Electric vehicle dashboard. (Reference image by Richard Unten, Flickr).
Near-term macroeconomic conditions could slow the uptake of plug-in electric vehicles, but strong sales growth will persist through the medium term, an industry event heard this week in Vancouver.
Capitalight Research MD Tom Brady sounded the alarm during a presentation at the Association for Mineral Exploration B.C.’s annual Roundup event. He says unrealistic expectations for the energy transition could undermine the bullish demand scenarios currently accepted as the norm as the transition unfolds.
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For example, global automotive market sales are expected to more than double to nearly 125 million by 2030, with ‘base case’ scenarios pointing to 35% PEVs in the mix. By 2050, most scenarios have the figure at 60%.
“This will require global lithium supplies to increase three and seven times, respectively. Not likely,” said Brady.
Declining ore grades for copper also pose a particular headache to the supply side of the copper equation. Copper grades are currently between 30-40% lower compared with 2000.
Despite these challenges, China’s ‘reopening’ following covid is expected to buoy many infrastructure metals prices, particularly in the second half of 2023. China’s urbanization rate is climbing from 60% to the OECD average of 80% by 2050, calling for a wall of new demand.