The EV transition will require major investments across the board if the possibility presents itself: investment in domestic production of EVs, robust charging infrastructure, and most importantly, mining capacity. The latest report from industry insiders and investors, UP Partners, is equal parts optimistic and pessimistic about the coming years: On the one hand, EVs are on track for mass adoption in the biggest auto markets. of the world. But on the other, that trajectory will strain our current modest supply of raw materials and battery metals.
It appears EVs are stuck between the extremes of expected demand and actual supply of resources needed to see major markets through the transition. To produce the electric vehicles that the United States and China plan to build by the end of this decade, the global industry will need three times as much lithium as currently available.
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THE Moving world it is estimated that we will need over two million tons of lithium carbonate to meet demand. And while lithium is the focus of most studies, a general lack of raw materials including nickel, cobalt and lithium does not bode well for the shift to electric vehicles. There is a deficit of all three.
What we have is a Catch 22 whereby the proliferation of EVs will ironically become a problem as resources run out. As previously reported, the price of lithium increased by 800% in two years, from 2020 to 2022. The high price of battery metals and other materials is only indicative of their scarcity.
Before we split hairs on estimates or forecasted demand (because I’m also suspicious of speculating reports), we should note that the projections are pretty solid. The report is based on the assumption that any new technology gains critical mass after passing a five percent adoption rate, which electric vehicles have now done in the United States and China. The report adds that the current rate of adoption will see EVs make up 50% of all car sales in America well before 2030.
After all, all that manufacturer nonsense about the glorious future of EVs wasn’t just nonsense. Yet one of the biggest obstacles to EV proliferation will be that EVs will stumble upon each other for raw materials unless the United States and other countries can ramp up their mining capacity, which can take more than a decade.
Of course, it’s not all bad news: there are a couple of things that can help mitigate the lack of resources in the world. Higher energy density in new battery packs may help balance the lack of materials, unless people take dense battery packs as an invitation to request more range
Another way around the limited supply is to make sure the auto industry becomes much more efficient when it comes to recycling. One benefit of more EVs on the road is that there will also be more EVs going off the road and ending up in landfills where their parts can be collected.
A circular economy could produce a good part of the missing materials. THE Moving world the report estimates that China “generated about 500,000 tons of used lithium-ion batteries” in 2020. By 2030, that number will rise to about two million tons annually.
The report goes on to say that materials recycling will be led by startups. Right now, only five percent of used lithium batteries are recycled, so that means a staggering 95 percent of used batteries go unused. That leaves the proverbial barn door open for automakers and governments around the world to step in and start recycling. At least in the meantime, while those metal battery mines in America and beyond go online.
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