The International Renewable Energy Agency (IRENA) report on critical materials for electric vehicle (EV) batteries highlights the growing importance of securing raw materials to support the global transition towards electric mobility. As electric vehicles (EVs) continue to gain traction as a key solution in reducing carbon emissions, demand for the batteries that power them is set to soar. The number of EVs on the road is expected to increase from 44 million in 2023 to 359 million by 2030. This drastic rise in EV production will require a significant expansion in battery production, and with it, an increase in the demand for critical materials such as lithium, cobalt, nickel, and graphite.
The report projects that by 2030, EV battery production will need to quintuple from current levels, requiring around 4,300 gigawatt-hours (GWh) of battery production annually. While the current planned battery manufacturing capacity (7,300 GWh/year by 2030) exceeds this demand, the availability of the raw materials needed to produce these batteries remains uncertain. Ensuring a steady supply of these materials is crucial to avoid potential bottlenecks that could slow down the transition to electric mobility.
The rise in demand for EV batteries is expected to drive up the demand for materials such as lithium, cobalt, and graphite. For instance, the demand for lithium could quadruple by 2030, while cobalt, graphite, and nickel demand could more than triple. However, innovation is already helping to reduce reliance on some of these materials. In 2023, almost half of the passenger EVs sold globally used batteries that did not contain cobalt or nickel. These advancements are reducing the pressure on these critical materials and improving the sustainability of EV batteries.
The supply side of critical materials presents both challenges and opportunities. While long-term reserves of materials such as lithium, cobalt, and graphite are sufficient to meet global demand, the challenge lies in scaling up production rapidly enough to meet the projected surge in demand. Lithium, for example, has reserves of around 150 million tonnes and resources of 560 million tonnes, enough to meet demand if production can be scaled up effectively. The report emphasizes the importance of expanding production capacity and diversifying sources to ensure that material shortages do not derail the transition to electric vehicles.
Technological innovation plays a pivotal role in reducing the demand for critical materials. New battery chemistries such as lithium iron phosphate (LFP) and lithium manganese iron phosphate (LMFP) are emerging as alternatives to traditional nickel- and cobalt-based batteries. LFP batteries, for example, do not require cobalt or nickel, making them a more sustainable and cost-effective option. By 2023, LFP batteries had captured around 44% of the global EV battery market, up from single-digit market shares in 2015. Innovations such as these not only reduce reliance on scarce materials but also lower battery costs and improve safety and performance.
Another promising development is the rise of sodium-ion batteries, which use sodium instead of lithium. Sodium is far more abundant than lithium, making sodium-ion batteries a potentially cheaper and more sustainable alternative. While sodium-ion technology is still in its early stages, it could help alleviate some of the pressure on lithium supply chains in the coming years. Sodium-ion batteries are expected to become more widely available towards the end of the decade, particularly for applications such as stationary storage and EV segments that do not require high energy density.
The report highlights the need for policymakers to support innovation in battery technologies and the expansion of critical material supply chains. Governments can play a key role in promoting research and development, streamlining permitting processes for new mining projects, and supporting the deployment of EV charging infrastructure. Moreover, international cooperation will be essential to ensure that supply chains are resilient and sustainable, especially as the energy transition accelerates in the coming decade.
In conclusion, while the global reserves of critical materials are sufficient to support the electrification of road transport, scaling up production in time to meet the rapidly growing demand remains a challenge. Innovation in battery technology, particularly the rise of alternative chemistries such as LFP and sodium-ion batteries, offers hope in reducing the reliance on scarce materials and ensuring the sustainability of the EV revolution. However, concerted efforts from governments, industry, and international organizations will be needed to ensure that supply chains are resilient, sustainable, and able to meet the needs of a decarbonizing world.
