Electric Vehicles Drive Up Metals Demand

Electric vehicle (EV) sales were abruptly interrupted in 2020 due to COVID-19.

However, the consumer base for these cars isn’t going away any time soon. EVs are becoming increasingly popular thanks to higher environmental awareness, falling costs, and ever-improving infrastructure.

Demand for Metals on the Rise

Demand from the EV industry for key metals is on a swift upward trajectory.

Copper, nickel, and lithium are some of the key metals required for EV battery production. As a result, demand growth for nickel from EVs is expected to increase 14 times between 2019-2030. Lithium and copper are expected to experience a growth in demand of 9-10x.

Metal Expected Demand Growth Increase to 2030 in the EV Industry
Nickel 14x
Aluminum 14x
Phosphorus 13x
Iron 13x
Copper 10x
Graphite 10x
Lithium 9x
Cobalt 3x
Manganese 3x

Many of these raw materials come from low to lower middle-income countries and are essential to their economies. For example, around 50% of the world’s cobalt, another key material for EV manufacturing, is found in the Democratic Republic of the Congo.

Investors and mining companies stand to gain from this increased demand for EVs.

What’s Driving Demand?

As consumer awareness increases around climate change and demand shifts away from the oil and gas industry, the demand for EVs grows immensely. According to some estimates, EVs are expected to make up over half of all passenger vehicle sales by 2040.

Additionally, many governments have committed to the production of EVs in a bid to decrease their dependency on fossil fuels. China, for example, has a goal of having EVs make up 20% of new car sales by 2025.

Tesla (TSLA) is leading the momentum among manufacturers and investors clearly see the opportunity, having driven up Tesla’s shares by over 1,000% since March 2020. But there are other up-and-coming players in the EV market like NIO (NIO) in China, as well as traditional car makers that are shifting their focus to EVs.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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