Raw material shortages risk threatening electric car boom

Audio 01:42

With the boom in electric cars, the supply of necessary raw materials has struggled to meet the ever-increasing demand.

© AP / Lise Aserud

By: Altin Lazaj

2 min

Nickel, cobalt, lithium or even manganese… The rise of the electric car is putting pressure on these raw materials which are essential for the production of batteries.

The large automobile manufacturers risk being confronted with difficulties of supplying these raw materials.

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With the boom in electric cars, the supply of these materials is struggling to meet the ever-increasing demand.

Indeed, battery factory projects are multiplying around the world.

There are 50 of them in the European Union alone. But these raw materials are also widely used by tech companies.

Sector specialists point to a disconnect between significant investments in battery production and insufficient investments in extraction.

This imbalance between supply and demand has already caused a significant rise in prices.

For example: In the past year, the price of lithium has almost doubled in the markets.

This sharp increase is causing supply difficulties which may slow down the transition to the electric car and considerably increase their selling price.

To avoid the problems of shortages, major car manufacturers such as Tesla, Volkswagen and BMW have already started to secure their supply chains.

They have signed direct contracts with the companies that control the extraction of these materials.

Latest announcement: Renault has entered into a nickel supply partnership with the largest European producer, the Finnish Terrafame.

Recycling is another option, millions of batteries are expected to reach the end of their life by 2030. This process could reduce global demand in 2040 by 35% for cobalt and nickel, according to a report by the Institute of sustainable futures at the University of Technology Sydney, Australia.

Faced with such potential, recycling industries are already preparing across the world to accelerate production and invest in new projects.

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