The global electric vehicle (EV) market is on fire and is projected to grow from $205.58 billion in 2022 to $1.7 trillion by 2032, boasting a compound annual growth rate (CAGR) of 23.1%.
In 2022 alone, EV sales jumped from 6.77 million in 2021 to 10.52 million. The Asia Pacific region, valued at $123.4 billion in 2022, leads the pack, while battery electric vehicles (BEVs) account for a massive 67% revenue share.
Subsidies to boost production
Government incentives, subsidies, and shrinking battery costs have fuelled this explosive growth. But obstacles like insufficient charging infrastructure and standardisation could hamper market expansion.
Still, the decreasing cost of EV batteries and rising government investments in charging infrastructure for heavy-duty vehicles offer vast growth opportunities.
This trend is a goldmine for EV manufacturers like Tesla (NASDAQ:TSLA), and mainstream automakers switching production to electric cars, but it also presents a lucrative opportunity for mining companies extracting essential metals and minerals for EV batteries.
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The perfect storm?
Cornell University researchers say that surging demand for battery-grade lithium, nickel, cobalt, manganese, and platinum may trigger economic and supply issues.
In a world where 40% of vehicles go electric by 2050, global lithium demand will skyrocket by 2,909% compared to 2020 levels.
Astonishingly, if all vehicles become electric by 2050, the lithium requirement more than double, reaching a staggering 7,513%, the American Ivy League institution said.
Between 2010 and 2050, assuming full vehicle electrification, the global yearly demand for lithium will surge from a mere 747 metric tons to an astounding 2.2 million metric tons.
Nickel the one to watch
By the time we reach 2050, nickel's demand will outpace that of other essential metals. With 40% of vehicles electrified, the worldwide requirement for nickel will be 2 million metric tons.
However, if all vehicles are electric, that number jumps to a massive 5.2 million metric tons.
Additionally, the study highlights that the yearly demand for cobalt (estimated between 0.3 and 0.8 million metric tons) and manganese (projected between 0.2 and 0.5 million metric tons) will likely experience a similar increase by 2050.
While this may be bad news for EV makers, it creates the perfect storm for miners of battery metals, particularly if the project is sited in a stable economy with excellent transport infrastructure.
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