Posted on 13 Oct 2021
Electric vehicle manufacturers are poised to face a shortage of battery-grade nickel supply from 2024, potentially reaching a deficit of 560,000 tonnes by 2026, Kallanish learns from Rystad Energy.
A new study by the Norwegian consultancy firm estimates that global nickel demand will rise from 2.5 million tonnes this year to 3.4mt in 2024, when production is expected at 3.2mt. The analysis considers existing mines, projects and development plans to date.
Today, around 70% of the world’s 2.3mt nickel demand comes from the stainless-steel industry. Consumption of the metal in the EV battery sector currently holds a 9% share, but this is forecast to increase to 31% by 2026. That will lead to a supply crunch, with carmakers and steelmakers competing for material.
“The potential nickel shortage could encourage industry leaders to look at previously unattractive sources of nickel, including deposits in Indonesia,” according to James Ley, global energy metals expert at Rystad Energy. “However, the process of extracting nickel from these deposits has inherent risks and challenges, including environmental, social and governance (ESG) concerns.”
He says there is no other obvious solution in sight that “won’t tarnish carmakers.” Western manufacturers are poised to face headaches and ripple effects in the production of EVs. As a result, they might look into alternative battery chemistries, such as the lithium iron phosphate (LFP) and sodium-ion (Na-ion), adds Ley.
Nickel is a key raw material in today’s EV batteries that rely on nickel-based chemistries such as nickel manganese cobalt (NMC) and nickel cobalt aluminium (NCA). Nickel-intensive batteries are the go-to of many Western manufacturers due to their high energy density, and consequently higher range, and lower cobalt needs. Rystad believes the upcoming nickel supply shortage will drive carmakers into adopting LFP batteries in certain models or regions.
Tesla and Volkswagen have already announced plans to use LFP batteries in their lower-end vehicles, something the Chinese market is increasingly doing.
Source:Kallanish
