Demand for Metals in Electric Vehicles Remains Strong

By Pratima Desai

London (Reuters) – The uptrend in demand for metals such as copper, used in electric vehicles, remains intact despite concerns about slowing EV sales. However, predicting future demands is challenging as the market rapidly evolves, according to Tom Mackay, head of refined metal at commodity trader IXM.

Challenges in EV Sales

Sales of electric vehicles have recently slowed due to issues like inadequate charging infrastructure and concerns over resale values. Mackay noted that the electric vehicle industry is still emerging, with many variables, including penetration rates and battery chemistries, contributing to uncertain demand forecasts.

“Growth in electric vehicle sales is slowing, but sales are still increasing. It varies from region to region, but overall growth is strong and the demand story for metals is healthy,” Mackay stated.

Current Sales Trends

Consultancy Rho Motion reports that sales of battery EVs and plug-in hybrid EVs rose by 32% last year, totaling 13.63 million units. However, sales declined by 25% in the first quarter of this year before bouncing back with a 22% increase in the second quarter.

Technological Advances in Batteries

Copper plays a crucial role in electric vehicle wiring and the batteries themselves, which typically contain lithium, nickel, and cobalt. Mackay highlighted advancements in lithium-ion phosphate (LFP) battery technology, noting that some LFP batteries can achieve a range of 1,000 kilometers and charge to 80% in just 10 minutes.

LFP batteries were initially developed for the Chinese market as a more affordable alternative to nickel cobalt manganese (NCM) batteries, which are considered higher value due to their recyclability.

Importance of Recyclability

Mackay emphasized that recyclability significantly influences automakers’ decisions regarding battery chemistries. Despite technological advances, he believes that the Western world’s battery demand will predominantly rely on NCM due to its higher recycling value.

IXM’s Workforce and Strategy

Mackay also mentioned that IXM currently employs around 440 people globally, fewer than in the past, with a focus on quality over quantity. The company exited the aluminium business due to unsatisfactory returns from that sector.