Cobalt, nickel, other battery metals face supply crunch by 2020s — WoodMac

Growing global demand for batteries that power electric vehicles (EVs) and high tech devices is set to cause a supply crunch of lithium, cobalt and nickel by mid-2020s, global consultancy Wood Mackenzie predicts.

The firm’s latest research shows that sales of passenger EVs, including hybrid electric vehicles (HEV), jumped by more than 24% last year. And while HEVs had the smallest growth, they made up over 60% of EV sales.

WoodMac expects global sales of EVs to account for 7% of all passenger car demand by 2025, 14% by 2030 and 38% by 2040.

“Battery pack sizes continue to trend larger through the medium term, resulting in overall greater battery demand. We have seen the first announcements of the commercialization of NMC 811 cells in EVs,” says Gavin Montgomery, WoodMac research director.

Unsurprisingly, Montgomery notes, China was the first market mover, but a number of other nations and companies are moving towards mass production of 811 cells before the end the year. 

South Korean SK Innovation, for once, is already in talks to set up separate battery-making joint ventures with Volkswagen AG and Chinese partners, as part of the petrochemicals producer’s aggressive plans to tap into the EV market.

“While still conservative on mass market uptake for [811 cells], we are more optimistic in regards to adoption. As such, we expect to see an increased nickel demand at the expense of cobalt, and to a lesser extent, lithium,” the analyst says.

Most car makers, including VolkswagenFord MotorToyota and BMW have already stated they would go completely electric by 2050.

WoodMac warns that, unless battery technology is developed, tested, commercialized, manufactured and integrated into EVs and their supply chains faster than ever before, it will be impossible for many EV targets and ICE (Internal Combustion Engines) bans to be achieved. “This will pose issues for current EV adoption rate projections,” Montgomery says.

Lithium prices to fall further

In the past year, spot prices for lithium carbonate have fallen by just under $7000 a tonne, affecting top producers and juniors alike.

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