Even if the raw materials market becomes tighter by 2025, 21 million battery electric cars can be produced in that year, still almost 50 percent more than market forecasts.If Europe secures a quarter of this for its market (roughly similar to Europe's share of global electric car sales in 2021), up to half of all car sales in Europe can be battery electric in 2025.
This shows that the electric car market is not constrained by the supply of raw materials, which will be sufficient to accelerate EV sales until 2025.
Rather, it is the European car CO2 regulation that dictates how many EVs automakers make. As European legislators are currently reviewing this, the T&E analysis shows that raw materials will not be a bottleneck to raising the short-term ambition to wean Europe off oil faster.
(While not being the limiting factor to produce more EVs, the analysis does show that there is not enough lithium and nickel to feed all the battery gigafactories that saw a boom in recent years. For example, lithium carbonate is already in short supply now, while nickel becomes a bigger limiting factor starting in 2025. If all gigafactories produce at full capacity, more than 40 million electric cars can be produced in 2025.)
From fossil to future diplomacy
Even if there are enough raw materials in the short term, they cannot always be bought easily on global markets.
The current high spot prices for lithium and nickel are a legitimate concern. Years of underinvestment in new metals supply, long project lead times and a sudden growth in EV sales have all resulted in the tight metals market.
But there is no shortage of metals in earth's crust, so these spikes are likely temporary. Just like the short-lived concerns around the price of silicon used for solar PV in 2008 or about the shortage of oil two centuries ago.
The real concern is that rapidly growing EV sales in China and the U.S. mean there is competition to secure sufficient volumes for the European market.
China and its companies are in a race to secure global lithium assets and expand battery production at home and abroad. Meanwhile the U.S. has invoked the Defense Production Act to boost the supply of critical raw materials.
Instead, Europe is flying to Qatar and Iran and is using its diplomatic muscle to secure oil and gas.
Scouring the globe for more fossil fuels shows we have the wrong political priorities.
Trade relations and diplomacy should instead be used to secure responsibly sourced critical metals from resource-rich countries in the short term.
Going forward, a central authority to coordinate the security of supply in critical metals is needed, with powers to invest, mandate sustainability and pursue joint purchasing.
Smart industrial and foreign policy and an unequivocal all-in attitude towards e-mobility by the European automotive industry, underpinned by strong sustainability rules, will help Europe stay in the race. Searching the world for fossil fuels will not.
