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Critical mineral supply for electric batteries faces shortfall by 2030

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Electric battery manufacturers can expect supply deficits across key critical minerals by 2030, including lithium, nickel, manganese and cobalt, due to soaring demand, as well as imbalanced regional supply and demand.

A new report by McKinsey & Company estimates estimates global demand for passenger cars in the battery electric vehicle (BEV) segment will grow x6 from 2021 to 2030, with annual unit sales increasing from 4.5 million to 28 million.

Raw material supply and demand - The Oregon Group - Critical Minerals and Energy Intelligence

Raw material supply and demand slower electric vehicle penetration - The Oregon Group - Critical Minerals and Energy Intelligence

“The industry is likely to confront persistent long-term challenges; it will need to address them to keep up with demand in 2030”

— McKinsey & Company, Toward security in sustainable battery raw material supply

lithium: the share of lithium used by electric battery producers could grow to 95% by 2030, from more than 80% today
nickel: the electric battery sector is expected to increasingly vie with steel (which accounts for 65% of demand today) and other sectors for this class 1 nickel, raising the possibility of a slight shortage by 2030
cobalt: absolute demand for cobalt for all applications could rise by 7.5% a year from 2023 and 2030
high-purity manganese: increasing demand for battery-grade manganese is likely to outpace supply, requiring the development of new refineries. In the base case, using the latest demand estimates, McKinsey analysis projects that in 2030, only about 20% of the HPMSM supply will meet the requirements of battery applications (30% if all announced projects are realized), which themselves will account for only about 5% of total demand for manganese

Supply is expected to remain significanlty concentrated in a few countries, including Indonesia for nickel; Argentina, Bolivia, and Chile for lithium; and the DRC for cobalt. For example, the EU imports 68% of its cobalt from the Democratic Republic of Congo, 24% percent of its nickel from Canada, and 79% of its refined lithium from Chile.

Our recent analysis on the concentration of refining in China:

Refining is the chokepoint

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