The dangers of understating the magnitude of the battery material supply/demand imbalance – by Matt Fernley (Kitco News – August 20, 2021)

Matt Fernley is Head of Research, Volta Fund; MD of Battery Materials Review.

I wanted to talk about the Nature article on battery raw materials that’s been doing the rounds this week. The article, Electric Cars: The Battery Challenge (Nature, 19 August 2021), is an otherwise excellent discussion of a lot of the issues with sourcing materials for electric cars. Unfortunately there’s a big “but”. And that “but” is in its treatment of primary battery raw materials.

While the author, Davide Castelvecchi, has clearly spoken to a lot of experts on batteries, recycling and other elements of the supply chain, maybe he hasn’t known exactly which questions to ask, because we get a discussion almost entirely on ternary batteries with little to no mention of LFPs (and their ability to lower demand for Nickel, Cobalt and Manganese) and we also get only three paragraphs on the impact of extractive industries on the battery industry.

All the “analysis” on raw materials is effectively based on BNEF’s Long-Term Electric Vehicle Outlook for 2021 and the general conclusion, based on a quote from the BNEF analyst, is that “temporary shortages [of battery raw materials] and dramatic price swings… [will] work themselves out”.

I very much disagree with this view and that’s what I want to talk about in this article. BNEF is not the only organisation touting this view that battery raw material supplies are not at critical levels.

A number of global investment banks are also in on this act. Ordinarily this wouldn’t be a problem, but the issue is that these groups are unfortunately being listened to by automakers which are therefore not making capital available for new supply of materials.

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