Demand for the metals used in electric car batteries has grown as more carmakers launch electric vehicles and focus their efforts on making batteries that can give drivers more miles between charges.
Added to the shortage will be the increase in the number of charging stations being built, says Moody’s Investors Service. They cite copper and nickel, particularly because of the small deficits in the supply already being seen. That deficit is expected to rise.
“Declining ore grades for copper, continued lack of investment in new mines, and the time required to bring new discoveries to production will constrain metal availability and, ultimately, the metal sector’s ability to meet growing demand from battery/automakers, particularly in the near-term,” Moody’s writes.
As for cobalt – it could see a significant deficit as early as next year, seeing as cobalt is mostly a copper or nickel product. Lithium, on the other hand, could be in oversupply beyond 2019 if electric vehicle production falls below projections.
“Given the time involved in making a greenfield investment decision and receiving necessary permits new nickel and copper mines will take at least 5–10 years, if not longer, to reach initial production ramp-up,” a note from the firm also states.
Actually, Moody’s is suggesting significant investment will be needed to meet the rising demand for these metals.
The report notes that exploration and development spending has been modest across the industry because many companies are rebuilding their balance sheets after making some “ill-timed” acquisitions during a price slump several years ago.
