Futures

The Future of Electric Vehicles: Supply Challenges for Key Battery Metals Ahead, (from page 20220810.)

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Summary

In 2021, global electric vehicle (EV) sales surged to 6.6 million, doubling from 2020, making up 9% of the global car market. However, S&P Global warns that the electrification of transportation could stall by 2025 due to a predicted shortage of key battery metals, particularly lithium and copper. Major car manufacturers like Ford are already facing supply chain constraints, prompting them to seek alternative battery materials. The report highlights that copper is crucial for EV production, with a significant shortfall expected by the mid-2020s, raising concerns about energy security and the challenges of meeting climate objectives. Despite potential for recycling, it will not suffice to meet the growing demand for EVs, necessitating new mining and refining processes to achieve production targets.

Signals

name description change 10-year driving-force relevancy
Rising EV Sales Global electric vehicle sales more than doubled from 2020 to 2021. Transitioning from low to high adoption rates of electric vehicles. Electric vehicles could dominate the global car market, significantly reducing carbon emissions. Government policies and consumer demand for sustainable transportation solutions. 4
Battery Metal Shortages Projected shortages of key battery metals like lithium and copper starting in 2025. Shift from ample supply to potential scarcity of essential materials for EVs. Increased costs and slower adoption of EVs due to metal shortages. Rapid growth in EV production outpacing mining and refining capabilities. 5
Ford’s Battery Substitution Ford announces use of lower performance batteries to mitigate nickel supply issues. From high-performance batteries to alternative, lower-performance options. Potential decline in EV performance and consumer acceptance of alternatives. Need to meet production targets amidst material supply constraints. 4
Increased Copper Demand Battery electric vehicles require significantly more copper than traditional vehicles. Growing demand for copper driven by the shift to EVs. Copper could rival oil as a critical resource for energy security. Transition to renewable energy and electrification of transport. 5
Recycling Limitations Current recycling processes cannot meet the growing demand for battery materials. From reliance on new mining to a limited recycling capability. Continued dependence on mining for materials, despite recycling efforts. Exponential growth in EV sales versus slow growth in recycling capabilities. 4
Political Restrictions on Mining Political shifts in countries like Chile may restrict new copper mine developments. From open mining policies to more restrictive regulations on copper extraction. Increased difficulty in sourcing essential materials for EV production. Environmental concerns and political changes impacting mining operations. 4
Repurposing EV Batteries Growing market for repurposing EV batteries in stationary storage applications. Shift from recycling focus to repurposing for energy storage. EV batteries may provide significant value in new energy sectors rather than recycling. Demand for energy storage solutions and cost-effective battery reuse. 3

Concerns

name description relevancy
Battery Metal Supply Shortages Demand for key battery metals like lithium and copper may exceed supply by 2025, hindering EV production and adoption. 5
Increased Production Costs Rising costs of battery materials may lead to higher prices for electric vehicles, impacting consumer adoption rates. 4
Insufficient Recycling Solutions Current recycling efforts for EV batteries are inadequate to meet future demands for battery materials, worsening supply issues. 4
Copper Scarcity and International Security Copper shortages could become a major national security concern, destabilizing economies due to reliance on this essential metal. 5
Political and Regulatory Barriers to Mining Political changes in copper-producing countries may restrict mining projects, exacerbating supply shortages. 4
Electric Grid Strain Increased demand for power transmission alongside EV adoption may strain existing electrical infrastructure, causing reliability issues. 3
Delay in New Mining Permits Long permitting and construction timelines for new mines may delay the response to rising metal demand, worsening shortages. 5
Environmental Opposition to Mining Resistance from conservationists against new mines may limit the availability of critical metals for batteries, impeding EV growth. 4

Behaviors

name description relevancy
Increased EV Adoption The rapid growth in electric vehicle sales indicates a strong shift towards sustainable transportation solutions. 5
Battery Material Substitution Car manufacturers are beginning to substitute key battery materials like nickel and cobalt with more abundant alternatives like lithium-iron-sulphate. 4
Concerns Over Metal Scarcity Rising demand for battery metals such as lithium and copper raises concerns about supply shortages impacting EV production. 5
Recycling vs. Repurposing Batteries The trend is shifting towards repurposing EV batteries for stationary storage rather than traditional recycling methods due to cost issues. 4
Supply Chain Resilience Measures Manufacturers are seeking to strengthen supply chains by exploring new mining projects and refining processes for metals needed in EVs. 4
Regulatory Impact on Mining Political changes in key copper-producing countries are affecting the approval and expansion of new mining projects. 4
Long-term Supply Strategy The need for a robust climate strategy that incorporates the supply side of critical metals is becoming increasingly urgent among policymakers. 5

Technologies

name description relevancy
Electric Vehicles (EVs) Battery-powered vehicles aiming for widespread adoption to reduce carbon emissions. 5
Lithium-Iron-Phosphate Batteries Batteries that substitute nickel and cobalt, reducing reliance on scarce materials. 4
Stationary Power Storage Repurposing EV batteries for energy storage, extending their useful life beyond automotive use. 4
Copper Recycling Efforts to recycle copper from EVs to meet demand amidst looming shortages. 3
Battery Recycling Technologies Innovative processes to recycle EV batteries for material recovery, though currently limited in capacity. 3
Bauxite Mining for Aluminum Substitution Consideration of aluminum as a potential substitute for copper in certain applications. 2

Issues

name description relevancy
Supply Chain Constraints for EV Battery Metals The projected demand for key battery metals like lithium and copper may exceed supply, impacting EV production. 5
Copper Scarcity as a National Security Concern Increasing scarcity of copper could emerge as a destabilizing factor for international security and energy policies. 5
Challenges in EV Battery Recycling Existing recycling methods for EV batteries are insufficient to meet future metal demands, necessitating new mining operations. 4
Political and Regulatory Barriers to Mining New political climates in major copper-producing countries may restrict mining operations, exacerbating supply shortages. 4
Substitution Issues in Battery Manufacturing While some metals can be substituted in EV batteries, copper has no viable alternatives, posing significant challenges. 5
Long Permitting Times for New Mines The lengthy process for permitting and constructing new mines may not align with the urgent demand for copper and other metals. 5
Shift in Market for Used EV Batteries The potential shift towards repurposing used EV batteries for stationary energy storage rather than recycling. 3