As carmakers gear up to electrify their fleets, they face challenges to secure supplies of raw materials used for battery production and to prove the environmental benefits of a lifecycle perspective, according to a report.
Given global environmental pressures and governments’ ambitions to remain sustainable, the electric vehicle (EV) and battery markets are poised for massive growth, according to independent research organisation A T Kearney Energy Transition Institute.
The Middle East region, particularly the GCC, is one of the world’s most receptive new energy vehicle markets, due to strong government support around the region and growing customer acceptance.
However, the report highlights the need to look at the holistic life-cycle management of EVs to ensure the desired reduction of CO2 footprint is indeed achieved. This will require nations to consider which energy sources are used to charge electric car batteries.
According to the report, cobalt is in particularly short supply globally and reserves could be depleted completely by the time 300 million EVs are produced—a modest proportion compared to the 1.2 billion cars on roads today.
It also noted that lithium production has risen seven percent a year since 2018, but to keep up with demand, miners need to accelerate production to more than nine percent a year. Rising demand and tight supplies have also led to price increases.
Romain Debarre, managing director, A T Kearney Energy Transition Institute, said, “Electric car batteries rely on a host of rare materials—from lithium and nickel, to cobalt.
“Battery makers around the world are struggling to secure supplies of these key ingredients as demand outstrips supply. This undoubtedly places pressure on carmakers, so the hunt for alternative technologies is on,” Debarre said.
Kurt Oswald, board member, A T Kearney Energy Transition Institute and Partner, A T Kearney, said, “The region is transforming and supporting the move to electric vehicles. As renewable energy expands throughout the Middle East, electric vehicles are poised to be the next big trend as eco-friendly cars becomes more affordable.”