Industry and commodities experts fear that the growth in electric vehicles (EVs) could be much slower than predicted due to bottlenecks in global battery market supply chains.
“People seem to think that the switch from the internal combustion engine to electric vehicles just means you plug your car in rather than fill it with petrol,” a battery industry source explains.
“But the implications for global economies and international politics are absolutely enormous. If we are to get anywhere near our emissions targets and maximise the development of EVs, we need significant investment in both manufacturing capacity and the raw materials supply chains – and we will need it soon.”
Such concerns have sparked calls in Europe for urgent investment in manufacturing capacity and raw materials supply to help the battery industry respond to what is expected to be a huge rise in demand.
In Germany alone, the number of EVs on the roads has been predicted to rise from 100,000 today to between six and eight million over the next 10 years.
Fast-growing demand
What is more, battery manufacturers and their raw materials suppliers are facing fast-growing demand from the expanding renewable energy sector and smartphone producers. In response, Eurobat – the Association of European Automotive and Industrial Battery Manufacturers – has called on authorities to increase political, regulatory and financial support for the sector, including expansion of funding schemes for all battery technologies.
In its manifesto, the organisation wants the European Union to “ensure access to the key raw materials for battery production through trade agreements with third countries and the boosting of recycling of new battery technologies”.
Speaking at the manifesto launch, Gerassimos Thomas, deputy director
general of the European Commission’s DG Energy, said: “If we are to meet our emission targets, we need to be able to store ten times more renewable energy than we do today and batteries will play a key role in this process.”
The Commission believes that by 2025, the European battery market could be worth around €250 billion per year – roughly the same size as the Danish economy. For that to happen the market will need between ten and twenty major new factories at a total investment of around €20bn.
But even if that level of investment is delivered quickly, battery manufacturers could still struggle to meet the needs of the EV sector without deals to ensure secure supplies of raw materials, especially cobalt.
Investment level
David Merriman, manager of the battery and electric vehicles materials division at consultant Roskill, said: “Future raw material supplies really depend on the level of investment going into the industry. We are talking about tens of billions of dollars and we will need that investment to come soon.”
Car manufacturers may need to get involved in investment if they are to get the batteries they need. Of most concern is the global supply of cobalt, which helps the cathodes in the lithium-ion batteries typically used in EVs concentrate a lot of power in a confined space.
The problem is that about 60% of the world’s cobalt comes from the Democratic Republic of Congo (DRC). Because of human rights concerns surrounding mining operations in DRC, and fears about the reliability of future supplies, many car and battery manufacturers are researching ways to reduce their use of cobalt or to ensure that they are sourcing it ethically.
German automaker BMW has reportedly been talking to suppliers amid concerns about cobalt supplies, and is also putting €200m into a new research centre for car battery technology in order to ensure its ‘resource independence’ in the future.
But for the moment, secure supplies of cobalt – along with lithium, manganese, nickel and natural graphite – will remain critical to the EV battery sector.
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