As electric vehicle production ramps up worldwide, a supply crunch for battery materials is looming
- As car manufacturers ramp up production of electric cars, metals used to make the vehicles’ batteries may face a supply crunch by the mid-2020s, according to a Wood Mackenzie report released Wednesday.
- Lithium, cobalt, and nickel supplies are expected to be worst hit.
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.
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.
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.
Montgomery isn’t the only one predicting a future supply crunch.
“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.
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