Battery materials: solving the challenges of the electromobility revolution
Battery material producers are positioned to capitalize on the growing demand for electric vehicles. But could the looming shortage of energy conversion materials restrict their growth?
“The challenge is, these gigafactories require a lot of raw materials to make batteries on a large scale. And the projected shortage of key materials in batteries, such as lithium, nickel and graphite, as well as electrical steel and rare earths for magnets, is a direct threat to EV production targets.”
What steps can battery market participants take to guarantee future supply?The raw material shortage in mining
According to Oudenijeweme, part of the problem lies with the world’s miners underinvesting in new mines, which is in part due to the impact of ESG challenges.
“In regions such as Chile and Bolivia, which are rich in lithium reserves, exploration activities are being delayed due to public unrest over environmental issues,” he says. “As a result, the world’s top 10 mining companies only invested around US$20bn in mining projects in 2023. This is half of the US$40bn in 2016.”
Localizing the batteries supply chain
Oudenijeweme notes that the batteries supply chain has historically relied on supply from all over the world, including China.
“Chinese companies have successfully ensured raw material supply through long term offtake agreements and strategic investments,” he says. “One example is Ganfeng Lithium, which through a strategic acquisition, is now one of the largest lithium miners and refiners in the world. Recently it invested US$3.1bn to expand its capacity across three lithium battery plants, becoming fully vertically integrated.” The reliance on a concentrated supply chain is not the issue, nor is the level of investment required. However, governments across the world with significant end markets and industries to protect want to capitalize on this opportunity.North America and Europe are looking to stimulate local industry growth. Their actions range from research and development support and capital grant incentives to the influential Inflation Reduction Act.
On the other end of the value chain, countries such as Indonesia, Australia, Canada, and Chile, which have significant resources of nickel, lithium, copper, and other valuable raw materials, are keen to benefit from the EV revolution.
Reducing raw material demand while increasing supply
Strategies for success for battery cell manufacturers
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