Benchmark Gigafactories Europe paints grim raw material supply picture; “Auto OEMs will need to become miners”
Benchmark Mineral Intelligence held its inaugural Battery Megafactories Europe 2022 event in Berlin; the event zeroed in on a number of pertinent points for the continent’s EV and battery supply chain. Key takeaways from the Berlin event include:
Raw materials enter the realm of impossible
Even in the most optimistic scenarios where every single raw material project in the pipeline comes on stream and existing operations expand aggressively, there will not be enough raw material for the battery supply chain as we go into 2030.
Lack of supply is not due to any geological constraints but to a simple lack of capital investment to build future mines.
Benchmark forecasts that lithium chemical supply will be in a deficit of more than 300,000 tonnes by 2030, with nickel sulfate supply set to fall short of demand by nearly 400,000 tonnes, cobalt by more than 75,000 tonnes and flake graphite by nearly 2 million tonnes by the end of the decade.
Both lithium and cobalt face medium-term challenges to meeting automotive consumer ambitions; raw material constraints will prevent battery production topping the 1 TWh threshold until 2025.
OEMS will need to take drastic upstream action
Benchmark’s Simon Moores stressed that OEMs will “need to become miners” and invest to bring new raw material mining capacity, not just refining capacity, to market.
Benchmark’s Daisy Jennings-Gray warned of the “the huge raw material disconnect” that has opened up between growing downstream demand for critical battery raw materials from the EV industry and the increasingly limited availability of those raw materials.
Benchmark warned that OEM raw material fears have become reality for lithium and nickel after unprecedented price spikes.
LME nickel chaos exacerbated industry doubts over existing financial mechanism that “do not reflect the realities of the EV and battery supply chain” and calls for new pricing mechanism grows.
The global battery arms race shows no signs of slowing down.
Benchmark’s Keynote outlined that the “lithium ion battery is going nowhere” explaining the underlining trends of lithium ion cells, especially NCM and LFP chemistries, are getting “better, lower cost, and abundant”.
Benchmark warned of more battery capacity to come despite raw material disconnect, with global totals expect to top 10GWh for Energy Transition needs.
Global lithium ion battery capacity 10 year pipeline has reached 5,777 GWh.
Europe is set to have 15% of this capacity, China 68%, and the USA 12%.
The world has 282 Gigafactories at various stages of production and construction as assessed by Benchmark in February 2022.
Benchmark warned that short term battery cell price increases of 10-20% due to lithium carbonate and nickel sulfate price spikes will impact EVs but the long term trend towards lower costs is generally positive.
Benchmark is launching Battery Gigafactories USA 2022 in Washington DC, 23-24 June 2022. This event replaces The Benchmark Summit – Washington DC for 2022 only.