Battery Metals Report 2022/10 - Update
For many years, Tesla Motors was alone in researching, developing and finally building electric cars and the batteries needed for them, but today practically every well-known automaker has hybrids or pure electric vehicles in its range. Nevertheless, the industry is still in its infancy in terms of unit sales, even though registration figures have picked up noticeably recently. While only around 125,000 pure electric vehicles and (plug-in) hybrids were registered worldwide in 2012 (market share of all registrations: 0.2%), this figure had already risen to 3.24 million by 2020 (market share: 4.2%). In 2021, registrations then exploded by over 100% to 6.75 million newly registered e-cars (market share 8.3%). For 2022, the British battery sector analyst Rho Motion expects a further fulminant increase in e-car registrations to 10.3 million units (market share 12.6%). By 2025, e-car registrations are expected to double again, to 20.9 million units per year. At the same time, the capacities of the lithium-ion batteries required continue to rise, from around 46 KWh in 2022 to around 54 KWh in 2025. Figures that make one thing quite clear: In the coming years and decades, the demand for the elements and especially metals required for battery production will develop in an almost explosive manner. Corresponding, massive supply deficits are therefore inevitable, as the mining industry will no longer be able to keep up with production.
For almost all elements that go into batteries, such a supply shortfall is already becoming apparent, even before the big leaps in unit sales come.
These include primarily the battery metals lithium, nickel, manganese and cobalt, as well as copper and graphite. Some of these materials have so far hardly been used in conventional models with internal combustion engines, or in some cases in significantly smaller quantities. The prices for most of these materials and metals have therefore already skyrocketed. In the case of lithium and nickel in particular, the mining industry is miles away from being able to satisfy the coming demand volumes. This became all the more apparent when Tesla CEO Elon Musk literally begged corresponding mining companies to develop new nickel mines in 2020.
The International Energy Agency (IEA) goes even further, recently stating in a high-profile report that the industry will need to bring 50 more lithium mines, 60 more nickel mines and 17 more cobalt mines on stream by 2030 to meet global net carbon emission targets. It is important to note that such mines take 10 years from the initial discovery of a relevant deposit to first production. Accordingly, the de facto supply deficit already existing for battery metals is expected to widen massively in the coming years, which will inevitably lead to higher prices for these metals.
For investors, this is therefore an excellent opportunity to enter the world of battery metals right now.