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Europe’s Lag in the Electric Vehicle (EV) Materials Race

European carmakers are facing a significant shortage of vital raw materials required for electric vehicle (EV) batteries, potentially hindering their efforts to meet ambitious 2030 sales targets, according to a recent analysis by Transport & Environment (T&E), a Brussels-based campaign group. The report underscores the growing competition for green-tech resources as the automotive industry shifts towards electric mobility.

As per the analysis, European car manufacturers have secured contracts for only 16 per cent of the lithium, cobalt, and nickel necessary to achieve their 2030 electric vehicle sales goals. In comparison, leading electric vehicle manufacturers Tesla (US) and BYD (China) are considerably ahead of their European counterparts in securing access to these crucial raw materials.

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Batteries used in various devices, from mobile phones to electric vehicles, rely on precisely controlled combinations of metals. Among these metals, lithium, cobalt, and nickel play pivotal roles, making their acquisition essential for the electric vehicle industry.

The analysis further revealed that carmakers have disclosed agreements covering only 14 per cent of the required lithium, 17 per cent of nickel, and 10 per cent of cobalt to meet their 2030 targets. This comes as the European Union (EU) and the United Kingdom (UK) have announced plans to ban the sale of new fossil fuel-powered vehicles by 2035.

Julia Poliscanova, the senior director for vehicles and e-mobility at T&E, pointed out, “There is a clear disconnect between carmakers’ electric vehicle [EV] goals and their critical mineral strategies. Tesla and BYD are way ahead of most European players, who are only waking up to the challenge of securing battery metals now.”

Among the European car manufacturers, Mercedes-Benz, BMW, and Hyundai/Kia are reportedly lagging furthest behind their competitors. However, Ford, Volkswagen, and Stellantis have disclosed plans for battery mineral supply that rival those of Tesla and BYD.

While some car manufacturers may have undisclosed agreements with mining or refining companies to ensure mineral supply, others are exploring strategies to reduce or eliminate their dependence on costly cobalt and nickel. Nevertheless, the analysis suggests that carmakers will face significant challenges in achieving their electric vehicle targets due to the scarcity of raw materials.

These findings align with forecasts from data company Benchmark Mineral Intelligence, which predicts that demand for key materials will far exceed supply in the next decade. Specifically, Benchmark projects that lithium demand will quadruple by 2030, resulting in a shortfall of 390,000 tonnes compared to global production of 2.7 million tonnes. Similar shortfalls are anticipated for cobalt and nickel, contributing to what Benchmark describes as a “great raw materials disconnect” that could impede the transition away from traditional petrol and diesel vehicles.

Caspar Rawles, Benchmark’s chief data officer, emphasized, “In the medium and even the long term, lithium is probably going to be the limiting factor on the rate that the battery industry can scale.” Large-scale mining projects typically require five to seven years to commence production, making timely investment decisions crucial to increasing supply by 2030.

Poliscanova concluded that supply chain strategies would be pivotal in determining the success of the EV transition in Europe, potentially rendering some companies obsolete. However, she also noted that European manufacturers were ahead of their Chinese and American counterparts in addressing supply chain issues, particularly related to ethical and environmentally sustainable mineral sourcing practices.


Source: Sharecafe

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