Lithium-Ion Battery Demand To Jump Seven Times This Decade

Increased adoption of electric vehicles (EVs) will lead to higher demand for metals used in batteries and to lithium-ion battery demand jumping seven times this decade, research provider BloombergNEF said in a new report this week.

Demand for Li-ion batteries is set to exceed 2.8 terawatt-hours (TWh) annually by the end of this decade, which, according to Bloomberg estimates, is the equivalent of the annual production volumes of 80 Tesla gigafactories.

Copper and aluminum will lead the surge in demand for battery metals by 2030, BloombergNEF (BNEF) analysts said.

The latest estimate of global yearly battery demand is 35 percent higher in BNEF’s 2021 outlook than it was in 2020. The main reason for higher battery demand is the expected increase in passenger EV adoption.

China will continue to lead the battery chemicals manufacturing industry, holding a dominant position in the supply of key battery metals such as lithium, nickel, cobalt, manganese, and graphite, according to BNEF.

If Europe and North America want to diversify the battery chemistry manufacturing, they would need significant investment in capacity, the report said. 

The expected surge in EV sales is set to drive a thirteen-fold increase in battery-nickel demand by 2030, with an interim deficit through 2024, BNEF has estimated. Currently, just 5 percent of demand for the very pure so-called class-1 nickel comes from batteries. Yet, BNEF sees this share surging to more than 40 percent by 2025.  

Last month, BNEF forecast that total global sales of zero-emission cars would make up 70 percent of the car market by 2040, up from 4 percent now.

Despite the “brighter than ever” outlook for electric vehicles, policymakers aiming for net-zero carbon emissions by 2050 must do more to spur EV adoption, BNEF said. Moreover, battery recycling would be critical for achieving a net-zero scenario, because without recycling, the world’s resources of some raw materials could be exhausted, said James Frith, Head of Energy Storage at BloombergNEF.    

By Tsvetana Paraskova for Oilprice.com

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