Metal will not be for everyone!

Indeed, the COVID 19 pandemic has highlighted the criticality of many value chains, particularly affecting the industrial transport sector. This situation is now aggravated by the conflict in Ukraine, the consequences of which are hampering the supply of essential goods such as gas and metals.

In addition, significant amounts of specialty metals are required for any transition to green mobility. As an example, NCM batteries (Nickel – Cobalt – Manganese) use more than 20 different materials.[1].

If we stick to the all-electric scenario from 2035, by 2030, batteries will account for the largest share of demand for some metals. Already in 2021, more than 50% of lithium mined has been used for the production of electric vehicles and energy storage. Taking into account the set goals, by 2030 this rate will exceed 80% of extracted lithium.

Technical developments will be necessary to overcome the supply/demand imbalance

Without a major technological breakthrough, a 7% market share for electric vehicles will require an average 6-fold increase in lithium production levels between 2023 and 2030 compared to 2022. Given the time required to develop mining projects (15-20 years between first surveys and the start of production), it appears that demand will be difficult to meet with existing assets or assets under construction.

The outlook for cobalt is more worrying. With a constant technological mix, by 2030 30% of the current reserves will be consumed by electric vehicles (without taking into account the evolution of demand within other sectors).

Therefore, alternative measures should be considered.

Currently, many actors are committed to the development of alternative technologies less greedy for critical metals such as cobalt, with the aim of reconciling the reality of exploitable and available resources with the ecological transition imperative. Tesla has already announced that it will adopt new LFP (lithium-phosphate-iron) batteries with lower energy density but better durability. Therefore, it is a preferred technology for small cars: city cars and small utility vehicles.

Along with adopting new technological solutions, recycling is a strategic lever to conserve these critical resources. Today, the importance of recycling varies by metal; about 32% for cobalt, 16% for nickel and only 1% for lithium. The challenge is even more important because by 2030, 1.2 Mt of lithium-ion batteries will be at the end of their life. After reaching a 75% market share of electric vehicles, recycling could cover 50% or even 80% of global demand 10 years after the full transition to electricity.

The selection of priority segments is now inevitable

In parallel with the concept of use, collective thinking should be carried out between industrial subjects and state authorities. Electrification of heavy vehicles will be most effective in reducing GHG. Each ton of CO2 emitted for a semi-trailer requires half the cobalt (0.12-0.44 kg Co/tCO2) compared to a light car (0.24-0.64 kg Co/tCO2). Indeed, electric trucks will compensate for the size of their batteries (up to 1 MWh and 6 tons) with intensive use (50,000 km per year for 15 years). However, such a commitment requires the creation of an efficient charging infrastructure at the European level, with Megawatt systems along the freight corridors.

For light vehicles, city cars have an advantage over road cars, which is based on their battery capacity of 16,000 km per year. Therefore, electrification efforts should be focused on small vehicle segments (including utility vehicles). The development of car sharing, maximizing the use of vehicles and calibrating batteries for each use will be key to controlling future demand.

Efforts should be focused on three priority areas

Faced with the imperative to initiate an ecological transition and ambitions to develop the share of electric vehicles within our mobility, metals appear more important and strategic resources than ever. To try to achieve the goals set by the European Union, on the one hand, it will be a matter of improving battery technologies, limiting the use of critical metals, adapting these technologies to automotive segments. On the other hand, to develop recycling channels as a priority for NCM batteries, pending the availability of critical volumes. Finally, by favoring electrified segments (trucks, private cars, light commercial vehicles) and contributing to the development of the necessary infrastructures (fast charging, car sharing, etc.)

[1] Lithium – 2.1% by mass for NCM111, cobalt – 6.1%, nickel – 6.1%, manganese – 5.7% and graphite – 16.1%.