Total passenger electric vehicle (EV) car sales, including hybrid electric vehicles (HEV), were up by over 24% last year, with hybrid vehicles making up over 60% of EV sales. Wood Mackenzie expects global electric car sales (with a plug) to account for 7% of all passenger car sales by 2025, nearly 14% by 2030 and 38% by 2040.
“Battery pack sizes continue to trend larger through the medium term, resulting in overall greater battery demand. We have seen the first announcements of the commercialisation of NMC 811 cells in EVs. Unsurprisingly, China was the first mover here, but the likes of SK Innovation are intent on the mass production of 811 cells before the end of 2019,” said Gavin Montgomery, Wood Mackenzie Research Director.
“If adoption gains speed, there will be a rising nickel demand at the expense of cobalt, and to a lesser extent, lithium,” he forecast.
Weak prices defer mining
Spot prices for lithium carbonate have fallen by just under US$7,000/t since June 2018, and analysts see some weakness in realized prices for lithium which is expected to persist throughout the second quarter of 2019. But things are bound to improve, in Mr. Montgomery view: “Lithium’s use in every lithium-ion battery type means it will have double-digit annual growth, making up over 80% of total lithium demand by 2030.”
Like lithium, cobalt prices have softened over H1 2019, with analysts warning the low prices may defer some mine projects. Moreover, swing supply coming from China is likely to keep a lid on any major price upside. “Although cobalt continues to look challenging in the long-term, the increased adoption of high-nickel batteries in EVs means the emerging deficits look slightly more achievable than previously expected,” he said.
Nickel, another battery metal, is mostly being produced in Indonesia. Although the battery sector share of nickel demand is much smaller than other metals, getting the quantity of nickel that EVs will need by the mid-2020s will be a challenge. According to Wood Mackenzie, “a low nickel price has hindered any project development and with lead times often up to 10 years,” analysts stress that “investment needs to happen now.”