A glass half full view on EV battery supply

There's a lot of doom and gloom on the EV battery supply chain in the press lately. Some worry we'll run out of critical minerals to meet demand, some forecast soaring battery prices with this rising demand, and others point to the sustainability and human exploitation issues associated with mining. 

To an extent, there are some merits in the concerns, but one of the problems is people are using the last 10-15 years as a barometer of how the future will be, and ignore some of the enormous leaps being made in terms of battery performance improvements, new chemistries, and improved circularity which will be key features over the coming decades.

There will always be naysayers, but when it comes to the Energy Transition I like to look for the glass half full perspective, mainly because I'm a big believer in the power of human innovation. 

Therefore, The Battery Mineral Loop report (featured below) from RMI makes for fantastic reading. It provides an insightful take on this topic and a clear strategy to show that the materials used in EV battery supply can actually be hugely beneficial rather than hindering us long term. Some of the highlights include:

🔋 We've already seen huge improvements. Without the progress on battery performance and chemistry mixes made since 2015, we'd have needed approx. 60% (if not more) lithium, nickel, and cobalt than currently needed today. Based on this trend, peak virgin battery mineral demand could be reached by the mid-2030s!

🔋 Battery improvements are coming all the time, for example, energy density has seen a 6% increase per kg per doubling of battery sales (which will soar this next decade). Likewise, battery lifetimes are getting longer (between 2021 and 2024, BNEF has seen a 2 year battery lifetime extension) - imagine what that can be like by 2035!

🔋 With improvements to battery material recycling - 80-95% of minerals can be recovered from batteries collected. This circularity will eventually eliminate the need for new extraction altogether

🔋 Our known reserves of lithium, cobalt, and nickel are double the level of total virgin demand we may require, and announced mining projects are already sufficient to meet almost all virgin demand. With new chemistries like LFP and eventually Sodium-ion batteries etc, we'll eliminate the need for some of these key minerals altogether.

🔋 Based on the rate of progress, we may only need to mine a cumulative 125 million tons of battery minerals, to get us to circular battery self-sufficiency. This is 17 times smaller than the current amount of oil we extract and process for road transport in 1 year (and based on current prices, will be about 20 times cheaper as well!)

All in all, if you look at things with a long-term lens, there is a lot of room to be optimistic. The “problems” of today may not be as significant in the bigger picture. 

I always point out that EVs are still relatively early in their journey (in some cases less than 10 years), where in comparison, ICE cars have had the advantage of hundreds of years of innovation. Like with any technology, over time performance will get better and better and costs will continue to fall (look at your TV at home for example?), and the recyclability of battery materials will be a key difference moving forward. 

So next time you read an article about the dystopian future of EVs, maybe consider the broader picture too!

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