A new report by the International Renewable Energy Agency (IRENA), “Critical Materials: Batteries for Electric Vehicles”, reveals that the growing demand for electric vehicle (EV) battery materials required by 2030 can be met by expanding sustainable supply chains and scaling-up the development and adoption of innovative technologies.
According to IRENA’s 1.5°C Scenario, outlined in the World Energy Transitions Outlook, annual global EV sales need to rise from 14 million vehicles sold in 2023 to approximately 60 million by 2030. The report shows that meeting this target requires EV battery production to grow five-fold by 2030, necessitating a proportional rise in raw material supply to avoid supply-demand imbalances. This will require significant efforts to quickly and effectively scale up the production and sourcing of raw materials, according to the report.
“The adoption of electric vehicles is accelerating at an unprecedented pace, driven by significant improvements in battery performance and cost reductions,” said IRENA Director-General Francesco La Camera. “While innovation is already reducing the demand for raw materials and building an optimistic outlook for their long-term availability, the immediate challenge of scaling up production and processing capabilities must be addressed to support continued EV growth.”
The report outlines several actions for governments and stakeholders across the EV battery supply chain to ensure an adequate, reliable, sustainable, and affordable supply of critical materials by 2030. These actions include accelerating innovation in EV battery technologies to reduce material demand. Notably, innovations that substitute critical materials have already made a significant impact, with cobalt and nickel no longer used in about half of the passenger EVs sold in 2023.
Additionally, IRENA’s analysis emphasises the importance of scaling up material mining and processing while maintaining the highest environmental, social, and governance standards. It also highlights the need for increased international cooperation in key areas, such as enhancing data transparency, facilitating investment and technology diffusion, and laying the groundwork for critical material recycling beyond 2030.
The report provides an in-depth analysis of materials critical to EV battery production, with forecasts extending to 2030. Key findings include:
- Lithium: Demand is expected to remain high across all battery technology scenarios. Emerging technologies like sodium-ion, which do not rely on lithium, may enter the market later this decade, but their impact on reducing lithium demand will likely be more significant after 2030.
- Cobalt: Its criticality may decrease due to the rise of alternative technologies like LFP and LMFP. However, shortages are possible if cobalt-containing batteries remain prevalent.
- Graphite: Natural graphite production is expected to fall short of meeting the total graphite demand by 2030. Synthetic graphite and innovations in emerging anode technologies can bridge the supply-demand gap.
- Nickel: Demand stabilization is aided by the growing adoption of LFP and LMFP batteries, mitigating earlier supply concerns.
- Other Materials: The impact of EVs on the demand for copper, phosphorous, and manganese is expected to be minimal compared to other industries. However, the need for high-purity materials presents challenges in scaling up production.
Given the rising demand for the critical materials required in the manufacture of batteries for electric vehicles, This study provides a supply-demand analysis to explore potential bottlenecks by 2030.
The global energy transition will require profound changes in our energy system. Electric vehicles (EVs) have emerged as a key solution for decarbonising the transport sector. Rapid technological advancements in batteries, marked by significant performance improvements and cost reductions, have greatly enhanced their economic viability. This progress is paving the way for the mass adoption of EVs in segments previously deemed unsuitable, such as long-haul freight road transport.
The rising demand for EVs will significantly increase the need for the materials used in EV batteries, including graphite, lithium, cobalt, copper, phosphorus, manganese and nickel. To address uncertainties in demand and supply, IRENA has developed a supply-demand analysis to explore potential bottlenecks by 2030, aligned with IRENA’s 1.5°C Scenario.
This report aims to provide insights into potential trajectories of critical material demand for 2030 within the context of the rapidly evolving EV market. It investigates how various factors, such as the adoption of different battery chemistries and sizes, affect the balance between the demand and supply of these materials. The report also explores the role of innovation in addressing potential bottlenecks, offering pathways to reduce demand. Furthermore, It details several actions for governments and stakeholders across the EV battery supply chain to ensure an adequate, reliable, sustainable and affordable supply of critical materials for EV batteries by 2030.
