In 2021, global electric vehicle sales reached 6.6 million, representing a significant increase from the previous year. This growth is positive in terms of decarbonization efforts. However, the future of electric transportation may face challenges as early as mid-decade. The demand for key battery metals is projected to exceed supply, leading to increased costs in EV battery manufacturing. Car manufacturers are already experiencing supply chain constraints and resorting to substitution materials. The shortage of lithium and copper is particularly concerning for the EV market. The scarcity of copper, in particular, poses a threat to achieving Net-Zero Emissions by 2050. Recycling is not a sufficient solution to meet the growing demand for battery materials. The time required to establish new copper mines and the potential restrictions on mining in countries like Chile further exacerbate the issue. Policymakers and industry leaders need to prioritize addressing the supply side challenges of critical metals to ensure the sustainable growth of the electric vehicle market.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Global electric vehicle sales double in 2021 | Increase in EV adoption | Increased demand for EVs | Decarbonization goals and environmental awareness |
| Demand for battery metals exceeds supply by 2025 | Potential stalling of EV adoption | Higher costs for EV battery manufacturing | Increased demand for EVs and limited supply of key battery metals |
| Car manufacturers resorting to substitution materials | Substitution of key metals in EV production | Lower performance batteries used in EV vehicles | Supply chain constraints and limited availability of key metals |
| Lithium shortage predicted by 2025 | Potential shortage of lithium supply | Insufficient lithium supply for growing EV market | Increasing demand for lithium and limited supply |
| Copper scarcity poses a threat to international security | Scarcity of copper for EV production | Limited supply of copper for EVs and power transmission | Energy transition, increased EV demand, and power grid investments |
| Insufficient copper supply for projected EV demand | Shortfall in copper supply for EV production | Limited availability of copper for EVs and power transmission | Increased demand for EVs and limited copper mine production |
| Recycling will not meet the demand for battery metals | Inadequate recycling for necessary metals | Recycling cannot keep up with growing demand | Growing demand for battery metals and limitations of recycling |
| Repurposing used EV batteries for stationary storage | Repurposing batteries for stationary power storage | Increase in demand for used EV batteries in stationary storage | Lower cost and longer lifespan for used batteries in stationary storage |
| Insufficient time for new copper mine development | Limited time for new copper mine construction | Insufficient copper mine development to meet demand | Long permitting and construction process for new mines |
| Potential restrictions on copper mining in Chile | Potential restrictions on copper mining | Limited copper supply due to mining restrictions | Political decisions and environmental concerns |
| Need for attention on critical metals supply | Importance of critical metals supply for climate strategy | Focus on supply side of critical metals | Policymakers’ awareness of supply limitations |