Global EV sales will reach 6.6 million in 2021, more than doubling from 3 million in 2020, meaning EVs will account for 9 percent of the global car market.
A detailed analysis recently completed by S&P Global, The Future of Copper, expects demand for key battery metals to outstrip supply starting around 2025, leading to higher EV battery manufacturing costs and higher costs. hinder the popularization of electric vehicles.
In fact, automakers are facing supply chain constraints for certain critical metals and they are looking for alternative materials.
Ford Motor Co. has announced that some electric vehicles will switch to lower-performing batteries in an effort to address nickel supply issues while meeting production targets. Some of these standard-model EVs will feature lithium-iron-sulfide batteries that do not contain nickel or cobalt.
Meanwhile, the International Energy Agency (IEA) has warned of a lithium shortage around 2025.
The World Economic Forum (WEF) believes that mine lithium production can meet the production needs of 11.4 million electric vehicles in 2021.
If EV sales double over the next few years, EV lithium demand will exceed current global supply unless new mines and smelters come online by then.
The biggest concern, however, is copper. The energy transition and growing demand for electric vehicles are the biggest contributors to copper shortages, even as power transmission puts pressure on copper supplies.
The copper consumption of battery electric vehicles is 2.5 times that of ordinary internal combustion engine vehicles. Of these, most of the copper is used in motors and some in batteries.
With S&P forecasting 27 million electric vehicle sales in 2030, it's clear that there won't be as many new or expanded mines to meet the copper demand for these electric vehicle production.
Like oil, copper will also become an energy security risk in some countries.
Under the pessimistic scenario, the copper supply and demand gap will almost reach 10 million tons in 2035.
Some metals used in batteries can be replaced, but copper in electric vehicles is not. Batteries, coils and motors all require copper. Even if aluminum could replace copper as suggested, it would be a shift away from mining more copper to mining more bauxite and building more aluminum plants.
Although the recycling and reuse of power batteries is necessary, it is far from filling the supply and demand gap of this essential metal.
