Blog

Aug 12, 2023

Are EVs at risk from a shortage of key materials?

A worker handles copper shavings at a foundry. EVs require nearly three times more copper than a conventional car, creating worries that there could be a shortage of the material. A shortage of rare

A worker handles copper shavings at a foundry. EVs require nearly three times more copper than a conventional car, creating worries that there could be a shortage of the material.

A shortage of rare metals could delay the electric vehicle transition that is a key part of the European Union’s plan to reduce greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels.

The raw materials in question include dysprosium, neodymium, manganese and niobium, which are required for lithium ion batteries and other essential components.

In July, consulting firm McKinsey issued a warning about potential shortages in key metals crucial for the clean-energy transition, which could hinder the widespread adoption of EVs and wind turbines, as well as solar panels.

The report projected that in 2030 there could be a 10 to 20 percent lack of availability of nickel, which is necessary for the lithium-ion batteries use to power EVs. An even more extreme deficit of 70 percent is forecast for dysprosium, a rare-earth element commonly used in electric motors.

These deficits would likely increase supply-chain costs and the prices of lower-carbon products, slowing global decarbonization efforts. This could potentially be exacerbated by the amount of time it takes to scale up raw material production.

McKinsey suggests investing $3 trillion to $4 trillion in mining, refining, and smelting by 2030 to meet the growing demand for batteries.

In May, a survey led by Chalmers University of Technology in Sweden and conducted on behalf of the European Commission, warned that if current raw material production levels remain where they are today, there will not be enough of these metals in future.

"It is related to electrification,” said Maria Ljunggren, who is an associate professor at Chalmers specializing in environmental systems analysis and the author of the report. “This includes the battery, of course, but also the electric motor and the power electronics."

Another fact is the EU’s heavy dependence on imports of the key metals from China, South Africa and Brazil.

"The lack of availability is both an economic and an environmental problem for the EU, and risks delaying the transition to electric cars," she told Automotive News Europe.

The severity of the situation is also underlined in the Commission’s Critical Raw Materials Act, which stresses the importance of European countries exploring their own geological resources.

Anders Karrberg, Volvo Cars’ head of global sustainability, told ANE that demand will rise for the materials but said it’s too early to say this will cause problems because steps are already underway to address the potential deficits.

"We can build EVs with a much lower level of critical raw materials than we do today," he said. "For example, electric motors do not need to have permanent magnets with rare earth elements."

Karrberg said additional changes to the materials makeup in tomorrow’s car will also help.

"With regard to critical raw materials, we should be more worried about other industries wind power because turbines need a much higher amount of rare earth materials -- and so do trucks," he said.

The EU must increase efforts to recycle critical raw materials, said Anders Karrberg, Volvo’s head of global sustainability.

From his perspective, the EU must increase efforts to recycle critical raw materials, noting the automotive industry has a role to play here.

"We have more than 50 different metals in the car today, but a majority of them are only present at very low weights," he said. "They are also spread through the vehicle which makes them difficult to collect and recycle at the end of a car’s life."

Karrberg said the material that he is most worried about is copper, which is used in electric motors, batteries, inverters and wiring.

More than 180 pounds (more than 80 kg) of copper is in a full-electric car compared with a maximum of about 50 pounds in a conventional car, according to the figures from the Copper Development Association.

In a few applications, copper can be substituted for aluminum, but not all, Karrberg said.

Ljunggren said automakers should indeed be looking for alternatives to prepare for potential shortages.

"If we look at the electric motors and the permanent magnets, which contain neodymium and dysprosium, could a different type of magnet be used, like a ferro magnet, of course it could – but with the understanding that this would change the performance of the vehicle," she said.

From her perspective, automakers must become more involved in the sourcing of raw materials overall. This will require the establishment of new partnerships in countries around the world and an emphasis on using recycled materials to create new products.

"These raw materials that go into the batteries and other parts of the car have not been used in the quantities needed to build up global fleets of electric vehicles," she says. "This is such a big issue for the EU."

Please enter a valid email address.

Please enter your email address.

Please verify captcha.

Please select at least one newsletter to subscribe.

You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.