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Battery Supply Chain

Surging EV Sales Hitting High Lithium Prices, Supply Chain Constraints: Experts

Accelerating electric vehicle adoption rates are smashing into surging lithium-ion battery costs and weakening supply chains, which is prompting calls for enhanced domestic mineral production and research in alternative battery storage technologies, experts said during an Earth Day US Energy Association media call.

US light-duty EV sales totaled 608,000 in 2021, more than double 2020's 301,900 and almost 4% of total new vehicle sales, according to S&P Global Commodity Insights data. S&P Global expects EV sales to approach 849,000 in 2022 en route to topping 4.7 million by 2030.

Meanwhile, lithium carbonate was assessed at $75,000/mt on April 22 at Singapore, almost 12 times the $6,350/mt assessed at the beginning of 2021. Much of the world's lithium is produced in China, with which the US has had contentious trade relations in recent years.

Anne Robba, S&P Global Commodity Insights manager and research analyst for future energy, noted that while lithium prices have soared to record highs, they represent just part of the cost of EVs.

"While it is true that battery packs are the leading cost component of EVs, at around 30% of overall cost, key battery metals only account for approximately 12% of battery pack costs," Robba said in an April 22 email. "Therefore, price surges in lithium, nickel, cobalt, and other key battery metals have only lifted EV prices by 5-8%."

In contrast, Robba noted that EV battery cell prices have fallen 760% since 2015 to less than $150/KWh in 2021.

"[S&P Global] forecasts prices will experience a slight increase in 2022 before resuming their decline and falling below $100/kWh by 2026, making EV vehicles more broadly cost-competitive with [internal combustion engine] vehicles without subsidy," Robba said.



Supply constraints

However, Scott Aaronson, Edison Electric Institute senior vice president for security and preparedness, said another issue is constraints in available quantities.

Investment in Lithium-Ion Batteries Could Deliver 5.9 TWh Capacity by 2030

The transition to electromobility plays a leading role in reducing carbon emissions and achieving carbon neutrality. The long-term switch from internal combustion engines to plug-in electric vehicles is boosting demand for traction lithium-ion batteries.

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Almost Half of Tesla EVs Produced in Q1 Had No Nickel, Cobalt in Battery

Electric vehicle maker Tesla equipped almost half of the EVs manufactured in the first quarter of 2022 with nickel and cobalt-free lithium iron phosphate, or LFP, batteries, it said in its first-quarter results presentation April 20.

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Graphite Emissions Fuel Search for Solutions Along EV Supply Chain

Production of graphite, the largest component of electric vehicle batteries by volume, relies on petroleum coke and other fossil fuels, creating a dilemma for carmakers pushing EVs as a zero-carbon transportation solution.

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Listen: Battery Pack Costs on the Rise: Will It Slow Down EV Adoption?

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Ontario 'All In' To Develop Full EV, Battery Supply Chains: Minister

Ontario aims to propel its leadership in automotive electrification by continuing to attract key industrial investments that will establish a complete electric vehicle and battery supply chain in the region, according to a government official.

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The S&P GSCI Electric Vehicle Metals seeks to measure the performance of the tradeable metals used in the production of an electric vehicle (EV) and is designed to have the flexibility to respond to changes in EV technology and the adoption of new metals futures contracts.

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Mining

Raw Materials In Short Supply For EV Makers Struggling To Meet Customer Demand

Automakers do not have enough metal to meet demand for electric vehicles, even as customers facing high fuel prices clamor for more.

Battery Metals Mining, Recycling Both Critical To Energy Transition: Panel

With the sheer volume of battery terawatt-hours required to transition the world away from fossil fuels, it is going to require both increased mining and advances in battery recycling to meet demand, a panel of battery industry researchers and executives said March 29.

A complete transition to electric transportation will require on the order of 10 TWh of battery production in the next decade, according to Vineet Mehta, director of battery technology and system architecture at Tesla. Taken a step further, to think about getting the entire planet off of fossil fuel consumption, including primary energy consumption, will put total demand close to 350 TWh, Mehta said while moderating a panel at Cambridge EnerTech's International Battery Seminar and Exhibit.

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Market Dynamics

Rising U.S. Gasoline Costs Make EV Ownership Even More Favorable, Say Advocates

U.S. gasoline prices surging above $4.00/gal on average are making EVs—already coming off a record market share of 6% in the fourth quarter of 2021—even more financially attractive to drive, say vehicle trade groups.

Charging an EV costs one-fifth to one-half of refueling a comparable gasoline internal combustion engine (ICE), on a per-mile basis, in the U.S., said the Zero Emission Transportation Association (ZETA) in a report released in early March.

Comparing models of popular SUVs, pickups, and sedans, ZETA said that the EVs are significantly less costly to drive in each category. The prices below are based on a retail gasoline price of $4.32/gal (as of 10 March) and a $0.14/KWh for power (December 2021).

"This month's Consumer Price Index shows once again that gas prices are surging, which has been exacerbated by Putin's invasion of Ukraine. American families are losing money at the pump to a commodity that is increasingly unpredictable and unaffordable in an already-expensive pandemic year," said Joe Britton, executive director of ZETA. "Our analysis shows that American consumers don't have to choose between driving their car or saving money. Electric vehicles are affordable now."

However, ICE engines still offer substantial advantages on driving range.



How will consumers react?

Volatile gasoline prices do make EVs more attractive to consumers, commented Mike Fiske, research and analysis director at S&P Global Mobility. "The larger question is whether consumers view this spike in cost as being temporary or not," he said in an email to Net-Zero Business Daily by S&P Global Commodity Insights.

China's Lithium Consumption to Slow in April as Pandemic Curbs Disrupt Demand

China's lithium consumption is expected to slow down slightly in April from March amid high raw material prices and pandemic-led disruptions, industry sources said March 14.

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Electric Vehicle Shortage Will Drive Carmakers To Invest – Volta Energy CEO

Automakers and battery manufacturers will not be able to keep up with the pace of electric vehicle demand at first, but that will only encourage legacy automakers to double down on making necessary investments in new technology.

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EV Take-Up To Fall Short Of Forecasts On Russia-Ukraine Crisis: Miner Sibanye-Stillwater

Battery electric vehicle penetration rates will probably be lower than most forecast in the medium to long term due to consequences of the Russia-Ukraine crisis, Neal Froneman, CEO of South African-based platinum group metals and gold producer Sibanye-Stillwater said March 17.

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Nickel Price Spike During Russia-Ukraine Conflict Could Drive Up EV Costs

Nickel prices jumped after Russia, a top global nickel producer, invaded Ukraine on Feb. 24, threatening to drive up electric vehicle battery costs that were already under pressure from rising raw material prices.

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EV Expansion

Global Electric Vehicle Sales Doubled; U.S. Made EV Comeback in 2021

China maintained its vast dominance in the global electric vehicle market by selling a record 3.3 million cars in 2021, while the U.S. ended a two-year slump to see EV sales double, according to newly released data.

Worldwide EV sales doubled year over year in 2021 to 6.6 million, the International Energy Agency reported in its Global EV Outlook for 2022 on May 23. Some 630,000 plug-in battery and hybrid electric cars were sold in the U.S. in 2021, twice as many as the year before. In Europe, 2.3 million EVs were sold.

In all, there were 16.5 million electric cars on the road worldwide in 2021, three times more than in 2018, the agency reported. The IEA and many nations are looking to EVs to replace combustion engines to slow climate change. In the U.S, transportation is the largest source of carbon dioxide emissions, accounting for 33% in 2020.



The National Oceanic and Atmospheric Administration reported separately on May 23 that greenhouse gas emissions from human activities trapped 49% more heat in 2021 than in 1990, the baseline year for the initial Kyoto climate protocol.

But so far, EV production and uptake have been dominated by China and the EU. Those two regions accounted for 85% of the world's sales in 2021, the IEA said.

European governments plowed the equivalent of $12.5 billion into EV subsidies and tax waivers in 2021, and China $12 billion, the agency's report found.

Solar Cells Anchor Growing Industrial Silver Demand, While EVs Offer Opportunity: Analyst

The photovoltaic (PV) cell market for solar energy panels continued to anchor a 9% year-over-year increase in global silver demand for industrial applications in 2021, and electric vehicles present an opportunity for further gains over the coming years, according to Metals Focus Managing Director Philip Newman.

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Going Electric: Introducing The S&P GSCI Electric Vehicle Metals

As the world has begun to focus on new technology to aid in the global energy transition, electric vehicles (EV) are becoming more a part of everyday life.

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General Motors To Launch Canada's First Commercial Electric Vehicle Hub In Ontario

General Motors will launch Canada's first full-scale commercial electric vehicle manufacturing hub at its CAMI automotive assembly plant in Ingersoll, Ontario, with production expected to begin by the end of the year, the company said April 4.

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TalkingPoints: S&P GSCI Electric Vehicle Metals - Commodities Go Electric

As the world has begun to focus on new technology to aid in the global energy transition, electric vehicles are becoming more a part of everyday life.

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Energy transitions present major strategic decision-making challenges for today's business leaders. Gain a comprehensive view of where the move to sustainable energy is and where it’s headed with S&P Global Commodity Insights Energy Transition.

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