A constriction in the supply chain materials and rising demand for electric vehicles have seen an unforeseen rise in prices of the raw materials this year. The first half of 2022 saw a jump of almost over 7 times in lithium reserves and raw materials, while the prices of cobalt and nickel, essential for electric vehicle batteries have more than doubled. The trend seems to be long-lasting as the demand is unlikely to go down as more and more people move toward electric vehicles. The mass adoption of electric vehicles has put a humongous strain on the supply chain which is not able to cope with the rising demands.
Recent reports suggest the increasingly pressing need for mining and processing of key components for battery manufacturing if the demand and supply mismatch is to be nipped in the bud. Industry predictions claim that the battery demand from electric vehicles is probably likely to go up to an estimated 2200 Gigawatt-hour by the end of 2030 and up to the high ranges of 3500 Terawatt-hour as compared to current rates of 340 Gigawatt-hour.
“The simultaneous electrification of road transport and the deployment of decentralised variable renewables such as rooftop solar will make power grid distribution more complex to manage. Grid simulations suggest that between now and 2030, EV loads in major car markets should not pose significant challenges. This is because EVs are likely to account for less than 20% of the overall vehicle stock in most countries. However, some early adopter cities could face grid congestion pressures between now and 2030. Digital grid technologies and smart charging hold the key to transforming EVs from a grid integration challenge to an opportunity for grid management,” a report by IEA said.
“Governments in Europe and the United States have bold public sector initiatives to develop domestic battery supply chains, but the majority of the supply chain is likely to remain Chinese through 2030. For example, 70% of battery production capacity announced for the period to 2030 is in China,” added the report.
The disparaging margins between the demand and supply can only be curbed if local and global enterprises and governments work in tandem to tackle the concerning issues.
The report can be accessed here.
