cobalt Mines and Rare Earth Metals

At the heart of every EV battery lies a need for cobalt, lithium, and nickel—metals extracted in mining operations with significant environmental and human costs. Cobalt, in particular, is sourced heavily from the Democratic Republic of Congo, where child labor and unsafe working conditions remain rampant. Rare earth metals, vital for permanent magnets used in electric motors, come with their own environmental toll, as mining these materials devastates ecosystems and generates toxic waste.

Efforts to reduce reliance on these materials, such as Tesla’s move to use iron-based batteries in standard-range models, have made strides but fall short of eliminating the problem. Recycling initiatives and second-life battery programs are expanding, but these solutions are not yet at a scale to counterbalance the sheer demand for new raw materials.

Chasing the Temporary or Permanent Solution

In their current form, EVs are not a permanent solution because they cause still massive problems with their demand for pollutive materials. This creates questions like when will the EV industry become less pollutive and was it right to push an incomplete solution? Currently, the carbon credit system does not place punishment on pollutive production and materials used for EVs. So, when will that change because "Patching up cracks won't hold a building together; it needs a solid foundation". This quote is a useful allusion towards the ambiguous current legislature around carbon credits which has decided to push an incomplete solution.

Analyze the statistics:

• A mid-size EV produces around 25% more CO₂ during production than a comparable gas car due to its battery.

  
  

• Over its lifespan, an EV offsets this initial carbon debt after 1-2 years

  
  

• However, EV production requires up to 5 times more mineral resources by weight compared to ICE vehicles.

  
  

• EV vehicles use rare earth minerals and cobalt which cause pollution, toxic mining and more, that are not used in ICEs

  
  

Rethinking the EV Revolution

The 2024 EV market is at a crossroads. Should we continue expanding the current EV model and improve incrementally, or pause to develop cleaner, permanent solutions? Advocates argue that waiting for perfection is a luxury the planet cannot afford. Yet, there is merit in pushing for innovations like solid-state batteries, which avoid the use cobalt, or renewable-powered manufacturing processes that truly decarbonize supply chains.

In my view, the EV market’s should continue its expansion but with new enforced standards. These standards would regulate the use of rare earth materials and cobalt, and pollutive production techniques. These standards would be the same as carbon credits, tradable and a transferable token for pollution. Progress is real and incremental; we are never going to get it right the first time, but its important we try.