a supply crunch for battery materials is looming
As car manufacturers ramp up production of electric cars, the metals used to
make the vehicles’ batteries may face a supply crunch in the next few
years, according to a new report.
solar street light lithium battery Lithium, cobalt, and nickel supplies are expected to be worst hit, the Wednesday
report from energy consulting and research firm Wood Mackenzie. That’s
as analysts predict a boom in electric vehicle use over the next three
decades, but cite limited new metal production.
For now, supplies of those three metals are enough to meet demand, according to Gavin
Montgomery, research director at Wood Mackenzie. But short-term market
prices of those metals have fallen, and that will deter producers from
increasing supply to meet future demand, he added.
In fact, in the next few years, demand for the metals is expected to grow so rapidly —
as car producers make more electric vehicles — that suppliers won’t be
able to keep up, Montgomery noted.“It’s dawning on North America and
Europe that there’s a raw materials issue that needs to be addressed
here,” leading metals company CleanTeQ’s chief executive officer, Sam
Riggall, told Bloomberg in early July.
Furthermore, limited amounts of lithium, cobalt, and nickel exist on Earth, so there may
simply not be enough to meet car manufacturers’ future demand.
“Getting the quantity of nickel that (electric vehicles) will need by the
mid-2020s will be a challenge ... with lead times often up to 10 years,
investment needs to happen now,” said Montgomery.
Car buyers’ shifting tastes partly explain why manufacturers are demanding more of
those metals. Customers have been turning toward electric vehicles,
rather than traditional gasoline-powered ones, in recent years.Wood
Mackenzie said it expects electric vehicle sales to continue rising. In
fact, by 2025, electric vehicles will make up 7% of all passenger car
sales, according to Montgomery. By 2040, that figure will hit 38%, he
predicted.
Currently, electric vehicles only make up 0.5% of the world’s vehicle fleet, Bloomberg estimated in a 2019 forecast. But, as
Montgomery predicted, “most automotive manufacturers plan to go
completely electric by 2050.”
Despite the predictions of a supply crunch for the likes of nickel, lithium and cobalt, the global supply
for graphite and manganese, two other metals required for electric
vehicle batteries, is expected to be sufficient.
