Critical Minerals and Energy Intelligence

EV Market Powers Through Q3 2021

If Q2 2021 was a breakout performance for EVs, Q3 was a stress test. Record-breaking demand, sure, but also a spotlight on just how fragile parts of the supply chain have become. From semiconductor shortages to battery raw material price spikes, the EV market has hit some friction. For battery metals investors, this was not hard to predict.

Global EV sales in Q3 2021 topped 1.7 million units, pushing the past the 4.2 million mark for this year so far by the end of September. That’s more EVs sold in nine months than in all of 2020 — and nearly triple 2019 numbers. China continued to dominate, with over 500,000 EVs sold in September alone. Europe held steady as a solid second, and the U.S. market following after.

The global semiconductor shortage hit automakers hard and resulted in slow deliveries and postponed expansions. It was really being able to lean on existing inventory that helped sales fulfillment during the quarter. The big issue, and it’s something the mining sector has been warning of for a long time, has been battery metal supply. With demand outstripping supply, prices for lithium, cobalt, and nickel all rose sharply during Q3. Automakers are finally making real noise about long-term battery supply and we’re starting to see them move upstream. It’s not unreasonable to expect the trend of direct sourcing to continue for some time.

In terms of other pertinent EV market news this quarter, India rolled out a major EV incentive plan at the federal and state levels, aiming to kick-start domestic demand and manufacturing, and Germany’s new government coalition pledged a faster transition to electric mobility — including plans to end combustion engine sales sooner than previously targeted.

At the corporate level, Ford announced a $11.4 billion commitment to build EV and battery plants in Tennessee and Kentucky — its largest investment in U.S. manufacturing. GM pledged to double its revenue by 2030, with EVs and software at the center of that strategy. Also, battery players, LG and SK Innovation, ramped up production expansion plans to meet surging demand from global automakers.

More auto factories, more gigafactories, more government support. Better get building more battery metals mines if you want those manufacturing plants to make anything!

Anthony Milewski

Chairman, Nickel 28 Capital

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