According to a recent report, the global lithium-ion battery (LiB) market size is expected to reach US$182.53B by 2030, expanding at a CAGR of 18.1% from 2022 to 2030.
The note from ResearchAndMarkets.com has pointed to the rising sales of electric vehicles (EVs), along with the expanding renewable energy sector, as the key elements expected to drive the market to record levels. The study added that the emergence of integrated charging stations, green power-generation capability, eMobility providers, battery manufacturers, and energy suppliers is anticipated to stimulate market growth in the coming years. That forecast is supported by recent data supplied by the office of Australia’s chief economist.
Australia is a leader in both the global push to support the hunt for and development of many of the critical minerals that will fuel the new EV boom. It is also one of the leading producers of the metals such as lithium, copper, and nickel that are considered critical to the make-up of the new rechargeable battery technologies.
Global market share for EVs has tripled over the past two years, with EV sales now representing close to 9% of the global car market
Lithium
According to the Chief Economist’s most recent Resources and Energy Quarterly Report, record demand and prices for lithium coincides with a record growth in the EV market.
The report found that global light EV sales surged in 2021, rising steadily in each quarter, with an estimated 2M EVs sold in the December quarter 2021. Total EV sales for the year increased from 3.2M in 2020 to an estimated 6.5M vehicles in 2021.
The report forecast global EV sales to rise by a further 3M units in 2022, pushing up total sales to over 9M EVs. Global market share for EVs has tripled over the past two years, with EV sales now representing close to 9% of the global car market. Strong underlying demand and EV manufacturers’ declarations of further increases in production imply that EV sales could reach around 40% of vehicle sales annually by 2030.
Surging global EV sales have implications for a range of critical minerals and metals. In addition to using about 9kg of lithium, the average light EV takes about 200kg of other key minerals and metals to produce – about six times the amount used in a car with an internal combustion engine.
World demand for lithium is estimated to increase from 526,000t of lithium carbonate equivalent in 2021 to 636,000t in 2022. Demand is then forecast to more than double over the following five years, as global EV uptake continues to grow, with world demand forecast to reach 1.5Mt by 2027.
Annual growth in lithium demand over the outlook period is forecast at almost 20%. Asia remains the major source of demand for lithium, despite the diversification of battery factories into Europe and the U.S.
Strong demand is currently resulting in shortages of spodumene, lithium hydroxide, and lithium carbonate, which is pushing spot prices for all three commodities to record levels.
Spot spodumene concentrate averaged around US$2,700/t in February-March 2022, compared with US$1,900 in the December quarter and up more than six-fold from US$420/t in January 2021. Surging demand and low inventories saw reports of spodumene trades above US$3,000/t in early 2022.
Spot prices for lithium hydroxide (delivered to China) averaged US$57,000/t in February 2022, with daily prices reaching over US$70,000 by mid-March, a more than eight-fold increase from the US$7,984 average in January 2021.
Copper
Australia’s chief economist has forecast that the global energy transition towards low emissions technologies is expected to positively impact copper consumption over the near future. Copper’s conductivity, malleability, and durability make it vital to EVs, batteries, and renewable energy generation. Expanding EV charging networks and improving transmission infrastructure will also support consumption.
The latest Resources and Energy report suggests that copper used in EVs, batteries, and chargers could account for as much as 10% of world refined consumption by 2030.
Demand for EVs – which contain up to five times more copper than conventional cars – has continued to exceed expectations. Infrastructure such as charging stations and improved transmission lines will be needed to support this growing trend. While EVs and other energy economy technologies will increase their share of total refined copper consumption, traditional copper applications will still account for most of the consumption.
The Australian government report found that copper prices have remained “stubbornly” high, averaging just shy of US$10,000 in the March quarter 2022. Logistics challenges remain present, with higher shipping costs and longer transit times reducing the ability of increasing supply to moderate prices. Prices are expected to moderate over the year and dip to around US$9,400 by the December quarter, to average US$9,700 over the year.
Nickel
Russia’s dramatic invasion of Ukraine is not the only global event that is causing chaos on the nickel market.
With more sales – and a desire for bigger battery packs – nickel use in batteries is expected to be a dominant driving force of nickel demand over the near term. 360,000t of nickel was used in batteries in 2021 (11% of total demand), up from 200,000t in 2020. By 2027, batteries are expected to account for 22% of total nickel demand.
The recent surge in EV sales continues to create market pressure. The cost per kilowatt-hour (kWh) of battery packs is expected to rise in 2022, off the back of surging battery metal prices. It is expected that price parity of EVs will occur when battery costs reach US$100/kWh. If the price of battery metals remain elevated, this would push the “tipping point” for EV adoption later, creating some softening for nickel in battery demand. Alternative battery chemistries that do not use nickel are also emerging.
The Australian government report also noted that nickel exploration is booming in Australia, largely driven by the potential size of the EV market. The report found that nickel exploration expenditure was at a nine-year high with miners seeking new deposits of minerals that will drive the world’s low emissions transition.
