Demand for battery raw materials to increase amid shift to electric vehicles
Global electric vehicles could account for 7% of all passenger car sales by 2025, according to UNCTAD
Global demand for raw materials used in electric car batteries is poised to increase as electric vehicle use is set to surge, according to the United Nations.
Electric vehicle production is expected to reach 23 million units by 2030, up from 5.1 million in 2018, fuelling demand for battery production.
Growing concerns over climate change and increasing efforts to lower greenhouse gas emissions have also contributed to an uptick in demand for electric batteries.
“Alternative sources of energy such as electric batteries will become even more important as investors grow more wary of the future of the oil industry,” said Pamela Coke-Hamilton, director of international trade at the United Nations Conference on Trade and Development.
The demand for cobalt, lithium and nickel –key metals used to produce electric batteries – has been growing at a rapid pace, prompting concerns of a supply crunch by the mid-2020s, according to consultancy Wood Mackenzie.
Meanwhile, electric vehicle sales, including hybrids, rose 24 per cent in 2019, the consultancy said. It forecast that global electric vehicles could account for 7 per cent of all passenger car sales by 2025, reaching 14 per cent in 2030 and taking a 38 per cent share in 2040.
The market for lithium – the most commonly-used material in rechargeable car batteries – was estimated at $7 billion (Dh25.7bn) in 2018 and is expected to reach $58.8bn in 2024, UNCTAD said in its latest report.
The UN agency also warned of possible supply disruptions to car batteries supply as resources are concentrated in a few countries that are particularly susceptible to political instability.
Nearly 50 per cent of the world’s cobalt reserves are located in the Democratic Republic of Congo, while 58 per cent of lithium reserves are in Chile. Around 80 per cent of natural graphite reserves are in China, Brazil and Turkey, while manganese ores are concentrated in Australia, Brazil, South Africa and Ukraine.
"The highly concentrated production, susceptible to disruption by political instability and adverse environmental impacts, raises concerns about the security of the supply of the raw materials to battery manufacturers,” UNCTAD said.
The UN agency called for more investment in green technologies that are less reliant on critical raw materials, that could help reduce consumers' exposure to supply shortfalls.
“Tighter markets, higher prices and increased costs of car batteries” could affect the global transition to low-carbon electric mobility, the agency said.
Updated: June 24, 2020 07:57 PM