Demand for electric vehicles and their critical raw materials continues to expand globally. International Energy Association (IEA) reports 40% demand growth between 2022 and 2023. Some 95% of this noteworthy electric vehicle battery trend is due to increasing vehicle sales. While IEA ascribes the balance to bigger batteries for sports utility vehicles.
United States and Europe Lead Electric Vehicle Battery Trends
The United States and Europe were the only two major electric vehicle markets to exceed the global average 40% growth. Although China came a close second at 35%. Nonetheless, the United States market is still the smallest of the three in terms of market penetration.
China scores well in terms of this electric vehicle battery trend. It added 415 gigawatt hour cumulative capacity in 2023, compared to 185 for Europe and 100 for United States. Interestingly though, the remainder of the world, with smaller markets, saw battery demand jump 70% during 2023.
Innovative Electric Car Sales Lively in China in 2023
- Plug-in hybrid electric vehicles (PHEV) were a third of total electric car sales in China, and contributed 18% of battery demand. The difference between the two rates is a consequence of smaller batteries.
- Extended-range electric vehicles (EREV) increased to 25% of total Chinese sales. These have a combustion engine onboard to charge their batteries, which are twice plug-in hybrid size.
Raw Material Supply in Face of Electric Vehicle Sales
The International Energy Association reports increasing pressure on lithium, cobalt and nickel reserves. Batteries accounted for 85% of total lithium demand in 2023. This was a 30% increase over 2022. However, cobalt demand only grew 15%, and nickel 10%.
High levels of investment in mining and refining are absorbing the increased demand, and capping battery price increases. But there is an element of overcapacity threatening marginal businesses.
The International Energy Association says the situation, “Requires striking a balance between remaining profitable, while competing on prices”. There is a need for innovative technology, and alternative chemistry going forward, it says.
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