The Surge in Demand for Metals in Electric Vehicles Continues Despite Sales Slowdown
As the market for electric vehicles experiences a temporary slowdown in sales, the demand for metals used in these vehicles remains strong. According to Tom Mackay, head of refined metal at commodity trader IXM, forecasting demand for metals in the electric vehicle industry is challenging due to various variables such as penetration rates and battery chemistries.
While sales of electric vehicles have slowed due to factors like a lack of charging infrastructure and concerns about resale values, overall growth in the industry is still robust. Consultancy Rho Motion reported a 32% increase in sales of battery EVs and plug-in hybrid EVs last year, with fluctuations in sales numbers in the first and second quarters of this year.
Copper, a key metal used in electric vehicle wiring and batteries, plays a crucial role in the industry. Advances in battery technology, such as the development of lithium ion phosphate (LFP) batteries, have improved the performance of electric vehicles. LFP batteries offer longer driving ranges and quicker charging times compared to traditional battery chemistries.
Despite the emergence of LFP batteries as a viable alternative to nickel cobalt manganese (NCM) batteries, the Western world still favors NCM batteries due to their recyclability. Automakers prioritize recyclability when choosing battery chemistries for their vehicles.
At IXM, the focus has shifted to quality over quantity, with a reduced global workforce of around 440 employees. The company has exited the aluminum business to ensure a higher return on resources.
In conclusion, although the electric vehicle industry is experiencing a temporary slowdown in sales, the long-term demand for metals used in these vehicles remains strong. Technological advancements in battery chemistry and a focus on recyclability are driving the industry forward, presenting opportunities for investors and consumers alike.