By Pratima Desai

London (Reuters) – The demand for metals like copper, essential for electric vehicles, remains strong despite slowing EV sales. Estimating future demand is challenging due to market evolution, according to Tom Mackay, head of refined metals at commodity trader IXM.

EV sales have declined due to factors like insufficient charging infrastructure and resale value concerns. Mackay emphasized that while growth in EV sales is slowing, the overall demand for metals remains robust and varies by region.

Consultancy Rho Motion reported that sales of battery EVs and plug-in hybrids increased by 32% last year to 13.63 million units, with a 25% decline in sales in the first quarter of this year, followed by a 22% increase in the second quarter compared to the previous year.

Copper is crucial for EV wiring and batteries, which typically use lithium and may also include nickel and cobalt. Mackay noted significant advancements in lithium iron phosphate (LFP) battery technology, which allows some LFP batteries to travel 1,000 kilometers and charge to 80% in just 10 minutes.

Originally developed for China, LFP batteries were designed to be a cost-effective alternative to nickel cobalt manganese (NCM) batteries, which remain popular in the West due to better recyclability, an important consideration for automakers.

Mackay stated that IXM's global workforce has decreased to around 440, with an emphasis on quality over quantity, and mentioned that they exited the aluminum business due to unsatisfactory returns.