The mining industry can keep up with demand for raw battery materials, but there may be shortages and price hikes along the way. Some people believe that the demand for raw materials will cause the EV market to fail, but this is not necessarily the case.
In fact, outside of North America, LFP battery designs are becoming more popular due to their lower cost and simpler supply chain. By adding Manganese to the cathode design, the Chinese have created a new chemistry called LMFP, which can provide higher energy density than LFP.
Global demand for new passenger EVs is expected to reach 12 million BEVs worth of batteries in 2023, with China remaining the largest market for EVs due to its dominance in city-commuters. The US will catch up due to its massive 75kwh average battery size, surpassing the needs of both Europe and China.
One of the central factors that will impact raw material demand this decade is the chemistry that China will adopt and promote as the successor to LFP.
The new forecast named “Will scarce raw materials grind the lithium battery market to a halt” from Rethink predicts that LMFP will be the next popular chemistry due to its simplicity and cost-effectiveness.
According to the report, the supply of lithium will remain constrained until 2025 or 2026, resulting in intermittent periods of high lithium prices. The Chinese EV market will continue to be a significant factor in determining lithium spot prices. Nickel and cobalt-based chemistries will become increasingly localized to North America and low-volume luxury markets due to lower-cost alternative battery designs. Graphite will also be problematic due to its heavy concentration in China, and manganese demand will increase with the advent of LMFP production. Platinum demand will shift from catalytic converters to semiconductor manufacturing. Battery chemistries in Europe and China will shift towards LMFP, impacting nickel and cobalt demand and necessitating phosphate or nitric acid production expansion.