An industry insider employed by a German car manufacturer has told Top Charger that demand for EV battery raw materials is outstripping supply and warned, ” things could get ugly”.
Speaking with us about the environmental footprint of lithium-ion batteries, our source, who wishes to remain anonymous, revealed there is considerable stress over the future of the supply chain and the company he works for is hoarding raw materials for a rainy day.
EV battery raw material shortages
“We are seeing most EV makers hoarding quantities of raw materials and allocating them to battery manufacturers,” says our source.
“Materials like nickel and cobalt are in short supply, but it’s lithium that has people alert. Mines take seven years to develop on average and the current mines don’t produce enough lithium to make supply meet demand in 2022.”
Our source clarified, “The global semiconductor shortage shut manufacturing lines and slowed demand in 2021. The EV battery raw material shortage will do the same. I expect a manufacturing constraint for sure. Decades of low investment in mines is catching up to an industry that is flying.”
Our findings come following a Sky News report that found the UK is playing “catch up” in the global race to domestically source vital metals.
Reuters also ran a report in July revealing that lithium and cobalt shortages could cause a problem for EV makers. In it, BMI’s George Miller forecasted a lithium deficit of 25,000 tonnes in 2021 and expects to see “acute deficits” from 2022.
In addition to lithium, nickel is in danger of shortages, with Norwegian consultancy Rystad Energy warning global demand for high-grade nickel will outweigh supply by 2024. They speculate that EV manufacturers will explore alternate battery technologies that aren’t so dependent on nickel, such as lithium iron phosphate (LFP).
With no magic solution to raw materials shortages, the automotive industry will have to make do with what it has. 2022 is shaping up to be as challenging at 2021.