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Major problem rears its head in the quest for electric powered vehicles
The cost of the precious metals used in vehicle batteries has risen tenfold as as demand increases – and this could massively affect production Trevor Gehlcken reports
The quest to to to to move all our vehicles
vehicles
– – cars vans and trucks – over to zero emissions technology was never going to be easy Already we have encountered problems of where to charge electric vehicles
and how many miles they can travel on
a a a single charge not to mention the extra front-end cost of of vehicles
and the the price of of the the electricity they consume But now an unseen problem is beginning to emerge – and it’s one that few seem to have anticipated although it’s pretty obvious now it it has reared its ugly head Increasing demand for minerals used in in in electric vehicle batteries such as lithium nickel and cobalt is pushing up prices massively and threatens to disrupt production as more more and more more batteries are needed The warning from industry analysts comes as lithium prices have risen tenfold to £61 000 a a tonne since the start of 2021 Bloomberg Intelligence in its Europe Autos Outlook report says that escalating battery battery costs and and battery battery demand could be the industry’s next bottleneck after suffering problems with disruption from the semi- conductor shortage To meet soaring global EV demand the International Energy Agency forecasts the sector will require 50 new lithium projects 60 nickel mines and 17 cobalt developments by 2030 Owen Edwards head of downstream automotive at Grant Thornton UK said: “It is not clear whether there will be sufficient supply of raw materials to satisfy demand ”
Tesla leads the way
Tesla has led the way
in in securing
raw materials for batteries but several manufacturers frustrated by supply chain disruption have recently stepped up up their own efforts to secure resources by going directly to producers General Motors agreed to to pre-pay Livent a lithium mining group £164m to secure supplies while Ford is funding Liontown
Will the rising cost of precious metals used in in batteries hit plans to achieve net zero?
“It is not clear whether there will be sufficient supply of raw materials to satisfy demand”
Resources to develop a lithium mine Furthermore Stellantis has taken a a a a £43m equity stake in Vulcan Energy Resources which aims to produce lithium in Germany Mercedes-Benz meanwhile has agreed to buy future output from suppliers to help raise financing and has begun work on
its own processing facilities Gap risk addressed
Mining expert Lenaig Trenaux said these moves addressed
any risk of a a a a gap in supplies However she warned that the supply of raw materials remained a a a a a a challenge and there was a a a need for further investment in in in in the mineral sector to to meet increasing demand Investment also needed to be across the value chain she said “You have to extract the minerals from the ground but you also need to to process them before they can be be put into
a a a a battery ”
she explained “Take lithium for example You have a a a a lot of lithium deposits all over the the world but the the processing capacities today are mostly in in China It’s a a a a a challenge that needs to be addressed
”
Lenaig also highlighted how many of the minerals crucial to the chemistry of an EV battery are in in challenging places both politically and environmentally Three quarters (75%) of the world’s cobalt production for example comes from the Democratic Republic of the Congo (DRC) “It is not an easy country to deal with so that’s another challenge ”
she said Accelerating production will be key but she explained that this also needed to be done in in a a a a a sustainable manner without “any shortcuts” Massive part of cost Industry estimates suggest that the battery accounts for between 40-60% of a a a battery electric vehicle (BEV) price while 60% of the battery cost is estimated to to be down to to the minerals As a a a result Grant Thornton and Cox Automotive say rising raw material costs are increasing retail prices Philip Nothard insight and strategy director at at Cox Automotive explained: “Due to to ‘pass-through’ contracts battery manufacturers do not have to pay the cost of raw material price hikes These are paid for by OEMs “Not wishing to see margins drop significantly vehicle OEMs have been forced to to pass on
on
on
the additional cost to to consumers ”
Electric power November2023CVDriver 21