The rapid increase in electric vehicle (EV) sales will require a 10-fold increase in the supply of battery raw materials by 2030, according to the International Energy Agency (IEA).
Demand for EV batteries is expected to grow to 3,500gwh by 2030, up from about 340gwh today, according to an IEA report titled Global Supply Chains of EV Batteries.
Global demand for lithium is projected to rise to 500,000t by 2030, which would require 50 new average-sized mines, according to IEA projections. By 2030, nickel faces the largest increase in demand in the IEA's forecast scenario, because the dominant high nickel batteries require even more nickel than lithium. A nickel-cobalt-manganese (NCM811) battery requires seven times more nickel by weight than lithium.
Nickel demand is expected to rise by 65pc to 4.2mn t by 2030, the equivalent of about 60 new mines. Cobalt is also expected to grow by 60pc and would require an extra 17 new mines. The report estimates each nickel mine will need an average of 38,000t annual capacity, while cobalt mines would need about 7,000t annual capacity. Cobalt producers in the Democratic Republic of the Congo have already demonstrated how difficult it is to ramp up a mine in the region where much of the world's cobalt is located.
Average battery prices fell by 6pc to $132/kwh in 2021, a slower decline than the 13pc drop in the previous year. Metal prices in 2022 could see battery packs become 15pc more expensive than in 2021 if trends continue, according to the report. But at current oil price levels, EVs are expected to remain competitive.
While raw materials supply is constrained, planned gigafactory capacity is expected to be enough to supply global needs if all of the planned projects are delivered. The IEA sees the need for an additional 52 gigafactories by 2030, in its most pessimistic scenario, with a need for 90 more in a more optimistic demand scenario. According to the report, announced production from private companies is set to grow to 4.6twh by 2030, more than enough to meet those needs.
