Raw material supply chain constraints of key metals needed in EV batteries could be felt as soon as the mid-2020s, according to Woods Mackenzie’s Global Battery Raw Materials Long-Term Outlook.
“It will be impossible for many EV targets to be achieved” on the current path, says Wood Mackenzie research director Gavin Montgomery.
The report talks about three key metals, lithium, cobalt, and nickel. While current supplies of these metals are enough to meet demand, the boom in electric vehicle production over the next few decades is expected to eat into metal supplies quickly.
According to Green Tech Media, the report suggests that part of the reason for the upcoming supply crunch is because pricing for these metals has fallen in recent months and this has deterred producers from ramping up production. As an example, spot prices of lithium carbonate have dropped by almost $7,000 per ton since June 2018, or by around 40 percent.
Cobalt, which mostly comes from the troubled Democratic Republic of the Congo, has dropped “more with a crash than a steady decline” in the first half of 2019, Montgomery said.
Nickel has turned out to be an increasingly popular element due to battery technology dubbed NMC (lithium, nickel, manganese, cobalt oxide). However, this metal is also being hit with low pricing that has deterred investment in any new production.
The most expensive component in an EV is the battery. So making batteries cheaper without compromising the quality and properties has been the focus of cost-reduction efforts in the industry. And without a doubt, any shortage of the raw materials that go into making the batteries would interfere with these efforts and the effect could be long-lasting.
A recent analysis by John Petersen, a non-executive director at the manganese mining firm Giyani Metals, cited cobalt, in particular, as being at risk because China controls most of the supply that goes into batteries.
“At some point in the back half of the next decade, there won’t be a reliable cobalt supply chain for any non-Chinese company that makes batteries for transportation and stationary applications,” Petersen predicted.
The bottom line in all this leads us to the obvious conclusion. Current supplies of raw materials are adequate going forward, however, now is the time to be investing in the production of metals needed to meet future supply demands. We also need to invest in technologies and regulations to support battery recycling and second-life applications.
