Demand for Electric Vehicles outpaces the battery metal production

Almost 800 kt LCE of additional lithium would have to go online over the next five years to meet the needs of the battery sector, according to a new report by Wood Mackenzie. The market analyst's forecast is based on his own Accelerated Energy Transition (AET) scenario, which limits global warming to 2.5 degrees Celsius and which presents the idea that the electric vehicle market will need over 1 million tons of LCE in 2025 . Similarly, the report says the cobalt market should double by 2025. "To put this in perspective and meet the growing demand for electric vehicles by 2030, eight additional mines the size of Glencore's Katanga would be required," the document said. "Wood Mackenzie's AET is advancing the adoption of electric vehicles (EV) by ten years and sees EVs accounting for about 40% of passenger vehicle sales by 2030," the document said. This significantly accelerates the demand for batteries and the raw materials they contain ". Even if the battery sector currently accounts for less than 5% of total nickel demand, WoodMac's AET predicts a rapid increase to 20% by 2025 and 30% by 2030. This would require an additional 1.3 million tonnes of nickel suitable for the battery sector by 2030. As for graphite, the report predicts that the battery sector will account for more than 35% of demand by 2030, with demand increasing by 1.6 million tons by that time. "Given that spot prices for most battery metals are currently falling and miners typically charge higher prices to incentivize a new supply, trusting the natural cycle of mine development seems like a losing strategy, when the world needs a large number of EVs in a short space of time. An AET will need a helping hand to move things forward, "said Gavin Montgomery, research director at Wood Mackenzie, in a media statement. Montgomery believes that finding alternative sources of metals, including using secondary supplies through recycling, is another option available to the industry. However, he noted that current EV sales are too small to generate a large enough scrap pool to create a meaningful new source of supply by 2030. "The scrap supply will become more and more important the further we move beyond 2030, but there will be no miracle pill in the coming years," said the managing director. "With so many challenges associated with increasing supply, Wood Mackenzie said it is more likely that an alternative is to reduce the demand for these critical battery materials."