Will the electric vehicle metals boom last?
Metals used in electric vehicles (EV, PHEV or BEV), mainly lithium, cobalt and copper, are highly demanded as they are at the forefront of a revolution in the automotive industry. Stringent regulations, States’ support schemes, and customers’ willingness to buy and own EV are bolstering demand for these vehicles. However, imbalances between supply and demand are pushing prices higher, while EV market shares have not overtaken that of traditional engines. Therefore, we do not expect major downside risks on prices for the two coming years (when compared to 2020 levels). Market imbalances between supply and demand cannot be erased overnight, as investments in additional capacity or better resource management require years to come online. As prices rise, we expect different battery configurations or the use of hydrogen as an energy source to put more pressure on the use of metals such as cobalt or lithium. Costly integration of these materials helps drive research & development, therefore the adoption of other materials and technologies, such as batteries without cobalt. Moreover, the current momentum in alternative battery configuration and hydrogen adoption may be a game changer for the industry as many countries are rushing to develop industries, and thus products, in order to take a lead on the short (2 years) to medium-term (up to ten years) on the next generation vehicles.
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