Could the EV boom run out of juice before it really gets going?

ELECTRIC vehicles (EVs) seem unstoppable. Carmakers are outpledging themselves in terms of production goals. Industry analysts are struggling to keep up. Battery-powered cars could zoom from less than 10 per cent of global vehicle sales in 2021 to 40 per cent by 2030, according to BloombergNEF. Depending on whom you ask, that could translate to anywhere between 25m and 40m EVs. They, and the tens of millions manufactured between now and then, will need plenty of batteries. Bernstein reckons that demand from EVs will grow nine-fold by 2030, to 3,200 gigawatt-hours (GWh). Rystad puts it at 4,000 GWh.

Such projections explain the frenzied activity up and down the battery value chain. The ferment stretches from the salt flats of Chile’s Atacama desert, where lithium is mined, to the plains of Hungary, where on August 12 CATL of China, the world’s biggest battery-maker, announced a 7.3bn euro (US$7.5bn) investment to build its second European “gigafactory”. It is, though, looking increasingly as though the activity is not quite frenzied enough, especially for the Western car companies that are desperate to reduce their dependence on China’s world-leading battery industry amid geopolitical tensions. Prices of battery metals have spiked and are expected to push battery costs up in 2022 for the first time in more than a decade.

In June BloombergNEF cast doubt on its earlier prediction that the cost of buying and running an EV would become as cheap as a fossil-fuelled car by 2024. Even more distant targets, such as the EU’s coming ban on new sales of carbon-burning cars by 2035, may not be met. Could the EV boom run out of juice before it gets started?